Exit Strategy vs Exit Readiness: What Founders Get Wrong
Why readiness, not timing, determines value and the people factors buyers care most about.
Most founders assume their eventual exit will be determined by timing: market conditions, valuation cycles, investor appetite, or the right strategic buyer appearing at the right moment. But in reality, timing plays a much smaller role than many believe. What actually determines value — and whether the deal completes at all — is readiness.
And readiness is rarely about the financials. It’s about the people.
The team.
The culture.
The structure.
The founder themselves.
This is the part most founders get wrong.
1. Strategy is theoretical. Readiness is tangible.
An exit strategy is a plan on paper:
“Sell within five years.”
“Aim for a strategic buyer.”
“We’ll look at PE when we hit £5m ARR.”
It sets intention — nothing more.
Exit readiness is the real-world capability of the business to be sold.
A founder can hold an immaculate exit strategy while running a business that is completely un-sellable:
No leadership depth
No succession options
A culture reliant on the founder’s energy
Decisions bottlenecked
Processes undocumented
Governance nonexistent
Buyers don’t purchase strategy. They purchase a machine that can run without its creator.
2. Timing doesn’t increase value but readiness does.
Founders often try to “time the market.”
They wait for:
higher valuation multiples
investor confidence
sector hype cycles
economic upturns
But buyers don’t care about timing nearly as much as they care about:
stability
capability
resilience
reduced risk
predictable performance
A business with poor leadership depth and key-person dependency will be worth less in a boom than a well-structured, well-led business is worth in a downturn.
Readiness compounds value. Timing merely adjusts it.
3. Buyers analyse people risk before they analyse profit.
Founders expect buyers to focus on revenue curves, margins, and growth. They do — but not until they understand the people dynamics.
This is where most deals begin to fall apart.
Buyers ask:
“Who makes the real decisions here?”
“What happens when the founder leaves?”
“Is there a leadership team or just job titles?”
“What political tensions or interpersonal issues sit under the surface?”
“Is the culture resilient enough to survive a transition?”
“Who are the flight risks?”
A great P&L can’t compensate for:
a founder-centric culture
a brittle team
a disengaged second tier
a toxic or unstable dynamic
weak succession
a culture that collapses without the founder’s presence
These are the red flags that kill deals — not market timing.
4. Founders focus on valuation. Buyers focus on continuity.
Founders typically ask:
“How much is it worth?”
“What’s the multiple?”
“Can we push valuation higher?”
Buyers ask something entirely different:
“Will this business still perform when the founder walks away?”
This is why exit readiness is fundamentally about:
leadership capability
operational independence
distributed decision-making
governance
psychological safety
cultural strength
clarity of roles
Value is created not by how impressive the founder is — but by how unnecessary they are.
5. Emotional readiness is the hidden deal killer.
This is the part nobody likes to talk about, but every buyer sees.
A founder may say they want an exit, but:
they stay deeply involved in the weeds
they struggle to let go of decisions
they’re anxious about what comes next
they fear loss of identity
they worry about their team
they cling to legacy ways of working
negotiations feel “personal”
boundaries blur
last-minute hesitations derail progress
When founders are emotionally unprepared, the business signals instability and deals stall.
Readiness is as much psychological as structural.
6. The buyer lens: what matters most
From buyer interviews, M&A advisors, and leadership due diligence insights, the same five themes come up repeatedly. Buyers prioritise:
1. Leadership depth
A second tier who can genuinely run the business.
2. Founder disentanglement
Clear boundaries, distributed authority, and documented processes.
3. Cultural resilience
A healthy, functioning culture that will not fracture under new ownership.
4. Governance & decision-making discipline
Predictable, transparent, professional.
5. Succession & talent pipeline
A clear pathway for continued growth.
These elements create confidence, reduce risk, and increase valuation — far more than timing.
7. Exit readiness is a transformation, not an event.
Becoming a sale-ready business requires evolution in four dimensions and hen these are aligned, buyers move faster, advisors work smoother, and valuation increases.:
Business readiness
Systems, governance, commercial discipline, operational maturity.
Leadership readiness
Capability maps, decision rights, succession, accountability.
Cultural readiness
Trust, clarity, communication, psychological safety, behaviour standards.
Founder readiness
Identity, purpose, boundaries, letting go, post-exit life design.
8. The biggest misconception founders hold
They believe that exit is something you prepare for in the final year.
In truth, exit readiness is built:
in the way decisions are made today
in how the founder delegates
in how the leadership team functions
in what processes are documented
in how resilient the culture becomes
in the conversations the founder has now, not later
The businesses that exit well don’t rush.
They build readiness year on year, and timing simply becomes a bonus, not a dependency.
Final thought
Exit strategy sets the intention.
Exit readiness creates the outcome.
Founders who understand this shift:
gain higher valuations
reduce risk
avoid internal conflict
protect their legacy
and navigate the transition with clarity and confidence
Exits don’t happen because the market is right.
Exits happen because the business (and the founder) genuinely are.
