The Exit Readiness Playbook

Turn preparation into premium—price and terms

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Why readiness matters

Great outcomes aren’t an accident. Buyers pay fastest—and bid better—when three things are true: your numbers are credible, your story is buyer-proof, and your data room is clean. Readiness shrinks diligence risk, creates real competition, and gives you leverage on price, structure, and certainty of close.

The 7 pillars of exit readiness

Use these as your checklist. Aim for “green” in each before outreach.

1. Financials (QoE-ready)

   • Monthly P&L/BS/CF, 24–36 months + TTM

   • EBITDA normalization (owner comp, one-offs, related-party)

   • Revenue quality (mix, cohorts, retention, ASP)

   • Working-capital model (seasonality, target peg, true-up logic)

2. Legal & Compliance

   • Clean cap table; board/consent mechanics clear

   • Material contracts centralized (assignability, change-of-control)

   • IP ownership & open-source inventory; regulatory status documented

   • Litigation/claims log with status

3. Commercial

   • Customer concentration analysis; gross-to-net clarity

   • Pipeline & win/loss; pricing strategy; competitive map

   • References pre-qualified; churn drivers understood

4. Operations

   • Unit economics by product/service; contribution margin logic

   • Supply chain & inventory hygiene; obsolescence policy

   • SOPs for core processes; vendor dependencies mapped

5. People & Governance

   • Org chart & succession; key-man coverage; leadership bench

   • Compensation/bonus plans; non-compete/non-solicit status

   • HR files complete; retention risks identified

6. Tech & Data

   • Systems map; data ownership & exports; cyber basics (MFA, backups)

   • Reporting cadence (weekly/monthly KPIs); source-of-truth defined

7. Deal Readiness

   • Teaser + executive summary; CIM outline with data references

   • Buyer universe mapped (strategics, PE, family offices)

   • Dataroom index & permissions; diligence calendar & responsibilities

     
     

A simple scoring model (so you know when to launch)

Score each item 0–3 (0 = missing, 1 = partial, 2 = adequate, 3 = best-in-class). Weight pillars roughly:

• Financials 25%

• Deal Readiness 20%

• Commercial 15%

• People 10%

• Operations 10%

• Legal/Compliance 10%

• Tech/Data 10%

Readiness % = SUM(Score × Weight) / (3 × SUM(Weight)).

• 75–100% (Green): go to market in 15–45 days

• 50–74% (Amber): 45–75 days of prep

• 0–49% (Red): 90–120 days of prep

  
  

Your 30/60/90-day plan (template)

Days 0–30 — Stabilize & clarify

• Close financials; normalize EBITDA; build WC model

• Draft teaser & exec summary; buyer longlist v1 (100–200)

• Dataroom index + file-naming; permissions framework

Days 31–60 — Instrument & package

• KPI dashboard live; monthly/weekly reporting cadence

• Redacted samples (contracts, invoices); policy docs

• CIM outline + data cites; reference list curated

Days 61–90 — Story & go-to-market

• Finalize CIM; management presentation narrative

• Longlist → shortlist; outreach sequencing; NDA templates

• Diligence calendar; responsibility matrix; PR/employee comms plan (if needed)

  
  

Materials that move markets (and why)

• Teaser (1–2 pages): problem/solution, key metrics, investment highlights, anonymized. Goal: secure NDAs.

• Executive Summary (3–5 pages): business model, growth drivers, high-level financials, rationale.

• CIM (15–35 pages): factual, footnoted to data room; avoid marketing fluff—use evidence.

• Management Presentation: built around buyer underwriting (growth, margin, risks, plan).

Pro tip: Every claim in your materials should point to a data-room exhibit (file ID/reference). It builds trust and shortens buyer cycles.

Data room: your silent negotiator

Index (starter):01 Corporate • 02 Financials • 03 Tax • 04 Legal/Contracts • 05 HR • 06 Commercial • 07 Operations • 08 Tech/IT • 09 Compliance/Regulatory • 10 Other.

Must-haves:

• Monthly financials with roll-forwards; bank recs; AR/AP aging

• Contract abstracts (term, renewal, termination, assignment)

• Customer cohorts; pricing history; churn/retention analysis

• Inventory reports; vendor terms; warranties/returns

• Org chart; comp plans; option/bonus docs; policies

• InfoSec: access controls, incident logs, audit trails

Set permissions by folder, watermark sensitive files, and keep a changelog. Treat Q&A like a ticket queue with owners and deadlines.

Valuation: build a defensible range (and the levers to move it)

• Multiples: EBITDA and, where relevant, revenue; triangulate with comps.

• Adjustments: owner comp, non-recurring items, related-party, subscale inefficiencies.

• Drivers: growth (net retention/cohorts), margin trajectory, concentration, working capital drag, capex needs.

• Range, not a point: “$X–$Y EV given A/B/C assumptions”; show what moves it.

Turn valuation into a plan: If the lever is NRR, tighten renewals and customer success; if it’s WC, align terms and inventory policies before launch.

Working capital peg (small detail, big dollars)

• Build a 13-month WC view to capture seasonality.

• Define what’s in/out (cash-like, debt-like, deferred revenue).

• Agree a target peg methodology in the LOI; simulate true-ups to avoid surprises.

  
  

Common traps (and how to avoid them)

• Listing & hoping: outreach without readiness leads to slow bids and weak terms.

• Story–data mismatch: claims the data can’t support will cost you credibility.

• Hidden concentration: under-disclosed customer/vendor reliance spooks buyers late.

• Messy permissions: open data rooms leak leverage; gate access by stage.

• Unbounded founder role: define post-close scope and runway before signing the LOI.

  
  

What “good” looks like (quick rubric)

• Financials: month-end close <15 days; bridges and support files on hand

• Commercial: top-10 customers referenceable; churn narrative with data

• Ops: unit economics by SKU/service; backlog & capacity clear

• People: succession mapped; retention plan ready

• Tech/Data: single source of truth; KPI cadence live

• Deal: teaser/exec summary ready; buyer list curated; calendar locked

  
  

One-page checklist (copy & keep)

•  Close books; normalize EBITDA; WC model built

•  Teaser + exec summary; CIM outline with cites

•  Data room index; permissions; watermarking; changelog

•  Customer cohorts; pricing history; references lined up

•  Contract abstracts; assignability/change-of-control confirmed

•  Org chart; comp & incentive docs; HR policies

•  Systems map; security basics; export paths

•  Buyer longlist; outreach plan; NDA/Q&A workflows

•  Diligence calendar; responsibilities; comms plan

•  Valuation range with levers to improve

  
  

Where we can help

• Exit Readiness & Valuation: indicative range, normalization, materials, data room, 30/60/90 plan.

• Sell-Side Process: curated outreach, multi-round bidding, LOI structure, diligence to close.

• Legacy & People: continuity planning for leadership, employees, and customers.