I had a conversation with a client this week about selling their business.
Not in the traditional sense.
No cash upfront.
No clean break.
Instead, their shares get rolled into a larger group that's acquiring businesses like theirs. They'd own a smaller slice of something much bigger.
The idea is simple. Sell today at three to four times EBITDA, stay invested, and when the group eventually sells at six to ten times, everyone wins.
It's a compelling story. But it's also a second bet.
You're giving up control of your business today in exchange for a future outcome you don't fully control. And that changes everything.
In some cases the founder stays on as part of the leadership team. They have influence, but it's not the same as owning the business outright. In other cases the founder steps away fairly quickly.
At that point, the outcome is entirely dependent on the group doing what it said it would do.
Either way, you're now part of a much bigger structure.
More people.
More layers.
Often private equity involvement.
You answer to a leadership team. They answer to investors. It's a very different environment to the one you've been operating in.
For some founders this works extremely well. For others, they realise too late they preferred running their own business to being a small part of someone else's.
There's no right or wrong answer. But you need to be clear on what you're actually doing.
You're not just selling your business.
You're choosing what kind of game you want to play next.
Until next week,
Luke