Preparing your Business for Acquisition
Most founders spend their days focused on growth—how to get more customers, increase revenue, and expand their business. But what happens when it’s time to move on?
On After the First Million, I sat down with Alexis Grant, the Founder & CEO of They Got Acquired, to talk about a topic too many entrepreneurs ignore until it’s too late: selling your business. Alexis has been through the process twice, selling two media companies, and she’s made it her mission to help founders navigate the complex, often overwhelming, world of acquisitions.
Selling a Business Isn’t Just for Big Companies
When people think of business acquisitions, they picture billion-dollar tech deals.
But Alexis focuses on something different—the smaller but still life-changing exits that founders of six, seven, and low eight-figure businesses experience. These are the kinds of deals that don’t make the headlines but still give founders the financial freedom to move on to their next venture or take a well-earned break.
“I sold two media businesses and felt like I didn’t know what I was doing. I didn’t know how to find someone to help me. I felt like there weren’t resources out there for people like me,” Alexis told me.
That frustration led her to create They Got Acquired, a resource dedicated to helping founders prepare for—and successfully navigate—selling their companies.
The Mistakes Founders Make When Selling
For many entrepreneurs, the decision to sell isn’t something they plan for, it’s something they stumble into.
Maybe a competitor reaches out with an offer, or burnout forces them to consider an exit. But Alexis believes the best sales happen when founders prepare long before they’re ready to sell.
“Sell before you’re burned out,” she said. “You certainly can sell when you’re burned out, but if you can sell before then, you have way more options.”
She pointed out three common mistakes founders make when thinking about an exit:
- They wait too long. The best time to sell is when the business is growing, not when it’s declining. Too many founders only consider selling when they’re exhausted and revenue is starting to dip. That’s when valuations drop, and leverage disappears.
- Their financials are a mess. Buyers want clarity. “I see a lot of founders who say, ‘Oh, but this is a $10 million business.’ But if you don’t have cash flow, if there’s no profit, a buyer might not be interested in it.”
- They don’t think about transition. If a business depends entirely on its founder, it’s much harder to sell. “If your face is on everything, if you’re in every key decision, that’s a problem,” Alexis explained. Buyers want businesses that can operate without the original owner.
What Founders Can Do Today to Prepare for an Exit
Even if you’re not thinking about selling now, Alexis says there are steps you can take to make your business acquisition-ready:
- Keep clean books. Messy financials can kill a deal in due diligence. “I’ve seen founders lose out on a great offer because, during due diligence, buyers realized the numbers weren’t accurate.”
- Build a company that isn’t dependent on you. If you’re the face of the business and the only one making key decisions, buyers will see that as a risk.
- Know your number. Too many founders have an unrealistic idea of what their business is worth. “I always ask founders, ‘If someone offered you this number today, would you sell?’ And it’s fascinating how many people either have no clue or are completely off-base.”
Thinking Like a Buyer
One of the biggest mindset shifts Alexis encourages founders to make is to start looking at their business the way a buyer would. Buyers aren’t just paying for what your business is today—they’re paying for what they think it will be in the future. That’s why strong, growing businesses get better valuations than those that are stagnant or declining.
“If the business is going up and starts to go down, that’s when you don’t want to sell. You’re going to get a lot less for the business,” Alexis said. “Sometimes, the best time to sell is before you’re ready.”
Selling a business doesn’t have to be overwhelming, but it does require preparation. Whether you’re years away from considering an exit or starting to feel like it might be time, Alexis’s advice is clear: Think about your exit before you need one.
Want to hear more? Listen to my full conversation with Alexis on After the First Million.
