When CEOs talk about selling their businesses, the conversation usually centers on valuation, buyers, and timing. Those are important topics, but looking back on the sale of Kurgo and the many conversations I've had with CEOs who have gone through similar transactions, I've come to believe that the most important decisions are often made years before a company ever goes to market.
At the time, I didn't think of those decisions as preparation for a sale. I thought of them as decisions that would help us build a stronger company. Looking back, I don't think there's much difference. Many of the things that make a business more valuable to a buyer also make it a better run business.
Here are five considerations I'd encourage any CEO to think about long before a transaction is on the horizon.
One of the most valuable things we did at Kurgo was bring in people who understood transactions long before we were contemplating a sale.
We hired someone with experience in both private equity and investment banking, and he immediately began looking at the company differently than I did. While I was focused on customers, products, growth, and operations, he was looking at the business through the eyes of an investor. He helped us think about how our financials were organized, what contracts would matter during diligence, what information buyers would want to see, and how we should prepare for questions we hadn't even considered.
As we got closer to a transaction, the same lesson applied to our advisors. I had worked with the same accountant and lawyer for years. They were talented professionals, but they were not transaction specialists. We eventually transitioned to advisors with deep deal experience because the skills required to operate a business and the skills required to navigate a sale are not the same.
If there is one lesson I would emphasize, it is that selling a business is not something most CEOs should try to figure out on their own. Having experienced people around the table changes the quality of the decisions that get made and paves the way to make over the finish line with the best outcome.
One of the most useful things I did over the years was spend time with investment bankers before I had any intention of selling.
The joke is that they'll happily take you for a fancy steak dinner. And that is true. Building relationships is part of their business. But there is also real value in those conversations.
Investment bankers spend their days talking to buyers, investors, founders, and CEOs. They see transactions across industries and develop a perspective on what is driving value in the market. More importantly, each banker tends to have a slightly different perspective. One may have deep knowledge of strategic buyers. Another may understand private equity particularly well. A third may have insights into industry trends that you haven't considered.
Recently, one CEO in our membership shared that after being encouraged to meet with several bankers rather than just one, he came away from each conversation with different ideas about valuation, competition, growth opportunities, and how buyers might view his business. None of those conversations led directly to a transaction, but all of them helped him think differently about building value.
Like most CEOs, I received unsolicited inquiries while running Kurgo. Today, at Katahdin, we see the same thing. In fact, several members of our team receive those inquiries because the sender isn't entirely sure who the CEO is.
The reality is that interest is plentiful. Serious opportunities are much less common.
Over the years, I've watched many CEOs wrestle with unsolicited offers. While on occasion those conversations can lead to excellent outcomes, more often, they become a distraction. A buyer expresses interest, the owner becomes intrigued, and months are spent pursuing a single opportunity that may or may not materialize.
One of the CEOs in our network recently shared his experience after receiving an unsolicited offer. Rather than pursuing that buyer alone, he engaged an investment banker and ran a broader process. Approximately 275 potential buyers were contacted, resulting in 18 bids, 12 management presentations, and ultimately a transaction that exceeded the original offer by roughly 40 percent.
The lesson here was that a single buyer rarely provides enough information to make a fully informed decision. A process creates options, and options create leverage.
I've also seen the opposite outcome. One business owner spent months pursuing a single unsolicited offer, investing significant time, attention, and hundreds of thousands of dollars in legal and transaction expenses. When the buyer ultimately walked away, there were no alternative bidders waiting in the wings and no transaction to show for the effort.
The contrast between those two experiences highlights an important reality: interest from one buyer may be encouraging, but competition is what creates clarity, leverage, and ultimately better outcomes.
One thing that consistently surprises founders and CEOs is how buyers evaluate a business.
We tend to focus on innovation, growth initiatives, new products, and the things that make our companies unique. Buyers care about those things, but they also spend a great deal of time evaluating predictability.
They want confidence in the financials. They want recurring revenue. They want clean contracts, strong reporting, and a leadership team that is capable of running the business without the founder involved in every important decision.
In many industries, valuation is driven less by revenue growth alone and more by profitability, consistency, and confidence in future performance. Those characteristics may not be as exciting as a breakthrough product launch, but they often have a meaningful impact on value.
Selling a business is one of the most significant decisions a CEO will ever make. Yet many of the factors that determine the outcome are established long before a letter of intent arrives.
Build relationships before you need them. Seek advice from people who understand the market. Surround yourself with advisors who have transaction experience. Learn how buyers think. Strengthen the systems and processes that make your company more predictable and resilient.
Whether a sale ultimately happens next year, ten years from now, or not at all, that work tends to pay dividends. It creates a stronger business, a more informed CEO, and far more options when opportunities arise.
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