February 2026 Newsletter
Exit Strategies for Founder-Owned Companies
I have often said that building a company is like pushing a huge boulder straight up an extremely steep mountain. In other words, you have worked very hard to grow your business so a strong Exit Strategy is vitally important to your ultimate success.
Selling your business can be a once in a lifetime, emotional event for most CEOs and business owners. You need advisors to help guide you through a sale, which can be complex and needing a lot of experience and expertise. Don’t misstep on the final step to realizing the optimal value you have worked so hard to achieve.
For sellers, proactive preparation is absolutely critical. Whether you are selling to a strategic buyer or bringing on a private equity firm partner to fuel additional growth, the process you develop and follow will play a critical role in creating value for the CEO and shareholders. This entire sale process should include a mergers and acquisitions (M&A) advisory firm like CEO Advisor, Inc., a transaction attorney, and a CPA or tax advisor.
Every CEO or business owner eventually experiences an inflection point in their company and their life. Whether you ultimately sell, merge or choose a different Exit Strategy there are critical decisions that require thought and planning.
Regardless of your reason for selling your company, CEOs and business owners have several options how they can best exit their businesses. Below are five Exit Strategy options. By securing an M&A advisor, attorney and CPA firm, any of these options should generate a positive result.
Five Exit Strategies for CEOs and Business Owners of Privately-held Companies:
Selling your business can be a once in a lifetime, emotional event for most CEOs and business owners. You need advisors to help guide you through a sale, which can be complex and needing a lot of experience and expertise. Don’t misstep on the final step to realizing the optimal value you have worked so hard to achieve.
For sellers, proactive preparation is absolutely critical. Whether you are selling to a strategic buyer or bringing on a private equity firm partner to fuel additional growth, the process you develop and follow will play a critical role in creating value for the CEO and shareholders. This entire sale process should include a mergers and acquisitions (M&A) advisory firm like CEO Advisor, Inc., a transaction attorney, and a CPA or tax advisor.
Every CEO or business owner eventually experiences an inflection point in their company and their life. Whether you ultimately sell, merge or choose a different Exit Strategy there are critical decisions that require thought and planning.
Regardless of your reason for selling your company, CEOs and business owners have several options how they can best exit their businesses. Below are five Exit Strategy options. By securing an M&A advisor, attorney and CPA firm, any of these options should generate a positive result.
Five Exit Strategies for CEOs and Business Owners of Privately-held Companies:
1. Sale to a Strategic Buyer
A strategic buyer is a business in the same or related industry that provides similar or synergistic products and services. Strategic buyers target companies that offer substantial strategic value and efficiencies. The buyer may be seeking to increase market share by acquiring the seller’s customer base and technology or expanding geographically.
Strategic buyers tend to pay a higher purchase price than financial buyers (Private Equity firms) since the acquisition can lead to greater growth and value. If your Exit Strategy is to sell to a strategic buyer, the primary focus should be on, a) Strengthening your customer and vendor relationships as you approach a sales process, b) On growth and c) On higher Gross Profit Margins and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
SELL TO A STRATEGIC BUYER
Goal: Cost and Expense Synergies & Market Share GrowthBuyer: Industry-related or geographic expansion–related companyBenefit: Higher cash at closing and higher priceStrategy: Strengthen customer and vendor relationships and leverage the larger sales team of the buyer by cross-selling products and services 2. Sale to a Financial (Private Equity) Buyer
Private Equity firms are financial buyers and target companies with strong growth potential they can resell later at a profit. For example, their goal may be to triple Revenue and EBITDA over a five to seven-year time frame in order to resell the company at an optimal ROI.
A key benefit of selling to a Private Equity (PE) buyer is that you may be able to maintain operational control of the company for the most part, as well as an equity interest by retaining a minority position. These buyers often ask CEOs and business owners to remain in a management role for a period of time to lend their expertise and help grow the company. Acquisitions by PE financial buyers can be completed more quickly and valuations tend to be predictable provided the seller has strong financial statements. SELL TO A FINANCIAL (PRIVATE EQUITY) BUYER
Goal: Grow & then resell the business in 5 – 7 years to a strategic or PE firm buyerBuyer: Private Equity firmBenefit: Retain some control & financial interest for a second bite at the appleStrategy: Position yourself to stay involved in management
3. Sell/Gift the Business to Family Members
You may decide to keep your business in the family by gifting or selling it to one or multiple family members. Your tax advisor is critical here and a qualified appraiser should perform a business valuation to determine if gift taxes are due. An Exit Strategy of selling to family members includes preparing for succession to gradually transition the ownership interest of the business. You can gift or sell a minority interest over time to family members working in the business while you maintain a controlling interest for a period of time. Options include establishing an employee stock ownership plan (ESOP) and others.
SELL/GIFT THE BUSINESS TO YOUR FAMILY
Goal: Gift or sell to one or multiple family membersBenefit: Tax implications, flexible financing, preserve the business in the familyStrategy: Gradual ownership transfer to one or multiple family members for tax and continuity purposes
4. Merge with Another Business There are different kinds of business mergers such as horizontal mergers, in which two businesses in the same market segment merge together, and vertical mergers, in which a business merges with a supplier to improve supply chain processes and control over distribution channels. A “merger of equals” may result in a tax-free exchange of stock while also eliminating a competitor. Mergers can be especially complex so always secure a team of advisors.
MERGE WITH ANOTHER BUSINESS
Goal: Merger of Equals; Tax synergies and advantagesTypes: Horizontal (same market) or vertical (supplier), othersBenefits: Eliminate competition, improve efficiency, possible tax-free transactionStrategy: Assess strategic fit financially and practically
5. Dissolve the Company
If all else fails, and sometimes for the best, CEOs and business owners must make the extremely tough decision to dissolve the company. This can be a reality for some. In most cases, early on and proactive decisions can circumvent a dissolution, but this takes a strong leader with strong advisors thinking clearly and making extremely hard decisions. But business dissolution is a viable Exit Strategy in particular situations.
DISSOLVE THE COMPANY
Goal: Exit quickly and efficientlyBenefits: Cut losses; effective and finalStrategy: Works as a Plan B when business viability is no longer feasible or the business is insolvent An M&A advisory firm can be a great first step in assessing your Exit Strategy options and preparing for a future sale. Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. at (949) 629-2520, by mobile phone at (714) 697-3370, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
A strategic buyer is a business in the same or related industry that provides similar or synergistic products and services. Strategic buyers target companies that offer substantial strategic value and efficiencies. The buyer may be seeking to increase market share by acquiring the seller’s customer base and technology or expanding geographically.
Strategic buyers tend to pay a higher purchase price than financial buyers (Private Equity firms) since the acquisition can lead to greater growth and value. If your Exit Strategy is to sell to a strategic buyer, the primary focus should be on, a) Strengthening your customer and vendor relationships as you approach a sales process, b) On growth and c) On higher Gross Profit Margins and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization).
SELL TO A STRATEGIC BUYER
Goal: Cost and Expense Synergies & Market Share GrowthBuyer: Industry-related or geographic expansion–related companyBenefit: Higher cash at closing and higher priceStrategy: Strengthen customer and vendor relationships and leverage the larger sales team of the buyer by cross-selling products and services 2. Sale to a Financial (Private Equity) Buyer
Private Equity firms are financial buyers and target companies with strong growth potential they can resell later at a profit. For example, their goal may be to triple Revenue and EBITDA over a five to seven-year time frame in order to resell the company at an optimal ROI.
A key benefit of selling to a Private Equity (PE) buyer is that you may be able to maintain operational control of the company for the most part, as well as an equity interest by retaining a minority position. These buyers often ask CEOs and business owners to remain in a management role for a period of time to lend their expertise and help grow the company. Acquisitions by PE financial buyers can be completed more quickly and valuations tend to be predictable provided the seller has strong financial statements. SELL TO A FINANCIAL (PRIVATE EQUITY) BUYER
Goal: Grow & then resell the business in 5 – 7 years to a strategic or PE firm buyerBuyer: Private Equity firmBenefit: Retain some control & financial interest for a second bite at the appleStrategy: Position yourself to stay involved in management
3. Sell/Gift the Business to Family Members
You may decide to keep your business in the family by gifting or selling it to one or multiple family members. Your tax advisor is critical here and a qualified appraiser should perform a business valuation to determine if gift taxes are due. An Exit Strategy of selling to family members includes preparing for succession to gradually transition the ownership interest of the business. You can gift or sell a minority interest over time to family members working in the business while you maintain a controlling interest for a period of time. Options include establishing an employee stock ownership plan (ESOP) and others.
SELL/GIFT THE BUSINESS TO YOUR FAMILY
Goal: Gift or sell to one or multiple family membersBenefit: Tax implications, flexible financing, preserve the business in the familyStrategy: Gradual ownership transfer to one or multiple family members for tax and continuity purposes
4. Merge with Another Business There are different kinds of business mergers such as horizontal mergers, in which two businesses in the same market segment merge together, and vertical mergers, in which a business merges with a supplier to improve supply chain processes and control over distribution channels. A “merger of equals” may result in a tax-free exchange of stock while also eliminating a competitor. Mergers can be especially complex so always secure a team of advisors.
MERGE WITH ANOTHER BUSINESS
Goal: Merger of Equals; Tax synergies and advantagesTypes: Horizontal (same market) or vertical (supplier), othersBenefits: Eliminate competition, improve efficiency, possible tax-free transactionStrategy: Assess strategic fit financially and practically
5. Dissolve the Company
If all else fails, and sometimes for the best, CEOs and business owners must make the extremely tough decision to dissolve the company. This can be a reality for some. In most cases, early on and proactive decisions can circumvent a dissolution, but this takes a strong leader with strong advisors thinking clearly and making extremely hard decisions. But business dissolution is a viable Exit Strategy in particular situations.
DISSOLVE THE COMPANY
Goal: Exit quickly and efficientlyBenefits: Cut losses; effective and finalStrategy: Works as a Plan B when business viability is no longer feasible or the business is insolvent An M&A advisory firm can be a great first step in assessing your Exit Strategy options and preparing for a future sale. Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. at (949) 629-2520, by mobile phone at (714) 697-3370, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
Invest in Yourself in 2026 - 5 Critical Steps
As a business owner and CEO, you make investments in your business on an on-going basis. The question is – are you investing in yourself? Investing in yourself and your business may generate the largest return on any investment you can make anywhere on this planet.
Investing in yourself - whether growing your business or selling your company - will ensure you are making the best decisions and enables you to better dictate your future and your success. Investing in yourself will add critical skills (remedy your blind spots) that will be the difference in far greater success. Investing in yourself and your business also enables you to increase sales, profits and the value of your business toward an exit and the largest payday of your life.
Different than investing in real estate, bonds or equities, investing in yourself is the key to your success provided you have the proper advice and road map to achieve your goals. Don't go it alone - this may be the most important step of your life. Meet with a business or mergers and acquisitions (M&A) advisor to discuss the steps below, and to address the specific needs of both you and your company.
“Investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you. They can run up huge deficits and the dollar can become worth far less. You can have all kinds of things happen. But if you've got talent yourself, and you've maximized your talent, you've got a tremendous asset that can return 10-fold,” Buffett said during an interview with ABC News.
Here are 5 steps you can take right now that will pay tremendous dividends:
Investing in yourself - whether growing your business or selling your company - will ensure you are making the best decisions and enables you to better dictate your future and your success. Investing in yourself will add critical skills (remedy your blind spots) that will be the difference in far greater success. Investing in yourself and your business also enables you to increase sales, profits and the value of your business toward an exit and the largest payday of your life.
Different than investing in real estate, bonds or equities, investing in yourself is the key to your success provided you have the proper advice and road map to achieve your goals. Don't go it alone - this may be the most important step of your life. Meet with a business or mergers and acquisitions (M&A) advisor to discuss the steps below, and to address the specific needs of both you and your company.
“Investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you. They can run up huge deficits and the dollar can become worth far less. You can have all kinds of things happen. But if you've got talent yourself, and you've maximized your talent, you've got a tremendous asset that can return 10-fold,” Buffett said during an interview with ABC News.
Here are 5 steps you can take right now that will pay tremendous dividends:
1. Strategic DirectionThe direction of your business is critical to your success, especially if you are considering selling your business. Now is the time to re-assess, strategize and assess your progress and make needed adjustments in your business. Growing 10% year after year is not a gauge of success, and certainly will not increase the value of your business. With a clear strategy and sales focus you will ensure success in 2026 and beyond. For over 20 years, CEO Advisor, Inc. has helped CEOs create strategies for increased sales, profits and business value toward an optimal exit. We are experts in selling companies and can help every step of the process.
2. FocusIf you are not sure where you're going, you will never get there. Focus on your highest priorities and document your priorities with target completion dates and who will accomplish them. If you are thinking about selling your company, seek an M&A advisor like CEO Advisor, Inc. to assist you in preparing for a sale. Focus on what meets prospects and customers' needs, drives sales and profits, and builds value in your company. A business/M&A advisor that specializes in working with small and mid-size company CEOs can be a tremendous asset to you and your company by working with you weekly hands-on to achieve your goals.
3. Review the NumbersCreate key metrics in a Management Dashboard for your business that will clearly tell you if you are on track to achieve results, maximize profits and optimize the value of your business. This will provide easy to access information that is critical to success. Review your Financials and make sure to understand your Financial Statements thoroughly so you can address specific aspects of your business and make needed decisions based on your Financials. Track these key metrics and Financials monthly as a critical step in the health, growth and success of your business.
Defining and tracking these key metrics will substantially increase sales and profits, enabling you to make faster and improved decisions. CEO Advisor, Inc. regularly assists CEOs in setting up these key metrics in a Management Dashboard to drive success and can help you analyze your Financials and provide feedback on how to maximize your profits and valuation.
4. Set Your Goals and Develop an Exit StrategyEstablish clear near-term and long-term goals for both you and your business. Create and prioritize major initiatives and deadlines around what is needed to accomplish these goals. Then, develop a clear Exit Strategy as a path to prepare for and sell your business. This can be one of the best decisions you can make so act on it.
5. Invest in Needed AdviceThe business and mergers and acquisitions issues above are just some of the more critical issues that you must tackle every day. The impact on your business, your life, your bottom line, your cash flow and the value of your business is tremendous. A trusted, seasoned business / M&A advisor can be the difference in your business success and achieving your life's dreams of a successful exit. CEO Advisor, Inc. provides trusted, affordable advisory services that will impact your life tremendously.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by mobile phone at (714) 697-3370, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
2. FocusIf you are not sure where you're going, you will never get there. Focus on your highest priorities and document your priorities with target completion dates and who will accomplish them. If you are thinking about selling your company, seek an M&A advisor like CEO Advisor, Inc. to assist you in preparing for a sale. Focus on what meets prospects and customers' needs, drives sales and profits, and builds value in your company. A business/M&A advisor that specializes in working with small and mid-size company CEOs can be a tremendous asset to you and your company by working with you weekly hands-on to achieve your goals.
3. Review the NumbersCreate key metrics in a Management Dashboard for your business that will clearly tell you if you are on track to achieve results, maximize profits and optimize the value of your business. This will provide easy to access information that is critical to success. Review your Financials and make sure to understand your Financial Statements thoroughly so you can address specific aspects of your business and make needed decisions based on your Financials. Track these key metrics and Financials monthly as a critical step in the health, growth and success of your business.
Defining and tracking these key metrics will substantially increase sales and profits, enabling you to make faster and improved decisions. CEO Advisor, Inc. regularly assists CEOs in setting up these key metrics in a Management Dashboard to drive success and can help you analyze your Financials and provide feedback on how to maximize your profits and valuation.
4. Set Your Goals and Develop an Exit StrategyEstablish clear near-term and long-term goals for both you and your business. Create and prioritize major initiatives and deadlines around what is needed to accomplish these goals. Then, develop a clear Exit Strategy as a path to prepare for and sell your business. This can be one of the best decisions you can make so act on it.
5. Invest in Needed AdviceThe business and mergers and acquisitions issues above are just some of the more critical issues that you must tackle every day. The impact on your business, your life, your bottom line, your cash flow and the value of your business is tremendous. A trusted, seasoned business / M&A advisor can be the difference in your business success and achieving your life's dreams of a successful exit. CEO Advisor, Inc. provides trusted, affordable advisory services that will impact your life tremendously.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc. for a no cost initial consultation at (949) 629-2520, by mobile phone at (714) 697-3370, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
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