Buyers price founder dependency directly. What feels like indispensability to the owner reads as risk to the acquirer.
A system that produces a result without the current owner operating it.
That is the whole thing. Revenue matters, margin matters, but what determines the multiple is the buyer's confidence that the performance continues after you leave. Every decision that requires you is a reason for that confidence to drop.
Three ways, and only one of them is visible in the numbers.
The multiple compresses. Buyers discount owner-dependent businesses because they are buying more risk, and they know it.
The structure changes. Earnouts get longer, transition periods get extended, and more of the price becomes contingent on you staying. That is the buyer transferring the dependency risk back to you.
Some buyers walk. Strategic acquirers and disciplined private buyers pass on businesses where the operating knowledge is unwritten, because integration is where that risk becomes their problem.
No, and this is the part owners tend to miss.
Everything that makes a business sellable is the same thing that makes it good to own. Decisions that happen without you, a leadership team that holds the standard, strategy that exists in the business rather than in your head. Those produce optionality whether or not you exercise it.
The owner who has built a sellable business and chooses not to sell has bought something more valuable than the sale. He has bought the choice.
Ask it as a diligence question rather than a feelings question.
If someone read your documented processes, your leadership structure, and your decision rights, could they run this company? Not perfectly. Adequately. If the honest answer is that they would need you for six months, that is your dependency, priced.
The purpose is diagnosis, not performance. We will tell you what we see, including when what you need is not us. If there is a fit, we say so directly. If there is not, we say that too.
Apply for a Conversation