Most Founders Leave 6 Figures on the Table When They Sell. Here’s Why.
Below the $8 million mark, no banker is in the room telling you what your business is actually worth — but the levers that decide it are knowable, and most of them can be pulled years before a buyer ever calls.
The fact that most founders leave six figures on the table when they sell their business is a staggering statistic, especially for the talent that drives these startups. It highlights the importance of understanding the value levers that drive a company's worth, even for those who may not be planning to exit anytime soon. For talent working in startups, this knowledge can be crucial in making informed decisions about their own career paths and the companies they choose to work for.
The reason why founders often miss out on maximizing their sale value is that below the $8 million mark, they typically don't have access to professional advice from bankers or other experts who can provide guidance on the true worth of their business. However, the factors that determine a company's value are not unknown, and many of them can be influenced years in advance of a potential sale. This means that founders and talent alike can take proactive steps to build value in their companies, even if they're not planning to sell in the near future.
As the startup ecosystem continues to evolve, it will be interesting to watch how founders and talent respond to this information. Will we see a shift towards more founders seeking out professional advice earlier in their company's lifecycle, or will they take a more DIY approach to understanding their business's value? For talent, the key takeaway is that understanding the value levers of a company can be a key factor in making informed career decisions, and those who take the time to learn about these factors may find themselves better positioned for success in the long run.
Originally reported by entrepreneur.com. TalentNews adds analysis for business & startups readers.