The decisions you make in the first thirty days of a PE approach often determine the outcome of a process that takes twelve months to complete.
A private equity approach can move fast. The conversation feels exploratory. The paperwork comes later. By the time it does, a lot has already been decided.
This page is for founders who want to understand what they are agreeing to before they agree to it.
Where this fits
Demand → Pricing → Cash → EBITDA → Network → Visibility → Value
Once a process starts, it has momentum. The buyer has a timeline. Their advisors are billing. The information you share in the early stages shapes what happens in the later ones. And the offers that come in — and how they are structured — reflect everything the buyer has learned about your business, compared to everything you have not yet thought to protect.
Most founders engage too early. Not because they are not smart. Because the approach feels preliminary, the buyer is credible, and the social pressure of an interested party is harder to slow down than it sounds.
Before you say yes to anything — first meeting, information request, letter of intent — there are things you need to know. This page covers them.
The number on your P&L is not the number the buyer will use. They will normalise it — removing items they consider non-recurring, adjusting for owner-specific costs, and challenging anything they believe overstates performance.
You need to know what your normalised EBITDA is before they calculate it. If you do not, their number becomes the frame of reference for everything that follows.
What this means in practice: your adjusted earnings may be lower than you expect. Knowing the number early — and understanding what is driving the difference — gives you time to address it before a process starts.
At settlement, the buyer will assess the working capital in the business against a normalised level. If your debtors are elevated, inventory is heavy, or creditor terms are unusually tight, this reduces the net proceeds you receive — sometimes materially.
Most founders discover the working capital adjustment at the end of a process, when it is too late to do anything about it.
What this means in practice: improving debtor days, tightening inventory, and structuring supplier terms before a sale directly increases what you walk away with at settlement.
If one or two customers represent a significant share of your revenue, this is the first thing a buyer will identify as risk. It is also the hardest thing to fix quickly. Knowing where you stand — and what you can do about it in the time available — is preparation, not panic.
Customer tenure, spend history, and formal agreements all reduce the perceived risk of concentration even when the revenue share cannot be changed in twelve months.
A business that can only perform with you present is a different risk profile — and different deal structure — to one with a functional leadership layer below the founder. Buyers will price the dependency in. That usually means earn-out provisions, retention arrangements, or reduced upfront cash.
Demonstrating that the team can run operations independently is the highest-return preparation activity for most founder-led businesses.
Private equity processes are longer, more intensive, and more revealing than most first-time sellers expect. Understanding what is involved — before you enter one — is the only way to make a genuinely informed decision about whether to proceed.
Every stage of a process involves sharing information. At first it is summary financial data. Then detailed management accounts, customer lists, and revenue breakdowns. Then full due diligence access. Each stage gives the buyer more information about your business — and potentially more grounds to adjust the offer. Knowing what you are sharing, and when, is important from the first conversation.
Due diligence for a private equity acquisition runs across financial, legal, commercial, and operational workstreams simultaneously. It is thorough by design. The businesses that come through with their valuation intact are the ones that were prepared for the scrutiny. Surprises discovered during diligence — rather than disclosed upfront — are used as grounds for price adjustment.
What this means in practice: run your own version of due diligence before they run theirs. Find the issues first. Decide what to fix and what to disclose. That sequence gives you control. Discovery by the buyer does not.
The headline offer is not necessarily what you receive. The net proceeds depend on the working capital peg, any debt in the business, the structure of the consideration — cash at completion, deferred payments, earn-out components — and the adjustments that emerge from due diligence. Understanding how a deal is structured before you enter one is not pessimism. It is preparation.
Even where a founder retains equity post-sale, the buyer controls material decisions. Capital allocation, acquisitions, changes to remuneration, exit timing — all of these sit with the PE firm. Understanding what you give up in terms of control — and whether that is something you can live with — is part of the decision, not an afterthought.
Built by an operator who has scaled and exited businesses across private equity, listed and private environments. View track record →
Built on real operating and private equity metrics — not generic multiples.
Used by founders and operators preparing for growth, capital or exit.
Start valuation →Do you know what actually drives your valuation?
What do you actually want from the transaction?
Liquidity, a clean exit, retained involvement, a second bite at the upside through rollover equity — these produce different deal structures. An undifferentiated desire to sell is not a strategy. Knowing what you want determines which buyers, which terms, and which timing are appropriate.
What would you do if you did not sell?
For many founders, this question reveals that what they want is not a sale — it is relief from a specific burden. If the burden is owner dependency, addressing it through preparation creates options. If it is financial risk, a partial sale may be more appropriate. Understanding the actual problem first prevents solving it with the wrong instrument.
Is the timing right for the business — not just for you?
A business sold at the peak of its earnings trajectory achieves a better outcome than one sold during a period of uncertainty or transition. If the business has issues that would surface in due diligence — customer concentration, inconsistent margin, owner dependency — those issues should be addressed before going to market, not disclosed during one.
Do you have an independent view of what the business is worth?
Without your own number — arrived at independently, before any buyer frames the conversation — the buyer's number becomes the reference point. Everything that follows is a negotiation from their starting position. Getting an independent view before you engage is the baseline from which all negotiation should begin.
Have you taken independent advice?
The people advising you on a transaction — brokers, investment banks, lawyers — earn fees when the deal completes. That does not make their advice wrong. But it does mean their incentives are not perfectly aligned with yours. Independent operating-level advice — from someone with no stake in the transaction — is a different thing, and often the most useful.
Are you prepared for what comes after?
The period following a PE transaction is not a natural continuation of what you have been doing. The governance changes. The reporting requirements change. The relationship with your team and customers changes. Some founders find this liberating. Others find it genuinely uncomfortable. Knowing which you are likely to be — before you commit — is worth understanding.
This is usually where things get misread.
The questions above are easy to think about in the abstract and hard to think about clearly once a process has momentum. If you want to work through them before that happens, we can do that.
→ Discuss your situationThat is not a reason not to sell. It is a reason to take time before you engage.
Twelve months of deliberate preparation — on earnings quality, working capital, customer documentation, and team capability — produces a measurably different outcome than responding to an approach unprepared. The difference is not marginal. At a 6x multiple, a $300,000 improvement in defensible EBITDA is $1.8 million in enterprise value.
The diagnostic is the starting point. It gives you a view of where your business sits against the criteria buyers apply — and where the gaps are that are worth closing before you go to market.
If you need a senior operator to work through a specific issue — pricing, margin, working capital, owner dependency — that option exists too. It does not require a full mandate. It requires a defined problem and a decision point.
Further reading on the specific questions:
If you want to understand your position first
→ Run the diagnosticIf you’d rather work through it with someone first
→ Discuss your situationIf you’re already in a process or have received an approach
→ Start with the diagnosticMost founders misjudge valuation. Get clarity in minutes using a structured commercial model.
Start valuation →What should I do before responding to a PE approach?
Understand your own position first. Know your normalised EBITDA, understand your working capital position, and have an independent view of what the business is worth. Then decide whether now is the right time to engage — not just whether the buyer seems credible.
How is business valuation determined in a PE transaction?
Using an EBITDA multiple applied to your adjusted operating earnings. The multiple reflects sector, quality, and risk. Your net proceeds depend on that headline number adjusted for working capital, debt, and any earn-out or deferred payment components.
What is due diligence and how should I prepare for it?
Due diligence is a structured investigation of your business by the buyer and their advisors. It covers financial, legal, commercial, and operational workstreams. Preparation means running your own version first — finding the issues before they do and deciding what to fix versus disclose.
Can I change my mind once a sale process starts?
Yes, until you sign binding documents. But each stage has momentum, costs, and relationship dynamics that make withdrawal progressively harder. Deciding clearly on direction before you invest significantly in a process is better than withdrawing under time pressure.
What is the difference between enterprise value and what I actually receive?
Enterprise value is the headline transaction price. Your actual proceeds depend on the debt in the business at settlement, the working capital position, any earn-out components, and adjustments that emerge from due diligence. Understanding the gap before you agree to a headline number is essential.
Built by an operator who has scaled and exited businesses across private equity, listed and private environments. View track record →
Built on real operating and private equity metrics — not generic multiples.
Used by founders and operators preparing for growth, capital or exit.
Start valuation →This perspective is based on operating and scaling businesses across manufacturing, distribution and industrial sectors, including private equity-backed environments.