Exit Strategy Company: How to Find the Right M&A Partner

What Is an Exit Strategy Company?

An exit strategy company is a firm that helps business owners sell their companies, merge with other businesses, or prepare for acquisition. These firms go by different names depending on their size and specialty: investment banks, M&A advisors, business brokers, exit planners, or corporate finance advisors.

I've worked with several of these firms across my 5 SaaS exits, and the quality varies wildly. Some delivered exactly what they promised and earned every penny of their success fee. Others were glorified listing services that did little more than post my business on a marketplace and wait for inbound interest.

The right exit strategy company doesn't just find you a buyer. They position your business strategically, run a competitive auction process, negotiate aggressively on your behalf, and manage the due diligence process so you can keep running your company instead of drowning in data room requests.

Types of Exit Strategy Companies

Investment Banks

Investment banks handle the largest deals, typically $50M+ in enterprise value. They have deep industry relationships, can reach strategic buyers and private equity firms globally, and run sophisticated auction processes. Firms like Houlihan Lokey, Raymond James, and William Blair dominate the middle market.

The downside? They're expensive, with retainers often running $50K-$200K plus success fees of 2-5%. And if your business is under $20M in value, most won't even take your call.

M&A Advisors

M&A advisors sit between investment banks and business brokers. They handle deals from $5M to $100M, typically charging smaller retainers or working on success fees only. Quality varies significantly here.

The best M&A advisors specialize in specific industries. If you're selling a SaaS company, you want someone who lives and breathes software deals, understands SaaS metrics like CAC payback and net dollar retention, and has relationships with software-focused buyers and PE firms.

Business Brokers

Business brokers typically handle smaller deals under $5M. They list your business on marketplaces, screen buyers, and facilitate transactions. Think of them as real estate agents for businesses.

For small businesses with straightforward operations, a good broker can be perfectly adequate and much more affordable than an investment bank. But don't expect sophisticated positioning or competitive tension in the deal process.

Exit Planning Firms

Exit planning firms focus on the years-long process of preparing a business for sale rather than the transaction itself. They help you increase valuation, clean up operations, build management teams, and create transferable value.

These firms are useful if you're 3-5 years away from wanting to exit and need to professionalize your business. But when it's time to actually sell, you'll still need a transaction-focused firm.

When Do You Actually Need an Exit Strategy Company?

Not every business owner needs to hire an exit strategy company immediately. The timing of when you engage one matters as much as who you choose.

If you're serious about selling within the next 12-18 months and your business is doing at least $2M in annual revenue, you probably need professional help. Below that threshold, the fees often consume too much of the transaction value. Above it, you'll likely leave significant money on the table going solo.

The exception is if you already have a qualified buyer who approached you directly with a serious offer. In that case, you might only need a good M&A attorney to review documents and negotiate terms. I've done this once, and it saved me the advisor fee while still protecting my interests.

But if you're fielding multiple interested parties, don't have existing buyer relationships, or need to maximize valuation through competitive tension, bring in an advisor early. Trying to run your own auction process while also running your business is a recipe for burnout and mistakes.

The worst time to engage an exit strategy company is when you're desperate to sell. Maybe cash flow is tight, you're burned out, or you have personal circumstances forcing a quick exit. Advisors can smell desperation, and so can buyers. You'll get worse terms and lower valuations when everyone knows you need to sell quickly.

What to Look For in an Exit Strategy Company

Industry Specialization

Generic M&A advisors who claim to sell everything from restaurants to software companies are rarely the best choice. You want someone who specializes in your industry and can speak your language.

When I sold my SaaS businesses, I only talked to firms that focused exclusively on software and tech services. They understood the business model, knew the buyer universe, and could position the company in terms buyers actually cared about.

Ask any potential exit strategy company: What percentage of your deals are in my industry? Who have you sold similar companies to? Can I speak with 3-5 of your recent clients in my space?

Buy-Side Relationships

The best exit strategy companies have cultivated relationships with buyers over decades. They know which private equity firms are actively looking for bolt-on acquisitions in your space. They know which strategic acquirers have budgets approved and are ready to move quickly.

This network is what you're really paying for. Any advisor can build a CIM (Confidential Information Memorandum) and blast it to a list of buyers. The elite firms can get your deal in front of the right decision-makers and create genuine competitive tension.

Ask: Can you share examples of repeat buyers you've worked with? How many active buyers do you have relationships with in my industry?

Process and Resources

Selling a company is a massive project. The best exit strategy companies have dedicated resources for every phase: analysts to build financial models, industry research teams, marketing people to create compelling materials, and process managers to run the data room.

One firm I worked with had a six-person team assigned to my deal. Another was basically one advisor and an assistant. Guess which process ran smoother?

Ask to see their standard process timeline, meet the team that would actually work on your deal, and review sample deliverables like CIMs and management presentations.

Fee Structure Alignment

Most exit strategy companies charge a success fee based on the final transaction value, typically using a Lehman formula or variation: 5% on the first million, 4% on the second, and so on. Some charge monthly retainers, others work purely on success fees.

I prefer advisors who have skin in the game through success fees, but be wary of those who push you to take the first offer just to close the deal. The best advisors turn down mediocre offers and hold out for the right deal, even if it takes longer.

Make sure the fee agreement addresses what happens if you find a buyer independently, how long the tail period extends after the engagement ends, and whether the fee is calculated on enterprise value or purchase price.

Understanding Exit Readiness: Three Critical Components

Before you even start interviewing exit strategy companies, you need to understand whether you're actually ready to sell. There are three types of readiness that all need to align: owner readiness, business readiness, and market readiness.

Owner Readiness

This is the most overlooked component. Are you mentally and emotionally ready to let go of what you built? Do you have a clear vision for what comes after the exit? Many entrepreneurs struggle with identity loss after selling because they didn't think through who they'd be without the business.

I've seen deals fall apart in the final weeks because the owner couldn't actually sign the papers. All the preparation, buyer meetings, and negotiations wasted because they weren't truly ready to walk away.

Financial readiness matters too. Do you know your walk-away number? Not just what you hope to get, but the minimum you'd actually accept? If you don't have that clarity before starting the process, you'll make emotional decisions during negotiations.

Business Readiness

This is what most people focus on when preparing to sell. Is your business actually attractive to buyers? Can it operate without you? Are the financials clean and growing?

A business-ready company has documented processes, a strong management team, predictable revenue, and clean books. It has systems that don't depend on the founder's personal relationships or knowledge. The more transferable the value, the higher the multiple you'll command.

If your business depends entirely on you showing up every day, you don't have a salable asset - you have a job. Fix that before engaging any exit strategy company, or prepare for disappointing valuations.

Market Readiness

Market conditions dramatically affect exit valuations. The same business might fetch a 4x multiple in a hot market and a 2x multiple during a downturn. Interest rates, industry trends, and buyer appetite all play into market readiness.

Right now, if you're in certain sectors like AI or climate tech, buyers are aggressive and valuations are strong. If you're in declining industries or highly commoditized services, even a perfect business will struggle to attract premium offers.

A good exit strategy company will tell you honestly if the market timing is wrong for your business. Great advisors sometimes recommend waiting 6-12 months for market conditions to improve rather than rushing into a weak market.

Red Flags to Avoid

Some exit strategy companies are flat-out bad actors. Here's what to watch for:

They guarantee a valuation upfront. No legitimate advisor can guarantee what your company will sell for before running a process. Market conditions, buyer appetite, and deal structure all affect final price. Anyone promising a specific multiple before they've even built a buyer list is either lying or inexperienced.

They push you to sell immediately. If you're not ready to sell, a good advisor will tell you what needs to improve before going to market. Advisors who pressure you to list immediately often just want to churn through deals and collect fees.

They have no verifiable track record. Ask for references. Check their claimed transactions on databases like Capital IQ or PitchBook. If they can't provide recent client references in your industry, walk away.

They want massive upfront retainers with weak deliverables. Some firms charge $100K+ retainers but provide little more than a standard CIM. Understand exactly what you're getting for any upfront payment.

They can't explain their buyer network. If an advisor talks vaguely about "reaching out to buyers" without specifics about who those buyers are, they're probably just planning to spam a purchased list. The best advisors can name specific firms they've closed deals with recently.

Alternatives to Hiring an Exit Strategy Company

Not every business owner needs an exit strategy company. Here are the alternatives:

DIY Exit

If you already have a buyer relationship or are fielding inbound interest, you might not need an advisor. I've done one completely DIY exit where the acquirer approached me directly with a fair offer, and bringing in an advisor would have just added friction.

But even in that scenario, I hired a good M&A attorney to review documents and negotiate terms. Never go completely alone through due diligence and legal documentation.

Business Listing Marketplaces

Platforms like Flippa, BizBuySell, and Acquire.com let you list your business directly and field buyer interest. This works well for smaller businesses under $1M in value where advisor fees would eat up too much of the proceeds.

The downside is you'll spend significant time screening unqualified buyers, managing tire-kickers, and negotiating without expert guidance. And you'll typically get lower valuations than a well-run auction process would deliver.

Attorney-Only Approach

Some business owners skip the M&A advisor entirely and just hire a great M&A attorney to handle negotiations and documentation. This can work if you're comfortable running your own buyer outreach, building financial projections, and managing the process yourself.

I'd only recommend this if you have prior M&A experience. Most first-time sellers don't know how to position their business, structure the process to create urgency, or negotiate effectively against experienced corporate development teams.

Preparing Before You Hire an Exit Strategy Company

The best time to engage an exit strategy company is when your business is already clean and growing. Here's what to fix first:

Clean financials. Get your books audit-ready. If you're running personal expenses through the business or don't have clean GAAP accounting, fix that first. Buyers will destroy your valuation over accounting uncertainty.

Recurring revenue. If you're in a services business, shift toward retainers and recurring contracts. One-off project revenue gets terrible multiples. I saw my valuations jump significantly once I converted agency clients to monthly retainers.

Documented processes. Buyers want to see that the business can run without you. Document your sales process, delivery workflows, and operational procedures. If everything is in your head, you'll get hammered on valuation.

Growth trajectory. You'll get the best valuation when growth is accelerating, not declining. If revenue is flat or down, spend 6-12 months fixing that before going to market. The difference in valuation between a flat business and one growing 30% annually is enormous.

Customer concentration. If more than 20% of your revenue comes from a single client, that's a valuation killer. Buyers see massive risk in customer concentration. Diversify your customer base before going to market, or expect buyers to heavily discount your multiple.

Build your prospect database. Part of what makes a business valuable is a healthy pipeline of potential customers. If you're in B2B, having a well-maintained database of qualified leads shows buyers that growth can continue post-acquisition. Tools like ScraperCity's B2B database can help you quickly build and maintain that pipeline before putting the business on the market.

If you're building a sales process to accelerate growth before exit, grab my 7-Figure Agency Blueprint for the exact client acquisition system I used across multiple exits.

How the Exit Process Actually Works

Once you engage an exit strategy company, here's the typical timeline:

Months 1-2: Preparation. The advisor conducts diligence on your business, builds financial models, creates a CIM, and develops the marketing strategy. You'll spend significant time in interviews and document gathering.

Month 2: Buyer Outreach. The advisor reaches out to their target list of buyers, typically 50-150 firms depending on your industry. They're gauging interest and sending teasers (one-page anonymous overviews) to qualified parties.

Months 3-4: First Round. Interested buyers sign NDAs and receive the full CIM. They submit initial indications of interest (IOIs) - non-binding offers with rough valuation ranges and deal structure.

Months 4-5: Management Meetings. You meet with the most attractive buyers (typically 5-10 firms) for management presentations. This is where you tell your story and build relationship.

Month 5-6: Letters of Intent. The best buyers submit LOIs - binding offers with specific terms. Your advisor negotiates these and helps you select the winning bid.

Months 6-9: Due Diligence and Closing. The buyer conducts extensive diligence while attorneys draft the purchase agreement. This phase is grueling - expect hundreds of due diligence requests and endless document production.

Total time from engagement to close typically runs 9-12 months. Anyone promising a 90-day exit is either selling tiny businesses or lying.

What Happens After You Sign with an Exit Strategy Company

Once you sign an engagement letter, expect your life to get significantly busier. The preparation phase is more intensive than most entrepreneurs anticipate.

You'll need to provide years of financial statements, customer contracts, employee agreements, and operational documentation. Your advisor will ask hundreds of questions about how the business actually works. This is where having documented processes pays off - if everything is tribal knowledge, you'll spend weeks just explaining your business.

The CIM creation process involves multiple rounds of review. Your advisor will draft the positioning, you'll provide feedback, they'll revise, and you'll iterate until it's perfect. This document is your business's resume, and it needs to be flawless.

During buyer outreach, you'll need to stay patient. It's normal for weeks to pass with little visible progress. Behind the scenes, your advisor is making calls, sending emails, and cultivating interest. But from your perspective, it can feel like nothing is happening. Trust the process.

Management meetings are your time to shine. This is where you sell the vision, demonstrate your expertise, and build trust with potential buyers. Practice your presentation multiple times. Know your numbers cold. Be ready to answer tough questions about weaknesses in the business.

The LOI negotiation phase is where a great advisor earns their fee. They'll push buyers on valuation, negotiate favorable terms, and create urgency by playing competing offers against each other. If you only have one buyer at this stage, your leverage evaporates.

Questions to Ask Before Signing an Engagement Letter

Before you commit to any exit strategy company, get clear answers to these questions:

• How many deals have you closed in my industry in the past 24 months?
• Can I speak with three recent clients whose businesses were similar to mine?
• Who specifically will work on my deal day-to-day?
• What's your average time from engagement to close?
• How many buyers will you contact in the first outreach?
• What valuation range do you estimate for my business, and what's that based on?
• What will disqualify a buyer in your initial screening?
• How do you create competitive tension if only one or two buyers show strong interest?
• What happens if we don't get an acceptable offer?
• Can you show me the last CIM you created for a similar business?
• What's your success rate - what percentage of engagements result in closed deals?
• How do you handle situations where due diligence uncovers issues?
• What post-closing support do you provide?

If an advisor gets defensive or vague about any of these questions, keep looking. The right partner will be transparent about their process, honest about challenges, and confident in their abilities.

Understanding Different Exit Paths

An exit strategy company can help you pursue several different exit paths depending on your goals and business situation.

Strategic sale to a competitor or adjacent company. This typically fetches the highest multiples because strategic buyers can realize synergies. They'll pay for your customer base, your team, your technology, or your market position. But expect heavy negotiation around earn-outs and employment agreements.

Financial sale to private equity. PE firms are looking for cash flow and growth potential. They'll often keep you on to run the business for 3-5 years, taking a majority stake now and offering a second bite at the apple later. This can result in higher total proceeds if the business continues growing.

Management buyout. Selling to your existing management team can be appealing if you want to preserve the culture and take care of your people. But management rarely has the cash to pay full market value upfront, so expect heavy seller financing and risk.

Employee Stock Ownership Plan (ESOP). ESOPs offer tax advantages and let you sell to employees over time. They work well for businesses with strong cash flow and owners who want to preserve jobs. But they're complex to set up and not suitable for high-growth businesses.

Recapitalization. This involves selling a majority stake to a financial buyer while keeping meaningful ownership. You get liquidity now while keeping upside for future growth. This is popular among entrepreneurs who aren't ready to fully exit but want to diversify their wealth.

A good exit strategy company will help you evaluate which path makes the most sense for your situation. The answer isn't always "highest bidder wins" - deal structure, cultural fit, and your post-exit plans all matter.

My Take After 5 Exits

I've sold businesses with investment banks, mid-market M&A advisors, and completely DIY. Here's what I learned:

For my first exit, I used a well-known M&A advisor who specialized in marketing agencies. They earned every penny of their fee - they positioned the company perfectly, created genuine competitive tension between four buyers, and negotiated a deal structure that was heavily cash-weighted versus earn-out. I would have left at least 30% on the table going alone.

For another exit, I hired an advisor who promised similar results but did almost nothing. They sent out a generic CIM to an outdated buyer list, got weak interest, and then pressured me to accept a mediocre offer. I fired them and handled the rest myself, ultimately getting a better deal through my own network.

The difference wasn't the firm's reputation or size. It was industry specialization, buyer relationships, and how hungry they were to deliver results.

If you're serious about exiting, talk to 5-7 exit strategy companies before choosing one. Ask hard questions. Check references. Trust your gut about who actually understands your business and cares about maximizing your outcome.

And if you're still building value before exit, focus obsessively on recurring revenue, documented systems, and reducing owner dependence. Those three factors influence valuation more than anything else.

For the sales systems side of this equation, my Discovery Call Framework will help you close bigger retainer deals that make your business more valuable to acquirers. And if you want hands-on help preparing your business for exit, we cover exactly that inside Galadon Gold.