5 Numbers Buyers Are Looking At

Welcome back to another edition of The Wise Exit newsletter. This week, we’re covering: 

• Why the metrics you track today directly shape the offer you get tomorrow

• The key valuation indicators every founder should understand before going to market

• 3 things you can do this week to start tracking what buyers actually care about

Let’s get to it.

💡 This Week’s Big Idea

5 Numbers Buyers Are Looking At (And Why You Should Be Too)

Founders often know they have a valuable business. They just don’t know how to prove it to a buyer.

And look, I get it. You know the revenue, your growth rates, what it took to get here. But when a serious buyer sits down across from you, they won’t just take your word for it. They'll be looking at very specific numbers. And if you don't know which ones (or worse, if those numbers aren't in good shape), you're already negotiating from a weaker position than you need to be.

Because your valuation isn't just a number someone assigns to your business at the finish line. It's built over time, through the metrics you track, the financials you maintain, and the story those numbers tell to a buyer who's never met you before.

Here are five numbers buyers will want to talk about at the negotiating table, and why they matter:

1. EBITDA

This is Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s one of the clearest windows into how profitable your core business actually is, stripped of all the noise. High EBITDA tells a buyer your business generates real earnings from its operations, and it’s also one of the most direct levers on your valuation multiple. In most cases, it's the number a buyer will anchor the entire conversation around.

2. Revenue

Revenue isn’t just your top line. It’s the relationship between what's coming in and what you're spending to generate it. A business doing strong revenue with healthy margins tells a very different story than one burning through cash to hit the same number. Yes, buyers want to see growth. But more importantly, they want to see profitable growth. So, if your revenue is climbing but your margins are shrinking, that's a conversation you need to get ahead of before a buyer brings it up.

3. Discounted Cash Flow (DCF)

This is how a buyer answers the question of what your business is actually worth based on what it's likely to earn in the future. They'll take your projected cash flow and discount it back to what it’s worth today, accounting for risk. If you can tell a clear and compelling story about future growth and back it up with clean financials, that number goes up. On the opposite end, if your books are messy and the trajectory isn't obvious, it goes down. DCF rewards preparation more than anything.

4. Enterprise Value (EV)

Enterprise value is what a buyer would actually pay for your business when you account for both debt and cash. It's not just your market value. It's the full picture of your capital structure. Understanding your EV matters so much because it's what sophisticated buyers use to compare acquisition targets. So, if you have significant debt on the books, it directly reduces what ends up in your pocket at close.

5. Seller's Discretionary Earnings (SDE)

This one is especially relevant for founder-led businesses. SDE takes your net profit and adds back your salary, personal expenses run through the business, and other one-time or non-essential costs. It gives buyers a clearer picture of the true earning power of the business under new ownership. If you've been running personal expenses through the company (and a lot of founders have), this is the metric that either helps you or comes back to bite you during diligence.

You don't have to become a finance expert to get on top of these metrics. That's what the right M&A team is for. But you do need to understand enough to know what's being evaluated, why it matters, and where your business stands today.

Because the founders who achieve the best exit outcomes aren't just the ones with the best businesses. They're the ones who understood their numbers enough to actually do something about them.

Reply to this email or reach out to us here if you want to understand what your numbers are telling buyers right now. We're always happy to walk you through it.

❓ 5 Key Questions to Ask Yourself This Week

1️⃣ Do I know what my EBITDA is right now, and do I know what multiple a buyer in my industry would apply to it?

2️⃣ Is my revenue growth telling a story a buyer would find compelling, or does it raise more questions than it answers?

3️⃣ Do I have a clean picture of my enterprise value, including how debt and cash factor into what a buyer would actually pay?

4️⃣ If a buyer asked for three years of clean financials tomorrow, could I produce them quickly and confidently?

5️⃣ Am I tracking the metrics that matter to buyers, or just the ones that feel good internally?

📋 3 Action Items for This Week

☑️ Pull your EBITDA for the last three years: If you don't know this number off the top of your head, that's the first thing to fix. Understand what it is, what's driving it, and what a realistic multiple looks like in your industry.

☑️ Look at the relationship between your revenue and your margins: Top-line revenue alone doesn't tell the full story. So, get clear on what's actually left after operating expenses. That's what buyers are going to focus on.

☑️ Have an honest conversation with your accountant or M&A advisor: Not about taxes. About how your financials look through a buyer's eyes. Because there's a big difference between books that are filed correctly and books that are ready for diligence.

That's all for this week.

Remember, the founders who walk into a sale process knowing their numbers don't just feel more confident. They negotiate better, attract better buyers, and exit on better terms. Start building that picture now before it’s too late.

Reach out to us whenever you’re ready to talk through your numbers.

Talk next week,

Brian Dukes
Managing Partner at Exitwise