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

• Understanding the value creation zone in your M&A deal

• 5 questions to help you identify your most strategic buyers

• 3 actionable steps to start building leverage before you go to market

Let’s dive in.

One Big Idea

How to Understand the Value Creation Zone in Your Deal

Most founders and business owners think of valuation as a simple number:

Revenue × Multiple = What My Business Is Worth.

But the truth is, that’s only one part of the equation. Because when a buyer evaluates your business, they’re not just looking at your past revenue. They’re also mapping out what it could look like in the future.

• What efficiencies can they gain from scale?

• What growth can they unlock post-acquisition?

• What synergies can they realize by plugging your business into theirs?

This is what we call the Value Creation Zone, and it’s where most of the real money lives in an M&A deal.

The challenge is that buyers don’t want to share that upside. They’ll tell you things like, “This is value we will create. We’re taking all the risk. We should pay market value and nothing more.”

But your job as a seller is to extract as much of that value as you can before the deal closes.

And the best way to do that is to make buyers compete with one another.

You see, when buyers are in a competitive process, they’re forced to put their best foot forward because they know someone else might see the same upside in your business.

That’s when the numbers go up, and you get a piece of the value creation you helped enable. 

So if you’re preparing for an exit, don’t just focus on what your business has done in the past. Make it easy for buyers to see the potential of what it could do in the future. 

If you have any questions or need any help with this, just reply to this email or contact us here to learn more.

5 Key Questions to Ask Yourself Today 

1️⃣ Do you know which types of buyers are most likely to see strategic upside in acquiring your business?

The better your understanding of their goals, the more leverage you’ll have.

2️⃣ Have you identified buyers who might be willing to pay above market value based on your growth potential, not just past performance?

If not, you’re leaving the Value Creation Zone entirely in their hands.

3️⃣ Are you running a process that brings multiple interested parties to the table, or are you reacting to the first offer that shows up?

One buyer = No leverage. Multiple buyers = Power. 

4️⃣ Can you clearly articulate how your business creates strategic value for potential buyers?

The easier you make that connection, the faster they’ll start seeing upside.

5️⃣ Have you considered how to create psychological urgency among buyers?

A competitive process isn’t just about price. It also accelerates decisions and improves terms.

3 Action Items For This Week

☑️ Map your buyer universe: List the 5–10 companies (strategics, PE firms, etc.) who stand to gain the most from acquiring you. Research their recent acquisitions and public statements. 

☑️ Outline your "future upside" story: Build a short deck that showcases not just your current metrics, but how a buyer could 2x their return by acquiring you. Include synergies, cross-sell opportunities, or cost reductions.

☑️ Talk to an advisor about competitive processes: Even if you're not selling yet, understand what a competitive process looks like and what groundwork you should be laying now.

That’s all for this week.

Remember that buyers don’t just pay for what you’ve done. They pay for what they believe they can do with what you’ve built.

Until next time,

Brian Dukes
Managing Partner at Exitwise