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Why Ownership Structure Decides Who Wins (and Loses) in an Exit
The Wise Exit Newsletter
Aiza Torres
June 26, 2025
In this week's issue:
Why ownership structure determines who gets paid (and who doesn’t)
A breakdown of whether bootstrapping is right for your business
What Capital One’s $35B acquisition means for founders like you
And a surprising M&A lesson from cash, debt, and working capital
Let’s dive in.
🧠 This Week’s Big Idea
Why Ownership Structure Decides Who Wins (and Loses) in an Exit
When most founders think about selling their business, they picture the headline number.
But the reality is, the number on the press release isn’t the number that hits your bank account.
The biggest factor? Ownership structure.
I’ve seen deals where a founder sells their company for $50 million and walks away with less than $5 million… all because of how the cap table was set up.
Here’s what matters:
Preferred vs. Common Stock: Most venture investors hold preferred shares, which means they get paid first, and sometimes exclusively.
Liquidation Preferences: These give investors the right to take their money (or a multiple of it) off the top, before common shareholders see anything.
Option Pools and Convertible Notes: These can dilute your ownership fast, especially if you’ve raised money in chunks over time.
Even if your business is healthy, you can get crushed in the payout waterfall if you haven’t planned for it.
Which is why bootstrapped founders who retain equity often exit with much more control and upside.
So before you chase a big exit, take a hard look at how your ownership is structured. Because when the deal closes, it's the structure that determines who gets paid and for how much.
Curious What Buyers Would Actually Pay for Your Business?
Most founders undervalue what they’ve built or don’t realize which parts of the business turn buyers off.
But with a Certified Pro Valuation, we’ll help you:
Understand what your business is really worth in today’s market
Spot weak points before buyers do
Get a short list of serious buyers who are actively looking in your space
“Exitwise helped us turn an average offer into something life-changing.”
— Shawn McKenna, Founder, DataFuzion
Special offer for readers: Get 10% off your valuation today. Just use the code VALUE10 when booking your call below.
📰 Featured Blog Post
What Is Bootstrapping In Entrepreneurship?
Not every founder needs venture capital. And for some, it can actually hurt the outcome.
This article breaks down what it actually means to bootstrap a company, and whether it’s the right move for your startup.
📰 In The News
Capital One–Discover Merger Continues to Make Headlines
Capital One’s landmark $35.3B acquisition of Discover is officially closed, but the integration is still unfolding.
This week, coverage focused on a $425 million class-action settlement, board restructuring, and continued regulatory scrutiny as Capital One becomes the largest credit card issuer in the U.S.
Why it matters to you:
This deal shows just how much structure impacts outcomes. Legal prep, balance sheet clarity, and stakeholder alignment are now front-page news, not back-office cleanup.
If your company is even thinking about a future exit, this is your reminder to get your house in order early.
Need help? Get in touch with Exitwise.
🗣️ From Brian
A lot of founders think company debt will tank their valuation.
But the truth is, it doesn't. Because deals are done on a cash-free, debt-free basis.
What matters is how well you understand what buyers expect, such as leaving enough working capital in the business to keep it running smoothly.
Draining the tank before closing? That’s the quickest way to kill a deal.
How did you like this week's newsletter? |
That's all for this week. Until next time.
Best,
Brian