Executive office

How to Sell Your Business:
The Complete Founder's Guide

Selling a business isn't a linear checklist, it's a series of connected decisions. Each choice compounds, each misstep costs. These are the 15 questions that define your exit

15 Question Framework
6-12 Month Process
$10M - $500M+ Exits

Introducing The Funnel

Most founders start with the question "what's my business worth?" But that's actually the third or fourth question you should ask. The Funnel is a framework that helps you think through selling your business in the right sequence—from initial curiosity to final close.

Watch Kirk Michie, Founder of Candor Advisors, introduce the framework that helps founders navigate the complexity of selling their life's work.

The Three Phases of Selling

Think of selling your business as moving through three distinct phases—each with its own questions, decisions, and risks. Knowing where you are in the funnel helps you make smarter, more confident choices.

Founder contemplating strategy
1

Curiosity & Discovery

Understanding Value & Timing

The questions founders ask first

5 Steps
Advisory collaboration
2

Planning & Strategy

Building Your Deal Team

Where curiosity becomes action

5 Steps
Deal closing handshake
3

Decision & Execution

Navigating Offers & Closing

The final sprint to close

5 Steps
1

Phase 1

Discovery & Curiosity

The 15 Questions That Define Your Exit

Each question builds on the last. Skip one, and you'll feel it later—in diluted value, missed leverage, or regret. Take them in order. Think deeply. Decide deliberately.

Phase 1

Discovery & Curiosity

Understanding Value & Timing

Before valuation, you need to understand how buyers think about multiples—and what really drives them. Before going to market, you need to know whether conditions favor sellers or buyers. And before committing to a process, you need an honest answer to a harder question: is your business truly ready, or could six months of margin improvement and risk reduction materially change the outcome? The discovery phase isn’t about collecting data. It’s about building the mental models that separate reactive exits from strategic ones. These five questions form the foundation every smart exit decision is built on.

1

What's Your Business Worth?

"Can I get enough money net of taxes to cover my life?"

Deep Dive
Key Insights
  • Businesses sell as a multiple of revenue or EBITDA, not DCF
  • Software companies: 2-7x ARR depending on growth
  • Service businesses: 5-8x EBITDA for $2-5M range
  • Above $10M EBITDA: approaching public market multiples
Founder Perspective

"Your business is worth what the market will pay—not some theoretical calculation. Start with the transferable economics: recurring revenue or sustainable EBITDA. Everything else follows from there."

⚠️ Caution

Don't confuse what you want your business to be worth with what buyers will actually pay. Market multiples are determined by precedent transactions, not aspirations.

2

What Multiple Will Your Business Sell For?

"How do I decode the valuation range for businesses like mine?"

Deep Dive
Key Insights
  • Below $1M EBITDA: typically 5x or less
  • $2-5M EBITDA: 5-8x depending on growth and moats
  • Above $5M: creeping toward double-digit multiples
  • High growth + IP protection = premium multiples
Founder Perspective

"LLMs and databases give you ranges. Market professionals give you reality. Talk to investment bankers who actually close deals—they see live data, not historical averages."

⚠️ Caution

Multiples aren't static. Market appetite changes. What sold for 8x last year might fetch 6x today depending on interest rates, sector trends, and buyer confidence.

3

When to Sell Your Company (2025)?

"Should I wait for next year or go now while things are strong?"

Deep Dive
Key Insights
  • Best time: revenues and profits setting records, upward trend
  • Full pipeline, strong management team, key employees secure
  • Early in contract life if you have long-term contracts
  • High PE interest in your sector creates competitive tension
Founder Perspective

"Selling when you're tired or frustrated is reactive. Selling when your business is crushing it is strategic. The best exits happen from a position of strength, not exhaustion."

⚠️ Caution

Don't sell during a down year just because you're burned out. Buyers smell desperation. Wait for the uptick—even if it takes quarters—to avoid leaving millions on the table.

4

How to Make Your Business More Valuable

"What low-hanging fruit can boost my valuation before going to market?"

Deep Dive
Key Insights
  • Professionalize financials: move to accrual accounting
  • Calculate adjusted EBITDA with proper add-backs
  • Get quality of earnings review before buyers do
  • Reduce customer concentration and key person risk
Founder Perspective

"Buyers don't care about your vision until they trust your numbers. Professionalized financials aren't optional—they're table stakes. Clean books signal a clean business."

⚠️ Caution

Most founders underestimate how messy their financials look to outsiders. What makes sense to you internally won't pass muster in due diligence without proper preparation.

5

How to Decide If You Should Sell Now

"Is this the right market window, or should I wait?"

Deep Dive
Key Insights
  • Go if: strong year, full pipeline, stable team, favorable markets
  • Wait if: coming off down year, external uncertainty (tariffs)
  • Hot sectors (2025): professional services, healthcare IT, SaaS, property mgmt
  • Demographic trend: PE capital will be abundant for a decade+
Founder Perspective

"There's no single 'right time' for everyone, but there are wrong times. If sentiment is against you, recent results are weak, or your sector is out of favor—patience pays."

⚠️ Caution

An inbound offer feels flattering, but it's often just a free option for the buyer. Pre-emptive bids are rarely the highest you'll get. Run a process.

Phase 2

Strategy & Planning

Building Your Deal Team

Once you've confirmed your business has material value and the market timing is favorable, you enter the strategy phase—where abstract thinking becomes operational planning. This is where founders decide whether to hire an investment banker or attempt a sale themselves, how to construct a realistic timeline, and which buyers to approach first. The strategy phase is about building your team and defining your process before you go to market. Most founders underestimate how much a structured approach compounds value: a well-run auction with competitive tension routinely produces offers 15-30% higher than a founder negotiating solo with an inbound buyer. The questions in this phase determine whether you'll enter the market prepared or exposed, supported or isolated.

6

How Long Does Selling Take?

"What's the realistic timeline from decision to close?"

Deep Dive
Key Insights
  • Preparation phase: 2-4 months (financials, materials, NDA)
  • Marketing to LOI: 2-4 months (buyer outreach, IOIs)
  • LOI to close: 3-6 months (due diligence, legal)
  • Total: 6-12 months from start to finish
Founder Perspective

"Selling a business is a marathon, not a sprint. Founders who rush the process leave money on the table. Those who plan properly maximize outcomes."

⚠️ Caution

Every delay compounds. A missing financial statement can push closing by weeks. Key employee departure can crater a deal. Preparation prevents chaos.

7

Should You Hire an Investment Banker?

"Is the fee worth it, or can I do this myself?"

Deep Dive
Key Insights
  • Bankers create competitive tension → higher prices
  • Below $5M: business broker might suffice
  • Above $10M: banker almost always adds >10% to price
  • DIY risk: leaving 15-30% on the table by accepting first offer
Founder Perspective

"A good investment banker pays for themselves many times over. They know which buyers are serious, what terms are market, and how to orchestrate tension that drives price."

⚠️ Caution

Going solo sounds appealing until you're negotiating with a PE firm that's done 200 deals while you've done zero. Information asymmetry kills founder value.

8

What's the Process to Sell Your Business?

"What are the actual steps from prep to closing?"

Deep Dive
Key Insights
  • 1. Prepare materials (CIM, financials, data room)
  • 2. Execute NDAs and identify buyer universe
  • 3. Outreach and IOI collection
  • 4. Management presentations and site visits
  • 5. LOI negotiation and due diligence
  • 6. Purchase agreement and closing
Founder Perspective

"The process feels invasive because it is. Buyers will question everything. Having a clear roadmap and experienced advisors helps you stay focused on running the business during the chaos."

⚠️ Caution

Due diligence will feel accusatory and never-ending. Prepare mentally. Every document request is a test. Every delay raises red flags.

9

Where Do You Find Your Buyer?

"Who's actually buying businesses like mine?"

Deep Dive
Key Insights
  • Strategic buyers: competitors, adjacent markets, roll-ups
  • Financial buyers: PE firms doing platform or add-on deals
  • Independent sponsors: need to raise capital (higher risk)
  • Databases: PitchBook, Axial, CapIQ, LinkedIn with Rocket Reach
Founder Perspective

"Your ideal buyer isn't always who you think. Sometimes a strategic pays less than PE. Sometimes a smaller firm is more motivated than a giant. Cast a wide net."

⚠️ Caution

Not all buyers are created equal. Some kick tires endlessly. Some can't secure financing. Some use LOIs to gather competitive intelligence. Vet hard.

10

What Percentage Do Transaction Advisors Charge?

"What will this process actually cost me?"

Deep Dive
Key Insights
  • Up to $15M: 4-5% success fee
  • $20-50M: 2.5-4%
  • $50-100M: 1.5-2.5%
  • Above $100M: 1-1.5%
  • Plus retainer: $5K-50K/month or upfront $10K-100K
Founder Perspective

"A $500K fee sounds huge until you realize a good banker got you $3M more than you would've gotten on your own. Focus on net proceeds, not gross fees."

⚠️ Caution

Success-only fees sound appealing but can misalign incentives. Monthly retainers ensure your banker can walk away from bad deals without waiting for a payday.

Phase 3

Execution & Decision

Navigating Offers & Closing

The execution phase is where preparation meets reality. You've identified buyers, run a process, and now you're staring at Letters of Intent (LOI) that vary wildly in structure, terms, and actual value. An LOI that promises $20M with a $5M earnout is fundamentally different from $18M all cash—but founders often fixate on headline numbers instead of certainty of payment. This phase tests your ability to decode deal structures, resist buyer pressure tactics, and protect what matters beyond price: your tax liability, your team's future, and your post-close obligations. The questions here force clarity on tradeoffs most founders don't see coming until they're already locked into exclusivity with a buyer who's starting to re-trade terms.

11

What's an LOI?

"Is this binding? What am I actually agreeing to?"

Deep Dive
Key Insights
  • LOI = Letter of Intent, mostly non-binding
  • Binding clauses: confidentiality and exclusivity
  • Specifies: price range, structure, exclusivity period (90-120 days)
  • You can walk away, but can't talk to other buyers during exclusivity
Founder Perspective

"An LOI is a handshake, not a contract. It locks you out from other conversations but doesn't lock them into buying. Never sign one without legal counsel reviewing the terms."

⚠️ Caution

Exclusivity is a gift to the buyer. Use it carefully. If they slow-walk due diligence or re-trade on price, you're stuck unless you can convince them to release you.

12

What's an Earn-Out and Should You Agree?

"Is future performance-based pay worth the risk?"

Deep Dive
Key Insights
  • Earnout = payment contingent on future performance
  • Problem: buyer controls expenses, you don't control profitability
  • If they invest in growth, your EBITDA drops, earnout fails
  • Default answer: No, unless you retain operational control
Founder Perspective

"A $20M offer with $5M earnout is really a $15M offer—maybe $12M if you're being honest. Earnouts sound like shared upside but function as risk transfer from buyer to you."

⚠️ Caution

Buyers don't structure earnouts to help you. They structure them to reduce their risk and cap your upside. Assume you'll never see the earnout money.

13

How Do You Compare Offers?

"What's the real value when structures vary wildly?"

Deep Dive
Key Insights
  • Build a matrix: cash at close, seller notes, retained equity, earnouts
  • Rank by certainty: cash > unsubordinated note > subordinated note > equity > earnout
  • Higher headline number means nothing if payment is contingent
  • Consider buyer quality and probability to close
Founder Perspective

"The best offer isn't the biggest number—it's the most certain money. A $19M all-cash deal beats a $22M deal with $6M in earnouts every single time."

⚠️ Caution

Founders fall in love with headline numbers. Don't. Your CPA will remind you what your net proceeds actually are after structure and taxes.

14

How Much Will You Pay in Taxes?

"What's my actual take-home after Uncle Sam takes his cut?"

Deep Dive
Key Insights
  • Capital gains: federal 20%, plus state (0-13.3%)
  • Asset vs stock sale matters for state taxes
  • Buyers may "gross up" if they get tax write-offs
  • Avoid structures that trigger ordinary income (37%+)
Founder Perspective

"Tax planning isn't an afterthought—it's the difference between retiring comfortably and needing to work another decade. Engage tax advisors at LOI stage, not closing."

⚠️ Caution

Retained equity that looks like continued employment gets taxed as ordinary income. You'll pay taxes on equity that might become worthless. Structure carefully.

15

What Happens to Your People?

"How do I protect my team through this transition?"

Deep Dive
Key Insights
  • Strategic buyers may consolidate redundant roles
  • PE buyers usually keep teams intact (no operational expertise)
  • Don't promise job security you can't guarantee (legal risk)
  • Consider transaction bonuses for critical employees
Founder Perspective

"Your legacy isn't the exit price—it's how your people remember the transition. Communicate directly, be honest about uncertainty, and take care of those who took care of you."

⚠️ Caution

Telling employees too early creates flight risk. Telling them too late creates resentment. Thread the needle: inform before close, but after LOI is signed.

Why Process Drives Value

An inbound offer is nothing more than a free option for the bidder

A pre-emptive bid is almost never the highest offer

The process can drive a material increase in purchase price

In a competitive auction, the winning bid is often 20% higher than the runner-up bid

The process is about much more than the highest offer

Advisory conference room

About Candor Advisors

Candor Advisors is a boutique M&A advisory firm that specializes in helping founders navigate the most important financial decision of their lives—selling the business they built.

Unlike large investment banks that treat founders as transaction numbers, we provide personalized guidance grounded in decades of deal experience. We believe founders deserve advisors who speak plainly, act transparently, and prioritize outcomes over optics.

Our approach is simple: understand your goals, build competitive tension among serious buyers, and maximize both price and terms while protecting what matters most to you—whether that's your team, your legacy, or your financial future.

$2B+
Transaction Value
50+
Deals Closed
20+
Years Experience

Meet Kirk Michie

Founder and Managing Director of Candor Advisors, Kirk has spent two decades advising founders through complex M&A transactions. His philosophy: selling your business should feel less like a transaction and more like a strategic partnership.

Kirk believes the best exits happen when founders understand the process deeply, ask the right questions early, and have an advisor who prioritizes their long-term success over short-term fees.