The Exit-Ready Org
What private equity sponsors are actually looking for, and how to avoid killing deal momentum before it starts.
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When contract data is unstructured, everything downstream suffers.
Manual billing and invoices, messy spreadsheets, and hours of reconciliation that never quite tie out.
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Your ARR deserves better.
“As a PE-backed company, you’re essentially always for sale.”
– Steven Grist, 7x PE-backed CFO
There’s a common misconception in the portfolio company world: that if things feel stable, you’re in good shape.
Revenue’s growing (mostly). Headcount is manageable. No major fires in the past quarter. That should be enough... right?
Not really.
Private equity sponsors aren’t looking for companies that simply keep the lights on. They’re looking for signals that you can exit well. That means clean financials, tight operations, repeatable processes, and a leadership team that can run the business without training wheels.
Operating with an eventual transition in mind.
Steve Isom, CFO at Bloomerang (ex-VP Finance at Flywheel, acquired by WP Engine), learned this firsthand when he closed a deal in 31 days flat—without even running a process. No banker. No term sheet. Just a direct, unsolicited offer from a competitor. What followed was a scramble that didn’t feel like one… because they’d already done the work.
“We were not for sale, we weren’t in market. But because we were ready, we could move fast… and we did.”
– Steve Isom, CFO at Bloomerang (ex-VP Finance at Flywheel, acquired by WP Engine)
The only way they pulled it off? Everything—from dashboards to vendor agreements—was ready to go.
“If someone asks you a basic question and you have to go spin up an analysis, pull the data, and figure out what the question even means... you’re already behind.”
– Steve Isom
Exit readiness isn’t something you prep for. It’s something you maintain. It’s just a way of kinda existing. Because timing isn’t up to you (especially when the offer’s too rich to ignore).
Sweep the Sheds, Clean the Books
Clean books aren’t a bonus; they’re the price of admission.
One of the first things any buyer will test is how fast and how accurately you can answer basic financial questions. And if your team needs two weeks, three reconciliations, and an explainer doc to get there... no bueno.
Some of the biggest red flags in diligence aren’t performance-related—they’re presentation-related:
Deferred revenue that’s sloppily tracked
Cohort data that stops at total ARR
Customer counts that only “tie out” if the right analyst is in the room
ARR waterfalls that shift from one period to the next depending on who’s building the deck
“The biggest finance misses don’t happen because people are dumb—they happen because they’re busy and no one’s owning the full picture.”
– David Lapter, CFO at Dashlane (6x CFO)
Clean books don’t win the deal, but the fastest way to lose deal momentum is by fumbling the basics. Not the numbers themselves, but the way they’re gathered and delivered.
Culture of Execution (Not Heroics)
If it still takes two days to pull a bookings report, you don’t have an execution culture—you have a duct tape culture.
Contrary to popular belief, buyers aren’t impressed by heroics. They’re not impressed by your “hustle” or “burning the midnight oil.”
In fact, those are turn offs when it comes to diligence.
They’re looking for a team that gets the right things done, on time, without drama. That shows up in small ways:
Your weekly KPI report is 90% the same format each time—because you’ve agreed on what matters
Your forecast actually updates when reality changes, not three weeks later
Sales managers don’t need an analyst in the room to explain how their team is pacing
Execution means minimal surprises. It means finance and GTM have a shared rhythm. It means RevOps isn’t still arguing with sales leadership about what counts as pipeline.
If a buyer asks for CAC payback by segment and the answer is “let me get back to you next week,” they’re already adjusting their expectations.
That’s called a credibility discount.
You don’t need perfect systems. But you do need muscle memory. Repeatability builds trust and reduces cognitive load.
Org Design for Optionality
Key-person risk doesn’t show up on a P&L, but it shows up fast in diligence.
If your CFO can’t take a vacation without breaking the model, or if your VP of Sales is the only one who knows how to pull a churn report, you’re not ready for a buyer—you’re hostage to your own org chart.
Optionality means designing your team so the business keeps running even if someone leaves, gets promoted, or checks out. That starts with three things:
Clear ownership: Every KPI should have a name next to it. Not a department. A name. If no one owns gross margin by segment, then no one’s improving it. And if there’s no name, how do you re-assign that KPI if necessary?
Documentation > memory: You shouldn’t have to Slack someone to understand how revenue is recognized. If your workflows and logic only live in people’s heads, you’re building on sand. Documentation falls on the Eisenhower Matrix as something that’s “important, but not urgent”, which is why it never gets done until it tragically becomes both.
Successor thinking: If someone in your org can’t be promoted because they’re too critical where they are, that’s not a compliment—it’s a design flaw.
“Buyers don’t just diligence the business—they diligence the team. If it looks like the CEO is the only one who can run it, you’re not getting the premium multiple.”
-Steve Isom
And by the way—it’s not great for employees either. They can get stuck behind the org chart just as easily.
“If I promote you and the team collapses under you, I can't move you up.”
-Tony Boor, CFO of Blackbaud
🚨 Common Anti-Readiness Signals
You don’t need to be perfect to sell, but you do need to avoid the obvious red flags. Here’s a short list of signs that your company isn’t as ready as you think:
Manual billing: Still sending invoices from someone’s Outlook draft folder? That’s not quirky—it’s a liability.
Over-customized SaaS: If your Salesforce instance needs a user manual and a Sherpa, no one’s touching it.
Spreadsheet FP&A: There’s nothing wrong with Excel (in fact, it’s the greatest software ever built). There’s a lot wrong with being the only person who knows how the Excel model works.
Inconsistent math: If your board deck says one thing, your sales comp model says another, and your CEO has a third number in their head, you’ve got a credibility problem.
These aren’t “nice to fix later” issues. They’re the kind of things that slow down diligence, erode confidence, and tank the valuation curve before the first IOI.
Final Thought: Great Companies Aren’t Sold
Steve Isom didn’t wake up planning to sell Flywheel. But when a buyer came knocking, the company was ready—and that’s the point.
Great companies are bought, not sold.
The best operators don’t wait for a banker to tell them what to fix. They run the business like someone could walk in and make an offer tomorrow.
Because one day, hopefully someone will.
Sweep the sheds today to secure the bag tomorrow.
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