Avoiding Founder Regret: Key Ways to Shape a Sale-Ready Business

Embracing 11 fundamental steps before attempting a sale can help founders avoid major pitfalls. From building a strong competitive moat to managing a trustworthy leadership bench, each principle lays the groundwork for a smoother, more fulfilling exit.

Planning a business exit sparks plenty of questions for founders. In this overview from our keynote with Fairmount Partners, we discuss how clear positioning, accurate finances, and a strong team reduce regrets and enhance your odds of success.

Selling a company can be the highlight of your entrepreneurial journey—or it can lead to regret if you skip crucial steps. In a recent keynote titled “What Every Founder Needs to Know Before Exiting,” I teamed up with Allen Born of Fairmount Partners to explore lessons many founders wish they’d known earlier. Drawing on our experiences in HR/work technology advisory and investment banking, we outlined ways to position your business so potential buyers see genuine value from day one.

Below, you’ll find an overview of the key points we covered. You’ll also see quotes from our discussion that highlight real scenarios, personal lessons, and strategic steps you can take right now. Whether you’re a first-time founder or a seasoned entrepreneur, these insights can help align your company for a smoother exit.

1. Articulate Your Unique Value

One of the first questions buyers or investors ask is: “What makes you different?” If you can’t explain that quickly and clearly, potential partners will struggle to see the true value you bring to the market. In the keynote, both Allen Born and I emphasized the importance of defining a compelling identity from the start—before you even think about selling or raising capital.

“When you’re competing against a strong solution... we’re not doing anybody any good by just taking what they tell us and not pressure testing it.” – Allen Born

I’ve also watched founders wrestle with this in real time. As I shared:

“We’ve been in the industry for a long time and made plenty of mistakes. Our goal is to help others avoid the same missteps.” – Marilyn Pearson Hendricks (MPH)

Why This Matters

• Clear Differentiation: If you can’t define how your offering stands apart, it’s hard for anyone else to understand why they should bet on you.
• Customer Connection: In my experience, the fastest way to prove uniqueness is to zero in on specific customer needs rather than trying to please everyone.
• Investor Confidence: Buyers back businesses that know exactly what they’re best at—so be ready to show them where you excel.

2. Build a Moat

Standing out isn’t enough unless you protect your lead. A “moat” means staying several steps ahead through continued innovation, strategic relationships, or exclusive technology—whatever keeps competitors at a distance.

“You need to always think about developing a well-articulated roadmap... so that buyers see your business as protected from competition today and in the future.” – Allen Born

I often advise founders to continually reinvest in meaningful improvements. A hidden threat is that you can lose your lead by becoming complacent. A few tweaks each quarter, whether it’s an enhanced feature or a re-energized partnership, can make a big difference in maintaining momentum.

Why This Matters

• Future-Proofing: Ongoing improvements show that you’re not just fixed on current success but prepared for shifts in demand.
• Competitive Edge: Partnerships, patents, or proprietary tech can give you a meaningful advantage.
• Stronger Valuation: Buyers are often willing to pay more if they see you have a sustainable, hard-to-replicate position.

3. Know Your Competitive Position

You can’t operate in a vacuum. You risk missing clear opportunities if you don’t know who your competitors are or what they offer. Analyzing your strengths and weaknesses against others helps you sharpen your messaging, refine your product, and uncover untapped markets.

“When you think about just talent acquisition or HR Tech, people put themselves into buckets. It’s good to explain quickly: ‘Here’s what we do, here’s the area we play in.’” – Allen Born

“The language you use to tell your story matters. Founders can struggle with placing themselves in the right context.” – Marilyn Pearson Hendricks (MPH)

Why This Matters

• Precise Messaging: By knowing what others offer, you can highlight exactly why you’re better, faster, or more cost-effective.
• Market Awareness: Staying on top of trends helps you anticipate changes and adapt quickly.
• Informed Pitches: When you know your closest competitors, you can address potential buyer concerns head-on.

4. Understand Your Market Opportunity

It is tempting to have a massive “total addressable market” (TAM), but an inflated number without a strong rationale damages credibility. Investors look for well-researched, reality-based market estimates that show clear paths to growth.

“We look at top-down and bottom-up. If the TAM is only 50 million, you can’t realistically be a 200-million company.” – Allen Born

Why This Matters

• Credible Growth Story: Accurate numbers prove you know your audience and how you’ll expand over time.
• Strategic Targeting: Understanding where the best segments are helps you prioritize resources.
• Investor Appeal: Showing a viable market with room to scale often sparks more interest than broad, vague claims.

5. Prepare for Thorough Diligence

Potential buyers will examine everything—from how you record revenue to how you manage daily operations. Weak processes, blurry financials, or misaligned expense categories quickly raise red flags, slowing or derailing a deal.

“Buyers are going to look at your financial statements in detail. If you stumble over your numbers, you exude a lack of confidence.” – Allen Born

“In my first personal round of due diligence, we were running on cash-based QuickBooks. It took about a year to clean that up.” – Marilyn Pearson Hendricks (MPH)

Why This Matters

• Reduced Deal Risk: Well-organized statements and transparent data minimize buyer skepticism.
• Faster Negotiations: Having answers ready leads to quicker, more productive discussions.
• Professional Image: Showing mature processes makes you look more established and reliable.

6. Project Your Numbers Wisely

Forecasting accurately signals control and awareness of your market. Investors can tell when estimates are based on real metrics or wishful thinking. Align your forecast with historical performance, funnel data, and customer behavior.

“When we go to market, we need 100% confidence in the current year’s forecast. Nothing kills a deal faster than missing numbers.” – Allen Born

Why This Matters

• Investor Trust: Rational forecasts clearly understand revenue drivers and costs.
• Operational Planning: Well-built models guide when to hire, how much to spend on marketing, or when to release new features.
• Adaptive Strategy: Regularly review your forecast against actual results to make timely pivots.

7. Manage Your Funnel

A strong funnel reflects healthy demand. Buyers want to see that leads flow reliably through each stage, indicating a scalable and repeatable sales process.

“Track your funnel at a point in time, and compare that to your coverage model. If the funnel is strong, it signals real growth potential.” – Allen Born

Why This Matters

• Predictable Revenue: A disciplined funnel reveals patterns in win rates and deal velocity.
• Targeted Improvement: Pinpointing stages where leads stall helps you refine your pitch or product fit.
• Stronger Valuation: Demonstrating clear, consistent demand can raise buyer confidence.

8. Stand Out in the Market

Even if your product is brilliant, it won’t matter unless you’re visible. Showcasing your expertise at conferences, in publications, or through podcasts can elevate your brand and attract potential buyers or partners.

“It’s not just about lines of code; it’s about building the right connections and showing up where decision-makers are looking.” – Marilyn Pearson Hendricks (MPH)

Why This Matters

• Broader Reach: More speaking engagements and PR opportunities expand your potential customer base.
• Enhanced Credibility: Thought leadership pieces and panels build trust in your expertise.
• Valuable Partnerships: Increased visibility often leads to co-marketing, tech alliances, or direct investment inquiries.

9. Don’t Be an Island

Founders who act as the “CEO show” can scare off investors. Buyers worry about a scenario where the company loses steam once the founder departs. Build a reliable leadership team that can operate smoothly without you.

“What a buyer is going to be terrified of is acquiring your business...and having you at the beach.” – Allen Born

Why This Matters

• Reduced Dependency: Multiple skilled leaders ensure operational continuity.
• Talent Retention: Individuals who see opportunities for growth and leadership roles tend to stick around.
• Buyer Confidence: A credible bench proves you’re thinking long-term, beyond a founder-centric model.

10. Hit Your Targets

Consistently meeting goals—whether monthly bookings or quarterly revenue—reassures buyers that you can forecast accurately and execute on promises.

“Missing your goals signals potential misalignment. Buyers pay attention to that detail more than you might think.” – Marilyn Pearson Hendricks (MPH)

Why This Matters

• Proven Track Record: Hitting numbers month after month demonstrates stability.
• Internal Discipline: A team aligned around realistic goals is better positioned for growth.
• Negotiation Power: Prospective buyers may offer better terms when they see consistent performance.

11. Choose the Right Advisors

A well-versed advisor can distinguish between a deal that fizzles and closes seamlessly. They often bring insight, connections, and frameworks that founders might not have.

“We serve as a good insurance policy... We vet your buyer and help you be ready for deeper questions.” – Allen Born

“In our work with founders, we look for subtle signals in their business. Sometimes it’s the overlooked areas that present the biggest opportunities.” – Marilyn Pearson Hendricks (MPH)

Why This Matters

• Industry Context: Advisors keep you aware of trends and potential shifts in buyer interest.
• Structured Preparation: They can help refine your pitch, smooth out financial discrepancies, and handle negotiations.
• Optimal Timing: Experienced advisors know when the market is ripe for your solution, boosting deal outcomes.

Embrace These Principles to Avoid Regret

Shaping a sale-ready business involves much more than just finding a buyer. It’s about strategic thinking, cohesive leadership, and consistent execution across all facets of your company. Each of these 11 “commandments”—from differentiating your offering to maintaining strong financial discipline—works together to reduce risk and provide a clear path to growth and eventual exit.

Explore the Full Discussion

For the full discussion, view the session on HR Tech Alliance’s YouTube channel:

Need More Help?

If you want tailored guidance, check out how we support HR tech and work technology leaders. We specialize in helping founders define their unique advantage, build a stable leadership structure, and ensure they’re well-prepared for the next phase—be it raising capital or negotiating a sale.

Questions about positioning your business for investors? Reach out!