Michael Platner is an influential corporate strategist and business practices head at mega law firm Lewis Brisbois Bisgaard & Smith.
Exiting your business, whether through a sale, acquisition or capital event, is one of the most significant transitions an entrepreneur can make. It often represents not only the culmination of years of work but also the transfer of a legacy, a culture and personal identity.
In my decades advising founders and CEOs on growth and liquidity strategies, I’ve seen strong businesses miss their moment due to avoidable blind spots. While many leaders focus on top-line growth or product innovation, it’s often the overlooked fundamentals that make or break a wealth-creating liquidity event.
Here are five of the most common and quiet dealbreakers I’ve encountered, and why addressing them early could make the difference between a successful exit and a missed opportunity or broken deal.
1. The case for audited financials: If you can’t prove it, you can’t sell it.
Many business owners assume that steady revenue and loyal customers will speak for themselves. Unfortunately, buyers and investors don’t just want to hear a compelling growth story. They want proof, and that often means audited financial statements.
For example, I worked with a $40 million company that had incredible momentum and a clear market advantage. But they hadn’t invested in proper audits. As a result, the due diligence process dragged on for months, and the buyer’s deal team reduced their offer, knowing the seller had lost leverage.
In my experience, engaging a reputable accounting firm early on is one of the most impactful steps a founder can take. It shows discipline and builds the kind of financial credibility buyers need to feel confident.
2. A damaged reputation: Culture is more than just a buzzword.
A company’s culture and reputation are just as important as its financial health. Buyers don’t just acquire systems and processes, they inherit people, values and reputational risk.
In one deal I advised on, the business had strong margins and an impressive client roster. However, high employee turnover and negative online reviews signaled deeper issues to the buyer. Ultimately, it reduced the valuation and created hesitation around closing.
Creating a workplace where people feel respected and supported isn’t just good leadership. It’s a strategic advantage. Companies that are known for treating employees well tend to retain talent, reduce risk and attract stronger offers and higher valuations.
3. The importance of IP protection: You can’t sell what you don’t own.
Your intellectual property is typically one of your most valuable assets, yet too many founders treat it as an afterthought. In one instance, a software company lost leverage in a buyout negotiation after it was revealed that key parts of its codebase were developed by contractors without signed IP assignments. The buyer demanded indemnities, and the final deal value was reduced by nearly 20%.
Whether it’s a brand name, source code, design patent or proprietary formula, buyers want clear documentation that what they’re buying is fully owned and protected.
Make sure trademarks are filed, code is assigned and all proprietary content is clearly owned by the business. This creates clarity for the buyer and ensures you’re not leaving money or leverage on the table.
4. A lack of digital strategy: For some buyers, no digital plan means no future.
In my experience, one of the most overlooked yet increasingly critical factors in a business acquisition is your digital strategy. Buyers want to understand how customers find you, interact with your brand and how your business collects and uses data. In today’s market, digital channels are no longer optional, but they are a clear signal that your company is built for growth.
Companies lacking e-commerce functionality, modern CRM tools or a defined customer journey risk appearing outdated and difficult to scale. Even traditional businesses are now expected to maintain a digital footprint that aligns with evolving consumer expectations.
I advised a high-performing regional service company that had strong financials and operational success but limited online visibility. Their outdated website, lack of a CRM and absence of digital infrastructure led a potential buyer to lower their offer significantly, citing the time and investment needed to modernize the customer experience.
Investing in a seamless, responsive and data-driven digital presence can enhance your competitive edge and increase your perceived value in the eyes of strategic buyers. I’ve found it’s one of the clearest indicators that a company is future-ready and worth the investment.
5. The succession planning gap: If you leave, what’s left?
Many founders are so deeply involved in their business that they forget to plan for what happens after they step away. This can create anxiety for a buyer, especially if there’s no clear leadership structure in place.
For example, I advised a founder who had built a thriving health services company. When a buyer asked who would run day-to-day operations after the sale, there wasn’t a clear answer. The buyer paused the deal, and the founder had to spend nearly a year developing an internal team to carry the business forward.
A well-documented succession plan is more than just a formality. It signals stability and shows the business can continue to grow and thrive without its original leader.
Wealth-creating liquidity readiness starts well before the deal.
Selling a business isn’t just about hitting a revenue milestone. It’s about making your company as attractive, stable and low-risk as possible in the eyes of a buyer. The more clarity and confidence you provide, the more likely you are to command the valuation and the outcome you deserve.
The best time to address these five areas is long before you go to market. By focusing on operational maturity now, you can set yourself up for a smoother and more successful deal down the line.
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
