Intro: The Myth of Readiness
Founders often approach M&A with a single question: “Are we ready yet?” The assumption is that a perfect, box-ticked moment will arrive - profitable enough, growth curve steep enough, metrics photogenic enough - that selling becomes self-evident. In practice, three forces conspire against that ideal moment:
- Let's put the conclusion at the top this time - there is no such thing as the perfect time. Markets never stop moving, and competitors never stop bidding.
- Macroeconomic shocks. Interest-rate spikes or geopolitical tremors can slash valuations long before you reach that “next milestone.”
- Personal unpredictability. Health events, family priorities, or sudden burnout can rewrite your timeline overnight.
The goal of this article is to reframe readiness and highlight early signals that it might be the right time to sell, even if your instincts say it feels too early.
Defining “Too Early” and Why It’s Misleading
Founders typically label three situations as “too early”:
- Not profitable (enough). You may still be burning cash or running thin margins, but buyers often care more about trajectory than current net income.
- Still growing. You fear leaving money on the table if tomorrow’s ARR outshines today’s.
- Haven’t hit the vanity milestone. Metrics like $10 M ARR or a clean EBITDA margin feel symbolically important, yet buyers value strategic fit over round numbers.
Buyers think differently. Strategic acquirers optimise for synergy windows; private-equity sponsors optimise for roll-up timing; both may see peak value before you reach the milestones you imagine. Waiting for perfect profitability can easily collide with unforeseen life changes or a market downturn - turning “maybe later” into “too late.” I’ve seen this scenario play out so often, it’s the main reason I wrote this article.
The Strategic-Buyer Window
Your product can be worth more to an acquirer today than to yourself tomorrow. Reasons include:
- First-mover synergies. A buyer may pay a premium to keep a rival from acquiring you first.
- Tech integration timing. Your architecture or data set might slot perfectly into a buyer’s roadmap this year but be obsolete next.
- Competitive land-grab. Roll-ups in fragmented markets reward buyers who close deals early and compound scale.
In many industries, strategic value peaks while you are still refining profitability. A “too early” sale can therefore maximise value precisely because the buyer’s ROI math looks different from yours.
Macro & Market Timing Signals
- Inbound interest heats up. If you receive multiple unsolicited approaches within a short window (maybe you are here because you received one from us), the market is telling you something.
- Sector-specific multiples expand. Track EV/Revenue or EV/EBITDA comps; a temporary multiple spike can justify an earlier exit.
- Consolidation waves. When larger players begin programmatic acquisitions, missing the first wave often means settling for lower-tier buyers later.
- Regulatory tailwinds or deadlines. Pending legislation (privacy, AI, ESG) can drive acquirers to lock in compliant assets sooner rather than later.
Ignoring these market cues because you feel “not ready” risks colliding with the next downturn or rising rates - events entirely outside your control.
Internal Business Signals You Shouldn’t Ignore
- Burn vs. growth crossover. If rising CAC or churn threatens the slope of your growth curve, an early sale can monetise momentum while it’s intact.
- Founder or key-exec fatigue. Energy and vision are part of enterprise value; if yours is waning, buyers will notice soon anyway.
- Customer concentration risk. Heavy reliance on a handful of accounts may slash valuation later if diversification stalls.
- Technical debt ceiling. Modernising legacy code or infrastructure could drain cash just when outside capital grows more expensive.
Valuation Risk: Waiting May Cost You
The next milestone rarely guarantees a proportionate uptick in price. Reasons include:
- Risk-adjusted discounting. Buyers shave value for execution risk on future goals you believe are “almost certain.”
- Dilution dynamics. Funding another growth cycle may force you to accept dilution now for uncertain upside later.
- Market re-rating. If sector multiples compress by two turns of revenue, extra ARR may still yield a lower exit price.
Consider your equity like an option with an expiry date keyed to market conditions, not just company performance.
Selling Doesn’t Have to Mean Exiting
It's important to note that a transaction can deliver liquidity without a full goodbye:
- Majority recap. De-risk personally while retaining a stake for the next leg.
- Minority secondary. Sell a portion of shares to institutional investors, maintaining control but gaining breathing room.
- Earn-outs and rollovers. Capture current value and participate in future upside alongside the buyer.
Structuring flexibility around your continued role can turn an “early” sale into a strategic growth partnership.
How to Explore M&A Without Fully Committing
- Quiet market check. Engage a trusted advisor to gauge buyer appetite and valuation bands confidentially.
- Selective conversations. Approach a small set of strategic counterparts under NDA to test fit, not to run a full auction.
- Data-room lite. Prepare essential KPIs and financials. The exercise improves internal hygiene even if you hold.
- Decision gates. Set thresholds (valuation, cultural fit) at which you would pivot from exploratory to active sale mode.
Exploration does not obligate you to transact; it equips you with the knowledge to act quickly if personal or macro factors suddenly change.
Consider Acting Before the Bell Stops Ringing
Hopefully as we have made clear, there will never be a bell that rings to announce “now you are ready.” Waiting for perfect profitability or the next symbolic metric ignores realities often beyond your control - your health, your family, or global macroeconomics. An informed, early look at the M&A landscape is a strategic safeguard, not a surrender.
By recognising external signals, monitoring internal inflection points, and appreciating that liquidity and control are not mutually exclusive, founders can choose timing - not have timing choose them.
Thinking it might still be “too early” for you? Start gathering data anyway. The best exits are made by founders who prepared before they felt entirely ready.