Preparing for a 2026 Exit

Happy New Year. I spent it with my family, but honestly, I’m ready to transact. What’s on your radar?

If you are contemplating a sale, the work is not getting “ready for diligence.” It is earning buyer confidence early, with proof that holds up under scrutiny.

What follows is a clear, practical set of cliff notes on what actually determines outcomes.

How buyers think and why deals fail
Buyers rarely walk because of one dramatic issue. Most processes break because confidence decays over time. Friction is interpreted as information: slow responses, inconsistent numbers, missing contracts, vague answers. As confidence falls, buyers either step away or protect themselves through lower price and tougher terms.

The underlying question on the buy side is simple: if I own this company six months from now, what could go wrong that I am not seeing today?

The value equation buyers actually use
Comparable multiples are shorthand. The real model is expected cash flows adjusted for risk.

Buyers pay more when they believe cash flows are larger, more durable, and more controllable. They pay less, or they shift risk back to you through structure, when cash flows feel fragile or uncertain.

What “exit ready” actually means
Exit ready is not tidiness. It is transferability.

The test is whether a buyer can move from interest to conviction without being forced to pause. That requires two things:
• You can support your valuation expectations with verifiable evidence
• You can answer diligence questions quickly, consistently, and without drama

In practice, exit readiness shows up across five dimensions:
• Performance clarity: consistent definitions, defensible run rate, explainable variances
• Operational transferability: the company runs without founder heroics, with delegated decision rights and documented processes
• Risk containment: key risks are identified, measured, and managed with transparency
• Data room discipline: current documents, clean version control, reconciled metrics
• A credible equity story: coherent, evidence backed, and consistent across materials and answers

Revenue quality versus growth optics
Buyers like growth. They discount fragile growth.

They underwrite revenue quality: diversified demand, retention and renewal behavior, repeatable buying patterns, and a pipeline with consistent conversion. Growth driven by one customer, one channel, one salesperson, or one acquisition lever reads as brittle.

Two packs do disproportionate work in diligence:
• A customer and revenue pack tied cleanly to the P&L, showing concentration, renewal behavior, and retention
• A pipeline and forecast pack with objective stage definitions, conversion history, slippage behavior, and a documented forecast method

Founder and key person risk
Founder centrality is not fixed by reassurance. It is fixed by delegation, documented processes, and customers who confirm continuity.

Buyers watch for signals that the business cannot operate without a small number of individuals. If key relationships, pricing decisions, approvals, reporting, or escalations route through one person, confidence falls and terms tighten.

Diligence should be confirmation, not discovery
If you do not supply a clean fact base, buyers build one conservatively.

Preparation replaces reassurance with proof: information a buyer can verify independently, without relying on your interpretation. When proof exists early, diligence accelerates and negotiations become less adversarial.

Data discipline is not clerical. It is valuation protection.
• Reconcile revenue by customer to the P&L
• Stabilize gross margin methodology and publish bridges
• Lock metric definitions to prevent drift
• Maintain one source of truth, a controlled Q&A log, and version control in the data room

Why terms matter as much as price
Many sellers focus on headline price and overlook terms. Terms determine how much of the price is realized, when it is realized, and under what conditions it can be clawed back.

When buyers are nervous, they rarely say no outright. They say “yes, but,” and shift risk back to the seller through structure: earnouts, escrows or holdbacks, working capital true ups, seller notes, longer indemnities, tighter covenants.

If you want leverage on terms, your job is to convert risk from unknown to bounded, with evidence.

Timing realities and preparation horizons
Most owners overestimate what can be fixed during diligence. Preparation typically spans 6 to 24 months, sequenced by what can be made buyer proof in time.

If the window is closer, prioritize proof and risk containment: reconciled financials, contract and IP hygiene, disciplined data room execution, and fast, consistent responses.

If the window is longer, add transferability and track record: reduce dependency, improve KPI discipline, strengthen reporting cadence, and execute a small number of changes that show up in results and become believable to a buyer.

The simplest discipline that changes outcomes
Run a pre-mortem before you get too deep. Assume the deal fails in the final two weeks. Identify what caused conviction to break, define what evidence would satisfy a skeptical buyer, and fix or mitigate the high-impact items.

Exit preparation is an operating priority. The process works best when it is run like one: clear owners, weekly cadence, a single source of truth, and response standards where a fast wrong answer is worse than a slightly slower right one.

I’ll be on the road over the coming months, mostly around conversations where investment and value creation intersect. If our paths cross, even briefly, it would be good to connect.

• Jan 19–20: ICE Conference, Barcelona
• Jan 27–30: London
• March 9–11: Speaking at MoneyLIVE, London
• March 16–19: Speaking at Merchant Payment Ecosystem, Berlin
• Late April (likely): Zurich
• June: Money20/20 Amsterdam

If a strategic-exit transaction is on your mind this year, or you’re quietly pressure-testing readiness, I’m always open to a thoughtful conversation.

Tom C. Schapira
Founder and CEO
Imagine Capital Group
E: [email protected]
Website http://www.imaginecapitalgroup.com

Securities Offered through Wellesley Hills Securities. Member FINRA/SIPC