Hi Reader,
A founder I coach runs an agency. When speaking about their vision, they said:
"We want to sell and exit our agency in 2028 and start an E-commmerce business"
As I am coaching them, I decided to put them in touch with "buyers." I got them on the phone with someone in my network who buys agencies for a living, a guy who sat in my Birthing of Giants peer group back in 2021 sketching out his vision for where he wanted to take his own business. He'd already built, scaled, and sold two e-commerce brands by 26. Since then he's bootstrapped his own company, with zero outside funding, into a business that's helped more than 5,000 brands and is worth well over $300 million. He is now a Birthing of Giants Board of Experts.
He knows exactly what buyers look for, because he's been on both sides of that table.
What He Actually Said
"High EBITDA margins in an agency mean the founders are doing everything. You're actually worth less, because I'm worried you leave and the whole thing falls apart."
There are 90,000 marketing agencies in the US, he added. The moment a founder doesn't like his deal structure, he just moves to the next one. Buyers aren't acquiring the brand or the IP either. They're acquiring employees and client contracts, and if the founder is still the one doing the client work, there's not much there to actually buy.
Then he laid out the real math:
- Sub-$1M EBITDA: expect a 100% earn-out, no cash upfront, and 3-5 more years running the business to earn what it's worth
- $5M+ EBITDA, real systems, no founder dependency: what it actually takes to exit on good terms
Anything short of that isn't an exit. It's a job with extra steps.
The Realization
My client had assumed, like most owners do, that an exit was mostly a matter of timing: build for a couple more years, find a buyer, cash out.
What he actually walked away with was this: exiting well is a 3-10 year build, not a transaction, and the business as it stood wasn't close.
That's a hard thing to sit with alone. It's easier to absorb in a room with people who've faced it, or from a buyer willing to tell you the truth, than staring at your own numbers in a vacuum.
Why This Matters More Than the Story Itself
Most owners never get this conversation. They stay in their own bubble, assuming their business is worth what they hope it's worth, until they try to sell it and find out otherwise.
Not because they don't want the truth. Because they don't have a way to get a real buyer on the phone and ask a hard question.
The fastest way to find out what you don't know is to talk to someone who already does, and most owners simply can't get in the room.
Worth Asking Yourself
- Can your business run six months without you?
- Are you operating in your own bubble or are you surrounding yourself with others who have been there done that?
- Are you surrounding yourself with other founders and business owners and learn from each other and hold each other accountable?
- Is your revenue recurring, or are you still chasing project work?
- If you sat across from a real buyer tomorrow, would you like what you'd hear, or would it be the first time you'd actually heard it?
The guy who told my client all of this was sketching his own vision on a page in my Birthing of Giants peer group four years ago. I was sketching out with the Birthing of Giants framework how I will grow a $100M business to a unicorn exit. Somebody made sure we had that room.
The only difference between his outcome and yours is whether you get one too.
Mathias Ihlenfeld | Entrepreneur | Coach | Advisor
P.S. I'm the Regional Cohort Leader for Birthing of Giants. The next cohort starts October 15th. The commitment is smaller than people expect: two sessions over six months, one day a quarter to actually work on your business instead of in it, built to make you capital-ready by design. If any of this hit close to home, reply and I'll send you the details.