Skill: 1kalin/afrexai-exit-planning (version 1.0.0)

# Exit Planning Framework Generate a comprehensive business exit readiness plan. Covers valuation prep, buyer targeting, due diligence readiness, timeline planning, and post-exit transition. ## Usage "Build me an exit plan for my SaaS company" "Assess my business exit readiness" "Create a 24-month exit preparation roadmap" ## What You Get ### 1. Exit Readiness Score (0-100) Rate across 8 dimensions: - **Revenue Quality** (25 pts): Recurring %, concentration, growth trajectory - **Financial Hygiene** (15 pts): Clean books, GAAP/IFRS compliance, audit-ready - **Customer Metrics** (15 pts): NRR >110%, logo retention >85%, diversification - **Team Independence** (10 pts): Can it run without founder for 90 days? - **IP & Moat** (10 pts): Patents, proprietary tech, switching costs - **Legal Clean Room** (10 pts): No pending litigation, clean cap table, contracts assigned - **Growth Story** (10 pts): TAM expansion, product roadmap, market position - **Operational Maturity** (5 pts): SOPs documented, systems automated, KPIs tracked ### 2. Valuation Range Estimator **SaaS Multiples (2026 benchmarks):** | ARR Growth | NRR >120% | NRR 100-120% | NRR <100% | |-----------|-----------|-------------|-----------| | >40% | 12-18x ARR | 8-12x ARR | 5-8x ARR | | 20-40% | 8-12x ARR | 5-8x ARR | 3-5x ARR | | <20% | 5-8x ARR | 3-5x ARR | 2-3x ARR | **Services/Agency Multiples:** | EBITDA Margin | Growing >20% | Growing 10-20% | Flat/Declining | |-------------|-------------|---------------|----------------| | >25% | 6-10x EBITDA | 4-6x EBITDA | 3-4x EBITDA | | 15-25% | 4-6x EBITDA | 3-4x EBITDA | 2-3x EBITDA | | <15% | 2-4x EBITDA | 2-3x EBITDA | 1.5-2x EBITDA | **Ecommerce/DTC:** 3-5x SDE (sub-$5M), 4-8x EBITDA ($5M+) ### 3. Buyer Landscape Map **Strategic Buyers** (highest multiples): - Competitors seeking market share - Adjacent companies wanting your vertical/capability - PE platform companies doing roll-ups - International companies entering your market **Financial Buyers** (PE/Growth Equity): - Lower middle market PE ($10M-$100M enterprise value) - Growth equity ($5M-$50M revenue companies) - Search funds ($1M-$10M EBITDA targets) - Family offices (patient capital, flexible structure) **Individual Buyers:** - ETA searchers (MBA-backed acquisition entrepreneurs) - Industry operators looking to buy vs build - SBA loan-backed buyers (up to $5M) ### 4. Pre-Exit Checklist (24-Month Countdown) **Month 24-18: Foundation** - [ ] Engage M&A advisor or investment banker - [ ] Quality of Earnings (QoE) pre-assessment - [ ] Clean up financials — separate personal, normalize add-backs - [ ] Document all revenue streams with proof of recurring nature - [ ] Update or create operating procedures for all core functions - [ ] Resolve any legal issues (IP disputes, employee claims, contract gaps) **Month 18-12: Optimization** - [ ] Reduce customer concentration below 20% for top client - [ ] Lock in key employees (retention bonuses, equity vesting acceleration) - [ ] Eliminate founder dependency — delegate all daily ops - [ ] Build management team that buyers want to retain - [ ] Accelerate profitable growth (not growth-at-all-costs) - [ ] Clean up tech debt, document architecture **Month 12-6: Preparation** - [ ] Prepare Confidential Information Memorandum (CIM) - [ ] Build detailed financial model with 3-year projections - [ ] Create data room with all due diligence documents - [ ] Identify 30-50 potential buyers across all categories - [ ] Get formal valuation or fairness opinion - [ ] Tax planning — structure for long-term capital gains **Month 6-0: Execution** - [ ] Launch controlled auction or targeted outreach - [ ] Manage NDAs and information flow - [ ] Navigate LOIs — compare structure, not just headline price - [ ] Due diligence support (expect 60-90 days) - [ ] Negotiate purchase agreement, representations, escrow - [ ] Plan transition period (typically 6-24 months) ### 5. Deal Structure Decoder **Common structures and what they mean for sellers:** | Structure | Seller Risk | Tax Impact | When Used | |----------|-----------|-----------|-----------| | All Cash | Lowest | Immediate gain | Strong seller position | | Cash + Earnout | Medium | Deferred gain | Revenue validation needed | | Cash + Seller Note | Medium | Installment sale | Buyer financing gap | | Equity Rollover | Highest | Tax-deferred | PE recaps, strategic mergers | | Asset Sale | Varies | Ordinary income risk | Liability protection for buyer | | Stock Sale | Varies | Capital gains | Simpler, seller-preferred | **Earnout Red Flags:** - More than 30% of total value in earnout = risky - Earnout period >2 years = too long - Metrics you can't control post-close = avoid - No accounting standard specified = dispute guaranteed - Buyer can make decisions that tank your earnout = walk away ### 6. Tax Optimization Strategies **US Sellers:** - QSBS exclusion: up to $10M or 10x basis tax-free (Section 1202) - Installment sale: spread gain over payment period - Opportunity Zone reinvestment: defer and reduce gains - Charitable remainder trust: donate appreciated stock pre-sale - ESOP sale: 1042 rollover for C-corp shareholders **UK Sellers:** - Business Asset Disposal Relief (BADR): 10% rate on first £1M - EIS/SEIS reinvestment relief - Holdover relief for gift of business assets - Entrepreneurs' Relief planning (lifetime limit) ### 7. Post-Exit Transition Plan **Founder Transition (typical terms):** - 6-month transition: light involvement, knowledge transfer - 12-month transition: part-time advisory, customer introductions - 24-month transition: full operational handover (PE-backed deals) - Non-compete: usually 2-3 years, geographic + industry scope **What to negotiate before signing:** - Transition compensation (salary + benefits continue) - Acceleration of remaining equity/earnout on termination - Scope of non-compete (narrower = better for you) - Ability to invest in non-competing businesses - Personal brand rights (can you still speak, write, consult?) ## Industry Exit Benchmarks | Industry | Median Multiple | Median Deal Size | Avg Time to Close | |---------|----------------|-----------------|-------------------| | B2B SaaS | 7.2x ARR | $28M | 6-9 months | | IT Services | 1.8x revenue | $12M | 4-6 months | | Healthcare IT | 5.5x ARR | $35M | 8-12 months | | Ecommerce | 4.1x SDE | $2.5M | 3-5 months | | Agency/Services | 4.8x EBITDA | $8M | 4-7 months | | Manufacturing | 5.2x EBITDA | $15M | 6-9 months | | Fintech | 9.1x ARR | $45M | 7-10 months | ## Common Exit Killers 1. **Customer concentration** — One client >25% of revenue scares every buyer 2. **Founder dependency** — If you ARE the business, it's worth less without you 3. **Messy financials** — Commingled expenses, no monthly close, no forecasting 4. **Key person risk** — Critical employees with no contracts or retention plan 5. **Revenue quality** — One-time revenue dressed up as recurring 6. **Undisclosed liabilities** — Tax issues, pending claims, contract breaches 7. **Unrealistic expectations** — Pricing based on 2021 multiples, not 2026 reality ## Resources - [AI Revenue Leak Calculator](https://afrexai-cto.github.io/ai-revenue-calculator/) — Find where your business is losing value before exit - [AI Agent Context Packs](https://afrexai-cto.github.io/context-packs/) — Industry-specific frameworks ($47/pack) - [Agent Setup Wizard](https://afrexai-cto.github.io/agent-setup/) — Automate operations to reduce founder dependency **Bundles:** Pick 3 Packs $97 | All 10 Packs $197 | Everything Bundle $247


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