Deal Flow with Ryan Ray, February 2026
What Most Owners Learn Too Late About Selling
Business Exits partner and COO Rob Kale sat down with Ryan Ray for a conversation covering the full arc of a sale, from what actually moves a multiple to what happens to your team afterwards. It is published as seven short segments, gathered here in the order they are most useful to work through.
The hard truth about selling your business
Most owners come into a sale with expectations formed by headlines, by what a competitor supposedly got, or by a number they decided on years ago. The gap between that and what a buyer will actually pay is where most transactions run into trouble.
This is the segment to start with if you are early in thinking about an exit, because the rest of the conversation builds on it.
The difference between 3x and 4x
Most businesses at this level sell for somewhere between three and seven times adjusted profit. Owners tend to focus on the profit figure, but the multiple is the other half of the equation, and a single turn can be worth hundreds of thousands of dollars on an otherwise identical business.
What separates a three from a four is rarely one dramatic thing. It is the accumulation of growth, depth of management, how concentrated the customer base is, how clean the books are, and how much of the business depends on the owner personally.
How to actually get paid your full valuation
An agreed price and the money that reaches your account are not the same number. Part of the purchase price often sits in an earn-out, contingent on the business performing after you have handed it over, which is the arrangement sellers find hardest to accept.
This segment is about closing that gap: how to structure a deal so the headline figure is one you actually collect.
What is a CIM?
The confidential information memorandum is the document that presents your business to prospective buyers. A buyer signs a non-disclosure agreement and then receives the CIM, which is usually their first real look at the company: what it does, how it makes money, what the financials show, and where the opportunities are.
Building it is one of the first things that happens once a business goes to market, and the quality of it shapes how seriously buyers take the opportunity.
The brutal conversation about closing
Almost every first conversation opens with the same question: what is my business worth? Rob works toward an answer rather than deflecting it. He will give an owner a rough figure in the moment, based on what he has heard on the call, while being explicit that it is a back-of-the-envelope number subject to change once he has seen financials.
Once there is some trust and the owner starts asking about buyers and offers, the conversation turns to the part most first-time sellers have not considered.
Most deals are not all cash. The valuation is the headline figure, but what arrives at closing is usually most of it rather than all of it.
His example is a business he had spoken to the previous day where a single client, Walmart, accounted for roughly ninety-five percent of revenue. From the owner's side that relationship may have run for years and feel entirely secure. Rob's advice is to picture it from the buyer's chair instead. A regulatory shift, or a corporate decision made several levels above anyone the business deals with, could change everything overnight. Longevity is not the same as safety.
A buyer who sees that risk does not necessarily walk away. They hedge, and they hedge by changing the shape of the offer rather than the headline number, usually through a seller note or an earn-out.
On earn-outs, Rob is candid that they are not what a seller wants to hear about, but he explains where they come from and the explanation makes them easier to accept. An earn-out typically appears when there is a gap between what the seller wants and what the buyer will pay. Rather than stalling, the buyer offers to pay the higher figure on the condition that the business performs well enough to justify it. It is a bridge across a disagreement about value, not an attempt to claw money back, and it exists so that a deal which would otherwise die can happen.
His method in these conversations is to move from the large questions toward the finer technical ones in order: the headline valuation first, then how a deal is structured, and only then the detailed economics. Working capital always surfaces eventually, usually phrased as what happens to the cash in the account and the money customers still owe. A first-time seller arrives with a few large worries, and until those are addressed there is no room to absorb anything else.
Why your key employees might leave after you sell
The people who make a business work are rarely party to the transaction, but they decide whether it survives the handover. A sale introduces uncertainty for everyone who works there, and the employees most able to leave are usually the ones a buyer most needs to keep.
That risk shows up in the price. A buyer evaluating a company where everything depends on two or three individuals will price that exposure in, or ask for structure that protects them against it.
Why M&A is so unpredictable
Rob and Ryan close with stories from deals that went sideways in ways nobody could have planned for. It is the lightest segment of the seven and also, for anyone about to go through a sale, among the most useful.
The practical lesson is that a transaction involves a lot of people, each with their own interests and timelines, and surprises are the normal condition rather than the exception. Expecting that makes them considerably easier to handle.