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I hope you’re having a great week! In the last issue we covered QSBS and the 2025 rule changes, and today we’re staying close to the same theme: what actually happens at the end.

Let’s talk about ⬇️

Picture two SaaS companies. Both at $15M ARR. Both get the same acquisition offer on the same day, at a multiple both founders think is low.

Founder one has 18 months of runway, cohort-level retention data, and a Rule of 40 score above 30.

Founder two has 8 months of runway.

Founder one says no and keeps building. Founder two takes the call, and the buyer already knows how much runway is left.

The businesses might be equally good. The outcomes won’t be.

That’s the whole point of this issue. Your exit gets priced years before anyone asks for a data room. The finance infrastructure you build when nobody outside the company is watching decides whether you sell on your timeline or someone else’s.

I’m exploring what AI should actually do for finance teams. Not demos. The real work that eats your week.

Tell me where your time goes and what you’d hand off tomorrow. Everyone who answers gets the full results.

Nearly every SaaS exit lands in one of four buckets. Each has its own buyer, its own valuation logic, and its own prep timeline.

At $5-50M ARR, strategic acquisition is the default by a wide margin.

IPO is realistic above roughly $100M ARR with a durable Rule of 40 score. If it’s even a long-term possibility, your finance function has to look like a public company’s years before the S-1.

Acquihire is what happens when better options run out. If that word starts showing up in your exploratory conversations, treat it as a warning about your unit economics.

PE has become a real path for profitable, retention-strong businesses, especially in vertical software. And a secondary sale can give a founder partial liquidity without selling the company. If founder liquidity is the actual goal, say that to the board directly.

The slide: last quarter’s ARR, churn, burn, and pipeline. Accurate, well formatted, complete.

What was missing: a recommendation.

The board got four slides of history and no statement of what management thought should happen next. So the discussion drifted, and the one question that mattered never got asked: what happens if we don’t raise or sell in the next 18 months?

The fix: every board update states the trade-off and picks a side. Slower growth with 18 months of runway, or faster growth with 10. Recommend one. Let the board argue with a position instead of guessing at one.

Treat exit value as a range built from three things: revenue quality, margin profile, and growth efficiency. Five steps.

1. Clean your ARR base. Strip out one-time revenue, services that won’t transfer to a buyer, and flag any single customer above 15% of ARR. Buyers discount concentration immediately, and they’ll find it in diligence whether it’s in your headline or not.

2. Calculate NRR and GRR by cohort. NRR above 110% with GRR above 90% puts you in premium territory. NRR below 100% gets priced into the multiple. You won’t explain it away on a call.

3. Apply a category-adjusted multiple. Public SaaS multiples compressed hard from the 2021 peak, and private M&A usually trades at a discount to public comps. Retention quality moves the multiple more than company size does. Two companies at the same ARR can be priced two to three times apart on retention alone.

4. Layer in Rule of 40. Growing 25% at break-even scores the same as growing 40% while burning 15 points of margin. Buyers are increasingly indifferent between those two paths if the score clears roughly 30-40. They discount companies that clear neither growth nor profitability.

5. Stress-test against runway. Model a no-new-financing case and compare it to your realistic time to close. If runway is shorter than the deal timeline, you’re negotiating from weakness before the first call.

Read down the table and the pattern is obvious. Optionality is the asset. Clean retention plus runway lets you walk away from a bad offer. Neither one alone does it.

Someone will quote it at you. “90% of startups fail.”

It comes from research on venture-scale, innovation-stage startups across their full lifecycle. Most of that attrition hits in years two through five, concentrated in pre-revenue and pre-product-market-fit companies.

US Bureau of Labor Statistics data on all businesses tells a different story: roughly 20% fail in year one, about 49% by year five.

A SaaS company at $5-50M ARR with retained customers and a working sales motion has already cleared the stretch of the curve where most of that failure lives. Using the 90% figure as your personal odds is a category error.

One blended LTV:CAC in the data room. Buyers know a single ratio hides variance. Present it as a range by cohort and channel with the assumptions written down. A range you can defend survives the follow-up question.

Cleaning up the numbers after the term sheet. You can’t fix retention, cut concentration, or rebuild a forecast during diligence. Run the readiness checklist annually, whether or not you plan to sell that year.

Board decks that report history. See the segment above. State the trade-off. Recommend one side.

One valuation number. Model base, upside from fixing retention, and downside from a slower market. The range becomes a planning tool instead of an anchor.

Hiring a full-time CFO to look exit-ready. Polish and headcount don’t fix a forecast that’s never been stress-tested. Get the FP&A discipline right first. Add permanent headcount when the complexity justifies the fixed cost.

Run it this quarter, whether or not a sale is on the table.

More than two unchecked means circumstances are setting your exit timeline. Start 18-24 months before you want the option. Concentration fixes and the cash-to-accrual switch alone take multiple quarters.

Exits get decided long before the banker shows up.

Cohort-level retention data, a runway model with real scenarios, and board reporting that frames decisions are what give a founder the right to say no. The founders forced into rushed sales usually had good businesses. They just started building the discipline when the deadline arrived.

If you’re the finance lead, this is the conversation to have with your CEO now, while there’s still time for the numbers to change.

Reply “EXIT” and I’ll send the exit-readiness scorecard. The eight-point checklist as a working sheet, the valuation range builder with retention and Rule of 40 adjustments, and the three-scenario runway tab.

First real rain in Valencia in months, and the whole city is acting like it’s a hurricane.

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