Insights by Candor Advisors

Figuring out what your company is worth is one of the first steps in exit planning, but acquiring that number shouldn't break the bank. Many founders mistakenly believe they must hire a professional appraiser right out of the gate, spending tens of thousands of dollars just to see if a sale makes financial sense. In reality, unless you are navigating a specific legal or structural event, there are far more cost-effective ways to gauge your market value. In the video below, Kirk Michie explains why you can likely skip the formal appraisal and how to use transaction advisors to confidently plan your exit.

The Reality: You Don’t Fully Control the OutcomeThe first hard truth is this: once you sell your business, you no longer control most personnel decisions unless you are willing to walk away from the deal.That doesn’t mean you’re powerless. But it does mean that promises, assumptions, or informal assurances can quickly create risk—both legal and operational.Employee outcomes depend largely on three things:The type of buyerThe strategic rationale for the acquisitionHow communication is handled before and after closingEach of these deserves careful consideration.How Buyer Type Shapes Employee OutcomesStrategic BuyersWhen the buyer is a strategic acquirer, outcomes depend on scale and intent.If your company is being acquired for geography, customer access, or a complementary product or service, there’s often a desire to keep operations largely intact—at least initially. In those cases, most employees continue in their roles, sometimes with minimal immediate change.However, overlapping functions are commonly consolidated. Finance, HR, administrative roles, and back-office support are the most exposed. Large organizations already have these functions centralized, and maintaining duplicate departments rarely makes sense.Importantly, these eliminations are usually not the primary motivation for the deal. They’re a byproduct of integration.Private Equity BuyersPrivate equity buyers typically want continuity. They are not operators, and they rely on existing teams to run the business.In many cases, private equity ownership leads to more structure rather than fewer people. Additional reporting, stronger financial controls, new systems, or leadership hires may be introduced to support growth.While workloads often increase, broad layoffs are uncommon unless the acquisition is part of a larger consolidation strategy.

In many straightforward transactions—such as the sale of a pass-through entity like an LLC or S-corp—proceeds are typically taxed as capital gains at the federal level. Depending on where you live, state capital gains taxes may also apply.For founders in high-tax states, state taxes alone can materially reduce proceeds. Combined with federal capital gains, this may result in the highest tax rate you’ve ever paid on a single event.This is the baseline—but it is not the whole story.

Once you reach the bottom of the funnel, the process becomes less theoretical and far more practical. At this stage, you’re no longer asking whether to sell or how the process works—you’re evaluating real offers from real buyers.This is where many founders make costly mistakes. Multiple offers can look similar on the surface, yet lead to dramatically different outcomes depending on structure, certainty, and risk. The headline number alone rarely tells the full story.This episode breaks down how to compare offers methodically, so you can see which deal actually delivers the best outcome—not just the biggest number.

Once you reach the bottom of the funnel, the conversation shifts from whether you’ll sell to how the deal will actually be structured. This is where specific deal terms start to matter—sometimes more than headline price.One of the most common and most misunderstood of those terms is the earn-out. It often shows up in a Letter of Intent and can look attractive on the surface. In reality, it’s one of the most important areas where founders need to slow down, understand the tradeoffs, and be clear-eyed about risk.This episode explains what an earn-out really is, why buyers propose them, and how to think about whether agreeing to one makes sense in your situation.

An LOI, or Letter of Intent, is a written document that outlines the basic terms under which a buyer proposes to acquire your business. It typically comes after initial conversations and early indications of interest, but before a definitive purchase agreement.Importantly, an LOI is not the sale of your business. It is a framework that allows both sides to agree on major points—price, structure, timing—so the buyer can justify entering formal due diligence. While parts of the LOI may be binding, the transaction itself is not finalized at this stage.Understanding this distinction is critical. Many founders either overestimate the security of an LOI or underestimate the constraints it creates once signed.

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As you move closer to selling, it’s natural to ask what investment bankers or business brokers actually cost. The numbers can feel opaque if you’ve never done a deal before.In this episode of The Funnel, Kirk explains typical fee ranges by deal size, how success fees work, what retainers look like, and how different advisors structure incentives. If you want clarity before engaging anyone, this is worth watching.

As founders move closer to selling, one common concern comes up: where do you actually find a buyer for your business?In this episode of The Funnel, Kirk explains how buyers are sourced, the difference between strategic and financial buyers, and why preparation matters more than hunting for a needle in a haystack. If you’re thinking ahead about who might buy your company, this will help you frame it correctly.

Once founders move past curiosity and decide to explore a sale, the next question is usually about process. What actually happens between deciding to sell and closing a deal?In this episode of The Funnel, Kirk breaks down the full sell-side process—from preparing materials and identifying buyers to due diligence and closing—so you can understand how all the pieces fit together.

In this episode of The Funnel, M&A advisor Kirk Michie explains when founders should consider hiring an investment banker and when other approaches may be appropriate. As business owners move deeper into the exit process, questions about deal structure, buyer access, and negotiation leverage become more important.Kirk explains that investment bankers are most valuable when a business is attractive enough to generate interest from multiple buyers. By creating competitive tension, bankers can help drive higher valuations, better terms, and clearer post-close outcomes. He also notes that founders negotiating directly with a single buyer often lack the leverage needed to achieve the best possible deal. For smaller transactions—often under $5–10 million—alternatives like business brokers, exit planners, legal-led processes, or marketplace listings may be more practical.This episode helps founders evaluate whether to hire an investment banker, understand sell-side advisory options, and weigh the trade-offs between direct deals and market-driven processes. For owners planning an exit, the video offers a realistic framework for choosing the right level of support.

In this episode of The Funnel, M&A advisor Kirk Michie explains how long it typically takes to sell a business and why founders often underestimate the timeline. Many owners assume their transaction will be simple due to business structure or limited complexity, but most deals follow a similar sequence regardless of size or industry.

Deciding when to sell your company is rarely straightforward. Even founders who are open to a sale often feel unsure about whether current conditions favor moving ahead or waiting. In this episode of The Funnel, Kirk outlines the practical factors that shape good timing, including performance trends, economic signals, buyer behavior, and sector-specific momentum. He explains when it makes sense to go now—and when patience may lead to a better outcome. Watch the video below for a clear framework on making a timing decision.

If you’ve been thinking about a potential sale but the numbers aren’t where you want them to be, you’re not alone. Many founders reach this stage and wonder what actually moves valuation.In this short episode of The Funnel, Kirk explains the three levers that make the biggest difference: professionalizing your financials, clarifying adjusted EBITDA, and reducing key risks like customer concentration and founder dependence.Watch the video here to see what buyers look for and how to strengthen your position before going to market.

In this episode of The Funnel, Kirk Michie tackles one of the biggest founder questions: when is the right time to sell?While many owners wait until they’re exhausted or facing setbacks, Kirk explains why the best time to go to market is actually when things are going well—when revenue is climbing, margins are strong, and your team can carry the business forward.He also breaks down specific internal and external signals to watch for—like contract renewals, industry appetite, and private equity activity—that can dramatically affect your valuation.

The Planning PhaseAs founders move down the funnel, they shift from curiosity to preparation. This is where strategic thinking begins—planning financial readiness, identifying potential buyers, improving operations, and organizing key documents. It’s about turning general interest into a concrete plan.The Execution PhaseAt the bottom of The Funnel is the moment of action: hiring advisors, budgeting for transaction costs, and officially going to market. This phase transforms preparation into execution and ultimately leads to the sale of the business.Why The Funnel WorksThe beauty of The Funnel is its clarity. Each phase helps founders focus on the right priorities at the right time. By breaking the process into smaller, manageable steps, it reduces confusion, minimizes risk, and helps founders make smarter, better-timed decisions.

What Happens to Intellectual Property When You Sell Your Company?For many founders, intellectual property (IP) is one of the most overlooked—but most valuable—parts of a business sale. While revenues, customers, and cash flow often dominate the conversation, IP is a critical asset that buyers evaluate carefully in M&A transactions.Defining Intellectual Property in a DealIn the context of a business sale, IP includes more than patents and trademarks. It covers your brand, website, business name, proprietary processes, and any other intangible that differentiates your company. Buyers see these assets as central to both risk management and long-term growth potential.Why IP Matters for ValuationWell-protected IP can enhance valuation by demonstrating clear ownership and defensibility. Conversely, poorly documented or disputed IP rights can reduce value or even jeopardize a transaction. Founders should take steps in advance to document ownership, register trademarks, and ensure employee or contractor agreements properly assign rights to the company.What Buyers ExpectIn due diligence, buyers will confirm that your IP is transferable and free of encumbrances. This often involves reviewing domain registrations, contracts, licensing agreements, and any pending disputes. Clean records provide confidence that the buyer will fully own what they’re paying for.