Boards often delay considering a sale until liquidity pressures emerge or growth slows, but the highest valuations typically come when companies are thriving and momentum is strong. Strategic adviser Itay Sagie argues boards need to proactively assess selling options alongside scaling or pivoting long before crises arise.
- Selling often comes too late, after growth stalls or cash tightens
- Founder fatigue and shifting goals should factor into strategic discussions
- Inbound buyer interest can signal undervalued market position
What happened
Boards frequently delay contemplating an M&A process until the company faces financial stress or growth deceleration, often treating a sale as a fallback plan rather than a strategic choice. This common approach causes them to lose leverage since acquirers prefer businesses that are thriving and expanding. Strategic adviser Itay Sagie highlights that when companies are performing well, that is precisely the time to explore market interest and potential sale opportunities.
Beyond market dynamics, founder perspectives also evolve over time after years of building their companies. Fatigue or changing personal priorities can influence strategic decisions and succession planning. Boards must recognize these shifts early and incorporate them proactively into discussions about scaling, pivoting, or selling rather than waiting until performance suffers.
Why it matters
Understanding when to consider a sale matters because timing greatly impacts company valuations and shareholder returns. Selling from a position of strength often attracts strategic buyers willing to offer premium prices for companies exhibiting growth momentum, healthy customer retention, and strong leadership teams. Conversely, waiting until a company is struggling diminishes valuation and leaves shareholders with fewer options.
Additionally, paying attention to repeated inbound acquisition interest provides valuable market signals that may reveal the company's greater strategic importance than management has realized. Such intelligence can guide boards in balancing growth and exit strategies, ensuring decisions align with long-term value creation rather than short-term survival.
What to watch next
Boards should maintain ongoing, candid assessments of the company’s strategic position, founder intent, and market signals. This includes evaluating inbound buyer inquiries not just as potential exit triggers but as indicators of market valuation and strategic trends. Engaging in these conversations well before performance issues arise prevents last-minute scramble and loss of negotiating strength.
Moreover, considering alternative value-creating actions like leadership transitions, product pivots, or operational turnarounds can complement or delay a sale to maximize future strategic options. The key is avoiding inertia and proactively balancing selling, scaling, or pivoting to serve shareholder interests best.