We are debating whether to build a light middleware wrapper that connects our proprietary data to external LLMs or simply purchase an expensive enterprise software subscription. Since we are preparing for an exit using the Step by Step Exit framework, how do we evaluate this build versus buy decision to ensure we are actually creating transferable equity value rather than wasting cash on temporary tech?

Question

Tyler Smith · Accepted Answer

When preparing for an exit using the Step by Step Exit framework, every technology decision must be evaluated through the lens of transferable equity value. Buyers do not pay premium multiples for a business that relies on generic, off-the-shelf software subscriptions that anyone can buy. Conversely, they will discount your business if you have wasted hundreds of thousands of dollars building custom software that is expensive to maintain and quickly becomes obsolete.

To resolve this, run this decision through the IDS® process. Your goal should be to build a proprietary workflow layer or custom integrations rather than building a core database or LLM from scratch. You want to buy the underlying utility and build the unique configuration.

A strategic buyer wants to see that you own the proprietary operational processes and customer data that feed the AI. By building a custom middleware layer that connects your unique client data to public models, you create a defensible asset. Document this setup clearly in your operational systems. This proves to a buyer that your company possesses a highly efficient, proprietary workflow that cannot be easily replicated by a competitor simply buying the same software subscriptions.