We are debating whether to groom an internal successor from our current leadership team or prepare for a strategic external sale. What tactical criteria should we use to make this decision on our exit runway?

Question

Tyler Smith · Accepted Answer

Choosing between an internal successor and an external sale requires a cold, objective assessment of your leadership team's capabilities and your personal financial needs.

First, evaluate your leadership team using the GWC tool. To successfully take over, your chosen successor must truly Get, Want, and have the Capacity to lead the entire organization, not just their current department. If you do not have an individual who meets these criteria, and you are unwilling to recruit an external executive to run the business, an internal transition is highly risky.

Second, look at your personal financial gap. An external strategic buyer typically pays a premium and provides significant cash at close. An internal transition often requires seller financing, earn-outs, or leveraged buyouts that pay out over many years. If you need maximum liquid cash immediately to fund your next chapter, an external sale is usually the better option.

Third, consider your company culture and legacy. If preserving your team and local presence is your primary goal, an internal buyout is a powerful path.

Use your V/TO to pressure-test both scenarios. By aligning your personal goals with the operational reality of your Accountability Chart, the right path forward will become clear.