We plan to sell our business to private equity in eighteen months, but our current Accountability Chart still has my name in the Visionary seat and my spouse in the Finance seat. How do we structure and transition these seats today to prove to a buyer that our business can operate independently of our family?

Question

Tyler Smith · Accepted Answer

Private equity buyers are looking for a business that runs on systems and a strong leadership team, not on the personal heroics of a founding family. If you and your spouse hold key seats on your Accountability Chart at the time of sale, a buyer will view this as a major risk and discount your valuation.

To prepare for a clean exit, you must systematically replace yourselves on the Accountability Chart over the next twelve months. Start by defining the exact roles for the Finance seat and hire a professional Finance Director or CFO who can fully GWC™ those responsibilities.

For your Visionary seat, you must document your strategic relationships and delegate your business development roles to a capable Sales or Marketing leader. Your goal is to have no operational seats with your name on them by the time you go to market.

Your Accountability Chart should show a complete, competent leadership team where every key seat is filled by a non-family employee who has been running their department successfully for at least two quarters. This proves to a buyer that the company is a self-sustaining machine, which maximizes your purchase price and ensures a smooth transition.