tyler-smith.com · Questions & Answers

My business partner wants to exit in twelve months, but I want to invest in a three-year runway to maximize our enterprise value. How do we use the V/TO and our Accountability Chart to resolve this partnership misalignment before it ruins our valuation?

Partnership misalignment is a massive red flag for buyers. If a buying team senses friction or conflicting timelines between co-founders, they will exploit that leverage to drive down the purchase price or walk away entirely. You must resolve this internal conflict before you take any steps toward a sale. Start by scheduling a dedicated partner-only session outside of your regular quarterly meetings. Use the V/TO to align on your long-term vision. Be brutally honest about your personal goals, financial targets, and desired exit timelines. If your partner is determined to leave in twelve months, look at your Accountability Chart. Can you transition their seats to capable internal leaders within that timeframe? By moving them out of daily operations and into a purely passive shareholder role, you can allow them to exit operationally while keeping the business on track for a strategic sale in three years. You may also consider a partner buyout. Use a professional business valuation to establish a fair price for their shares today, allowing them to cash out while you retain the upside of the three-year optimization runway. Whatever path you choose, resolve it privately. Do not let your internal disputes spill into your leadership team or your negotiations with buyers. A unified front and a clear, documented succession plan are critical to protecting your valuation and ensuring a clean exit.

Category: Exit Planning

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