Most private equity exits don’t disappoint because of market timing. They disappoint because exit planning starts far too late.
In many funds, exit planning still begins 18–24 months before sale. A banker process. Some KPI clean-up. A refreshed equity story.
That’s not exit planning. That’s exit packaging.
Exit planning is not financial — it’s operational
Premium valuations are not driven by adjusted EBITDA bridges.
They are driven by:
- Scalable operating models
- Predictable cash conversion
- Repeatable growth engines
- Institutionalized management teams
- Low key-person dependency
None of this can be built in two years. There is a structural capability gap
Traditional PE deal teams excel at capital structures, valuation and negotiations and running processes
They are not designed to:
- Re-architect operating models
- Professionalize pricing, supply chains and working capital
- Build buyer-grade KPI and performance architectures
- Translate operational reality into a credible equity story
That’s not a weakness. It’s a role design mismatch. Exit planning is an operating discipline
The best exits I have seen start early and focus on:
- Defining the future buyer upfront
- De-risking that buyer’s investment thesis over multiple years
- Creating operational proof points instead of promises
- Preparing management teams to run the business through the exit
This requires deep operational experience — not just financial expertise.
Why PE firms need dedicated exit planning capability
Leading funds now:
- Embed exit readiness from day one
- Build internal operating / value creation teams
- Use external exit-planning specialists alongside deal teams
Because exit planning is not an event. It is a repeatable capability.
Start with the exit — on day one
The real question isn’t:
“How do we prepare for exit in two years?”
It’s:
“What must this business become to command a premium valuation?”
Answer that early enough, and the exit largely takes care of itself.
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