How To Sell A Business For $10M+

SUMMARY

Ryan Daniel Moran, who sold his business for $16 million but left millions untapped, shares five strategies to maximize business sale value, emphasizing timing, terms, preparation, buyer selection, and independence.

STATEMENTS

• Sell your business when it's thriving, not under stress, to maximize value and avoid settling for suboptimal offers.
• Consider selling if you've reached the limits of your skills or if the proceeds would transform your life significantly.
• Borrowing against a profitable business provides tax-free cash while retaining ownership and control.
• Hiring a CEO with experience can scale the business beyond your expertise, often for less cost than expected with equity incentives.
• Set upfront terms including minimum all-cash price, close date, deal structure, post-close role, and sale type to avoid renegotiation losses during due diligence.
• A stock sale qualifies for a $15 million tax-free exemption under the qualified small business rule if owned for at least five years, unlike asset sales with 28% capital gains tax.
• Prepare clean third-party reviewed financials, a three-year vision with product roadmap, and a pitch deck with growth plans to emotionally excite buyers and justify higher valuations.
• Business valuation extends beyond current profits times a multiple; it includes future vision and emotional appeal to drive premium offers.
• Treat the sale like dating: vet multiple buyers for strategic fit, industry experience, and long-term growth plans to secure better deals and potential second exits.
• Examples like Unilever's acquisitions show brands can fetch massive premiums from synergistic buyers with distribution and teams to amplify value.
• Remove yourself from daily operations 6-12 months before sale by building teams, simplifying processes, and focusing on profitable areas to eliminate founder's risk and boost valuation.

IDEAS

• Timing a sale during peak performance isn't intuitive but prevents desperation-driven undervaluation, potentially adding millions over waiting periods.
• Fear-driven sales from economic worries or AI threats are common pitfalls, yet alternatives like asset-backed loans offer security without relinquishing control.
• Upfront terms act as a negotiation shield, turning due diligence from a vulnerability into a structured process that protects seller leverage.
• Emotional psychology trumps pure financials; buyers pay premiums when visions of future growth spark excitement and alignment with their portfolios.
• Strategic buyer selection can multiply value exponentially, as seen in conglomerate acquisitions where synergies turn modest brands into billion-dollar assets.
• Imitating private equity tactics—borrowing against equity and hiring external CEOs—allows owners to self-scale for bigger future paydays.
• Founder's risk isn't abstract; it can deduct a full year's profit from valuation, making pre-sale independence a high-ROI investment.
• Stock vs. asset sales hinge on tax strategy, where knowing exemptions flips a deal from taxable burden to windfall.
• Preparing pro-level documents like pitch decks transforms novices into credible sellers, signaling momentum that buyers crave.
• Long-term buyer planning enables "second bites" at exits, where retained equity appreciates under expert management for outsized returns.

INSIGHTS

• Optimal sales timing aligns personal skill limits with life-changing financial thresholds, ensuring proceeds fund freedom rather than react to fear.
• Pre-defining deal parameters empowers sellers to walk from red flags, preserving value against buyer opportunism in prolonged processes.
• Valuation psychology reveals that future-oriented narratives evoke buyer enthusiasm, elevating offers beyond static multiples.
• Buyer compatibility determines not just initial payouts but equity growth potential, turning sales into ongoing wealth multipliers.
• Self-removal via team-building mitigates founder's risk, proving business viability and unlocking higher multiples independently.
• Tax-aware structures like stock sales with exemptions underscore proactive planning as a silent multiplier of net proceeds.

QUOTES

• "The best time to sell your business is when things are good, not when things are stressful."
• "If you prepare these three documents in advance, then the buyer gets a complete picture of what the business looks like today, but they also get a peak into the future of the business and the momentum that it already has into that future."
• "Buyers are human beings and human beings are controlled by psychology and psychology is controlled by emotions. And when they get excited, they are more likely to pay you the most money for your business."
• "The biggest factor in selling anything is who the buyer is... who you sell the business to can be a multi-million dollar difference in how much money you put into your bank account."
• "No one wants to buy your crappy job. If you run a business and the whole business depends on you running it, then the minute you step away, the business is worthless."

HABITS

• Regularly build industry connections by attending conferences, networking groups, and emailing executives to identify potential buyers early.
• Maintain clean, third-party reviewed financials ongoing to ensure transparency and readiness for valuation discussions.
• Develop a written three-year vision and product roadmap as part of strategic planning to highlight growth potential.
• Hire experienced leaders with equity incentives when scaling, using business profits to delegate beyond personal expertise.
• Simplify operations 6-12 months pre-sale by cutting unprofitable projects and investing in systems to reduce founder dependency.

FACTS

• Businesses owned for at least five years qualify for a $15 million tax-free exemption on stock sales under the qualified small business rule.
• Unilever acquired Native Deodorant for $100 million, On for $300 million, Nutrafol for $1.2 billion, and Dr. Squatch for $1.5 billion, often exceeding surface valuations due to synergies.
• Founder's risk can reduce business value by a full multiple point, equivalent to one year's profit.
• Borrowing against business assets yields tax-free funds, similar to a home equity line of credit.
• Private equity buyers often use bank debt for acquisitions and hire CEOs, a model owners can replicate for self-growth.

REFERENCES

• Unilever (conglomerate acquiring brands like Native Deodorant, On, Nutrafol, Dr. Squatch).
• Capitalism.com (platform for building million-dollar brands and exits).
• Private equity group in Dallas (buyer of Moran's $16M business).
• Private equity group in Austin, Texas (facilitated friend's $25M to $100M+ exits).
• Broker services for shopping deals to buyers.

HOW TO APPLY

• Assess your business's health: Sell only when revenue and profits are strong, ideally after hitting personal skill limits or life-changing payout thresholds, waiting 6-12 months if needed to enhance metrics.
• Draft upfront terms document: Outline minimum all-cash price, desired close date within months, deal structure avoiding excessive earnouts, post-sale involvement, and preference for stock sale to leverage tax exemptions.
• Prepare seller documents: Compile third-party reviewed financials, a detailed three-year vision with product roadmap, and a pitch deck covering growth strategies, hires, and untapped ideas to excite buyers.
• Vet buyers strategically: Network in your industry via conferences and emails; date multiple suitors like Unilever-style acquirers with synergies, evaluating their growth plans and track record to ensure second-exit potential.
• Build independence: 6-12 months pre-sale, hire team members, simplify operations by axing low-profit projects, and invest in systems to demonstrate the business runs without you, minimizing founder's risk.

ONE-SENTENCE TAKEAWAY

Maximize business sale value by selling strategically, setting terms firm, preparing emotionally, choosing buyers wisely, and ensuring operational independence.

RECOMMENDATIONS

• Borrow against assets for tax-free liquidity if the business is growing, retaining control over future upside.
• Always prioritize stock sales for tax advantages, negotiating them upfront to avoid 28% capital gains hits.
• Cultivate buyer relationships early through industry networking to uncover premium acquirers with synergies.
• Invest in pre-sale team-building to eliminate dependency, potentially adding a full profit multiple to valuation.
• Frame pitches with future visions to leverage buyer psychology for excited, higher-bid offers.

MEMO

Ryan Daniel Moran still winces at the $16 million he pocketed from selling his e-commerce empire—a windfall that reshaped his life, yet one that could have swelled by $3 million to $5 million with sharper strategy. As the founder of Capitalism.com, Moran now guides entrepreneurs toward eight-figure exits, drawing from hard-won lessons in a landscape where timing and preparation spell the difference between settling and soaring. His mantra: Sell when the sails are full, not frayed by storms of doubt or economic jitters.

The pitfalls are stark, Moran explains. Too many founders unload in panic—fearing AI disruptions or market shifts—snatching whatever check dangles, often leaving fortunes untapped. Instead, he urges holding course if growth persists: Borrow tax-free against the asset, much like a home equity line, to secure millions while steering the ship. Or hire a battle-tested CEO, sweetened with equity, to propel beyond your expertise. Moran regrets not exploring these before his Dallas private equity deal, where he mirrored their playbook without reaping the rewards.

Preparation is power, starting with ironclad terms etched before negotiations ignite. Moran's crew faltered by letting brokers hawk the deal indiscriminately, yielding to buyer whims that slashed $2 million and dragged closure six months. Today, he advocates a crisp one- to two-page manifesto: Minimum all-cash sum, swift close date, earnout limits, post-sale role, and—crucially—stock sale status to unlock a $15 million tax haven for long-held ventures. This blueprint wards off due diligence ambushes, positioning sellers as architects, not supplicants.

Emotion fuels the fire, Moran insists, beyond cold multiples of profit. Buyers crave the thrill of untapped horizons, so arm yourself with pristine financials, a three-year vision roadmap, and a pitch deck brimming with hires and innovations. These tools paint not just today's ledger but tomorrow's empire, stirring the human pulse in boardrooms. Valuation, he reveals, hinges on this alchemy: Excitement begets premiums, turning routine sales into rapturous bids.

Yet the true pivot lies in courtship, not conquest. Treat buyers like dates, Moran advises—swipe past the flashy first offer for symbiotic matches, akin to Unilever's savvy grabs of Native Deodorant at $100 million or Dr. Squatch at $1.5 billion, where distribution muscle minted gold from modest brands. His own haste birthed a toxic tie-up; a friend's Austin saga, however, yielded $25 million upfront and $100 million later through retained shares under expert stewardship. Finally, exorcise the founder ghost 6-12 months out: Streamline, staff up, and prove viability sans you, erasing the "founder's risk" that docks a year's earnings. In this blueprint, exits become not endpoints, but launches into unbound futures.