How to prepare for your exit: lessons from veteran advisor and investor, James Viggers.

A longstanding member of Cambridge Angels, James studied engineering at Trinity College, Cambridge before spending his career in investment banking in London & New York. Now an angel investor and non-executive director with his professional advisory days behind him, he is one of our resident experts on exits and exit planning.

So, James – you’ve worked on exits both as an M&A advisor and as part of a selling management team. What’s the biggest misconception founders have about exits?

There is a cliché about building companies being a marathon not a sprint. The misconception is that the exit is the finish line.

A buyer isn’t buying a moment in time – they’re paying for your company’s future. They need you to deliver not just your tech, but your team, your customers, your revenues, your trajectory. And this takes time. If earnouts are involved or if your exit path is via IPO then that delivery phase might stretch out over three years or more. Sadly, collapsing over the finish line isn’t really an option

When’s the right time to sell?

It very much depends on the company. The thoughtful, long-form answer is to ask: when might a transaction best help us achieve our mission? When would joining a bigger player genuinely help us go faster or further than we could alone? This might be never – you might be the crack team that’s going to scale your company to global domination. However, it’s often earlier than people think. You might be developing pure IP and the aim might be to exit as soon as possible. In either case, my opinion is that the best exits aren’t cash-outs, they’re springboards.

The only wrong answer on timing is to wait until you absolutely have to exit. If you are out of energy, out of cash or have no other options then you are very unlikely to get a good outcome.

If your drive to exit is financially motivated that’s fine. But you should be prepared to have grown up conversations around the management table regarding personal financial goals – a surprising number of people have a target of “more” which can be unhelpful when discussing timing!

Incidentally, trying to time a market peak is a mug’s game. Many perfectly-timed exits are just good luck. It’s better to focus on being quietly but consistently exit-ready. That way, if someone makes you an offer out of the blue – and that does happen, especially in hot sectors – you’re in a position to move. With exits, you need to be prepared before you can be opportunistic.

What actually increases valuation in an exit?

You will already be doing your best to make a success of your company. So the next answer is: preparation!

Ask yourself now – today – who your actual buyers are. Not vague categories like “big pharma” or “US fintechs”. Real names. Do they actually buy companies like yours? For decent prices? Can they afford you? Why would specifically-they buy specifically-you? Think all this through – it might impact your views on realistic exit timing and provide valuable input into your medium term strategy.

Do you know anyone at the buyers? Can you find a legitimate business reason to start building a good relationship? Can you find an excuse to have a cup of coffee at a conference or similar? You can’t start that work too early.

Then, get your house in order. I have a wish list from my days as an investment banker of “things I wish our clients had started thinking about six months before calling us”. That rumbling succession issue? That niggling worry that your IP assignment might not quite be entirely right? Non-trivial, but solvable in advance. If they come to a head in the middle of a sale process you are in real trouble. And they will come up – buyside due diligence can be pretty punishing! You will also need to give warranties around these issues on sale, and these will be much more onerous that you might be used to from previous capital raisings. It’s much easier to start early here.

A note on competitive tension. You need more than one potential buyer at the table. If you’re only talking to one firm, your negotiating leverage is basically little more than asking nicely. It can work, but you are unlikely to get the best deal.

What tends to go wrong?

This is a longer conversation! Some things are fairly obvious – leaving it too late, having only one buyer, failing to prepare. Some issues can come out of left field – a single large customer blocks a deal, it turns out a key employee never actually wanted to sell in the first place, an investor whose expectations haven’t been properly managed suddenly cuts up rough on signing day.

You shouldn’t assume that even a benign exit process will be quick or straightforward. It probably won’t be. There’s a lot of diligence and negotiation. It can help to have proper advisors – good ones are worth paying up for. Plus, it’s easy to forget to keep running the company during all this. Ironically, that’s when momentum matters most.

What should founders be doing now – even if they’re years away from selling?

The “zero-th” step is to make sure you understand what you and your team actually want from an exit. Have you discussed this recently? Are you all aligned? Are everyone’s aspirations realistic?

Then start by refreshing your exit plan and listing your likely acquirers. Build these relationships. This is partly about looking good in front of your potential buyers but also about doing your diligence on them – you will be looking for a home for your team and cultural fit can be key.

Keep your house in order: legal, tax, HR, IP. Put proper KPIs and systems in place, then hit your targets. Make sure your wider team have medium term incentive plans. Think about gently moving your company culture beyond its start-up phase – would you actually fit as part of a larger organisation?

And don’t forget to talk to your investors. Make sure expectations are aligned – not just on timelines, but on valuation and the kind of deal you’re aiming for. Misalignment here can derail everything later.

How do things typically play out after the deal closes?

The transaction is just one step. The integration is where real success (or failure) often happens.

It can be a bumpy ride. Being acquired is deeply unsettling for staff. You need a clear plan for communication, retention, and integration. If there are redundancies, they need to be handled decisively and respectfully. Again it’s slightly different for pure IP vs revenue generating businesses, but you should think about branding, customer messaging, supplier relationships. Especially if there’s an earnout involved, you want everything post-deal to go smoothly.

Any final words of advice?

Remember: it’s not a wedding, it’s a marriage.

Exits are stressful and exhausting. There will be late nights, missed forecasts, emotional flare-ups, honest mistakes and at least one moment when someone threatens to walk away. The goal isn’t just a signed SPA, it’s a successful handover and a strong future.