jmsktm/exit

ID8EXIT - Exit Engine

Purpose

Position your product for a successful exit. Whether acquisition, acqui-hire, or strategic sale—preparation is everything.

Philosophy: Exits are not events, they're outcomes. Build acquirable from day one. The best exits happen when you're not desperate.

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When to Use

• User is considering exit options
• User receives acquisition interest
• User wants to maximize company value
• User needs help with due diligence preparation
• User asks "how do I sell my company?"
• Project is in OPERATING state and mature

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Commands

/exit <project-slug>

Run full exit readiness assessment.

Process:

1. ASSESS - Evaluate current exit-readiness
2. POSITION - Optimize for acquirer interest
3. VALUE - Understand worth and multiples
4. PREPARE - Build data room and materials
5. NEGOTIATE - Structure optimal deal
6. EXECUTE - Close the transaction

/exit assess

Evaluate exit readiness and identify gaps.

/exit value

Estimate valuation range and comparable exits.

/exit dataroom

Create due diligence documentation checklist.

/exit memo

Draft internal exit strategy memo.

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Exit Philosophy

Solo Builder Exit Reality

| Exit Type | Realistic For | Typical Range | |-----------|---------------|---------------| | Acqui-hire | Any stage | $50K-500K | | Asset sale | With users/revenue | $50K-1M | | Strategic acquisition | PMF + growth | $500K-10M | | Financial acquisition | Scale | $5M+ |

Exit Timing

Too early signals:

• No product-market fit
• No sustainable revenue
• Still figuring out the model
• Desperate for cash

Right time signals:

• Clear PMF demonstrated
• Sustainable growth
• You want to exit
• Strategic interest exists

Warning signs to exit:

• Losing interest/energy
• Market shrinking
• Better opportunities elsewhere
• Burnout incoming

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Process Detail

Phase 1: ASSESS

Exit readiness scorecard:

| Factor | Score (1-5) | Notes | |--------|-------------|-------| | Product-Market Fit | | Evidence of PMF | | Revenue/Growth | | MRR, growth rate | | User Base | | Size, engagement | | Technology | | Clean, documented | | Team | | Dependencies | | Legal | | Clean cap table, IP | | Operations | | Systematized | | Market Position | | Competitive moat |

Scoring:

• 35-40: Ready for premium exit
• 25-34: Ready with some gaps
• 15-24: Significant prep needed
• <15: Not ready

Phase 2: POSITION

Positioning for acquirers:

| Acquirer Type | What They Want | How to Position | |---------------|----------------|-----------------| | Strategic (competitor) | Market share, customers | User base, retention | | Strategic (adjacent) | New capability | Technology, team | | Financial (PE/VC) | Returns | Growth, margins | | Individual buyer | Lifestyle business | Cash flow, low effort |

Positioning activities:

• Clean up technical debt
• Document everything
• Show growth trajectory
• Highlight strategic value
• Build relationships early

Phase 3: VALUE

Valuation methods:

| Method | Formula | Best For | |--------|---------|----------| | Revenue multiple | ARR × Multiple | SaaS with growth | | Profit multiple | EBITDA × Multiple | Profitable businesses | | User-based | Users × Value/User | Pre-revenue, engaged users | | Asset value | Assets - Liabilities | Distressed/no growth | | Comparable | What similar sold for | Market validation |

SaaS multiples (solo builder scale):

| Growth Rate | Typical Multiple | |-------------|------------------| | <10% YoY | 2-3x ARR | | 10-30% YoY | 3-5x ARR | | 30-50% YoY | 5-8x ARR | | >50% YoY | 8-12x ARR |

Adjustments:

• +1-2x for strong retention (>90% NRR)
• +1-2x for strategic fit
• -1-2x for high churn
• -1-2x for concentration risk

Phase 4: PREPARE

Data room essentials:

| Category | Documents | |----------|-----------| | Corporate | Formation docs, cap table, contracts | | Financial | P&L, balance sheet, projections | | Product | Tech docs, architecture, roadmap | | Customers | Metrics, top accounts, churn analysis | | Team | Org chart, key person dependencies | | Legal | IP assignments, material agreements |

Preparation timeline:

| Timeframe | Actions | |-----------|---------| | 12 months out | Clean up financials, document processes | | 6 months out | Build data room, fix legal issues | | 3 months out | Prepare materials, identify buyers | | 1 month out | Finalize data room, practice pitch |

Phase 5: NEGOTIATE

Deal structure components:

| Component | Description | Typical Range | |-----------|-------------|---------------| | Cash at close | Immediate payment | 50-80% | | Earnout | Performance-based | 10-30% | | Equity | Stock in acquirer | 0-20% | | Escrow | Held for indemnity | 10-20% | | Employment | Retention package | Varies |

Negotiation priorities:

1. Total consideration (valuation)
2. Cash vs equity split
3. Earnout terms and achievability
4. Escrow terms and release
5. Employment terms
6. Reps and warranties scope

Phase 6: EXECUTE

Closing process:

LOI SIGNED
    ↓
Due diligence (30-60 days)
    ↓
Definitive agreement negotiation
    ↓
Final document execution
    ↓
Closing conditions satisfied
    ↓
CLOSE

Post-close:

• Transition assistance
• Earnout execution
• Team integration
• Customer communication

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Framework References

Exit Options

frameworks/exit-options.md - Types of exits and fit

Valuation

frameworks/valuation.md - Methods and multiples

Due Diligence

frameworks/due-diligence.md - What buyers want

Deal Structure

frameworks/deal-structure.md - Terms and negotiation

Acquisition Prep

frameworks/acquisition-prep.md - 12-month prep plan

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Output Templates

Data Room Checklist

templates/data-room-checklist.md - Due diligence documents

Exit Memo

templates/exit-memo.md - Internal exit strategy

Term Sheet Review

templates/term-sheet-review.md - Analyzing offers

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Tool Integration

MCPs

Perplexity:

• Research comparable exits
• Find potential acquirers
• Market research

GitHub:

• Clean up repository
• Document codebase
• Prepare for technical DD

Subagents

strategic-think-tank:

• Exit strategy analysis
• Negotiation strategy
• Deal structure optimization

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Handoff

After completing exit preparation:

1. Save outputs:

   • Exit memo → docs/EXIT_MEMO.md
   • Data room → docs/data-room/

2. Log to tracker:

   /tracker log {project-slug} "EXIT: Preparation complete. Valuation range: ${X}-${Y}. Ready for market."
   

3. Update state:

   /tracker update {project-slug} EXITING
   

4. On successful exit:

   /tracker update {project-slug} EXITED
   

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Exit Readiness Quick Check

Minimum Requirements

• [ ] 12+ months of financial records
• [ ] Clean cap table
• [ ] IP properly assigned
• [ ] No legal issues
• [ ] Customer contracts in order
• [ ] Key metrics documented
• [ ] Code is documented and clean
• [ ] Team dependencies identified

Red Flags for Buyers

| Red Flag | Impact | Fix | |----------|--------|-----| | Messy cap table | Deal complexity | Clean up early | | No financial records | Trust issues | Start tracking now | | Single customer >50% | Risk | Diversify | | Key person dependency | Risk | Document, cross-train | | IP not assigned | Deal blocker | Fix immediately | | Material litigation | Deal killer | Resolve before |

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Anti-Patterns

| Anti-Pattern | Why Bad | Do Instead | |--------------|---------|------------| | Waiting until desperate | Weak negotiating position | Plan 12+ months ahead | | Hiding problems | Will surface in DD | Disclose upfront | | Only one buyer | No leverage | Create competition | | Focusing only on price | Miss bad terms | Evaluate full package | | No advisor | Make mistakes | Get help on first exit | | Neglecting business during sale | Value erodes | Keep running hard |

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Quality Checks

Before starting exit process:

• [ ] Exit readiness score >25
• [ ] Financial records clean and current
• [ ] Legal issues resolved
• [ ] Data room 80%+ complete
• [ ] Valuation expectations realistic
• [ ] Exit timeline defined
• [ ] Key decisions documented