Writing
The Question I Ask Founders 12 Months Before They Sell
You Allocated Every Dollar. That's Why You'll Lose Half.
You allocated every dollar but didn't make a plan.
A question I've started asking founders in the year before they sell…
How much money have you pre-committed to not deploying in your first year post-exit?
Most of them look at me like the question doesn't make sense. They've thought hard about what to do with the proceeds. Wealth manager intro. Real estate allocation. Maybe a fund. The plan is full of placements.
What's missing is the part of the plan that's deliberately un-placed.
The founders I've seen thrive in the second curve all did some version of the same thing before the deal closed. They carved out a meaningful slice of the proceeds, not a number that mattered to them financially, but one that mattered behaviorally and pre-committed to letting it sit for the first year.
No angel checks. No fund commitments. No deployment.
Not because doing nothing is virtuous. Because the worst decisions in the second curve get made in the first six months, when the disorientation feels like a problem to solve.
The capital is the lever; pre-committing to not using it is the constraint that protects you from your own first-year instincts.
If your post-exit plan has a percentage allocated to every category of useful thing, you don't have a plan. You have a deployment schedule.
— Roland
Roland’s Riff
I won’t give you an exact valuation upfront.
Most advisors will, that should concern you.
Until someone actually gets inside your business, any number is just a guess dressed up as confidence.
Real value isn’t found on the surface, it’s uncovered through process, context, and what’s actually possible beyond the obvious.
The difference isn’t in the promise. It’s in what gets discovered along the way.
Want to see how real value actually gets uncovered? Watch the video below.
[
View more on Instagram
Add a comment...
Common questions
- Why does allocating every dollar hurt you at exit?
- Because a business with no slack has no optionality, and buyers pay for optionality. When every dollar is committed, you cannot absorb a shock, walk from a bad term, or prove the business runs with room to spare. That tightness shows up as risk and a lower price.
- What should I do 12 months before selling?
- Build slack and proof into the business before you need them. Loosen the places where every dollar and every decision runs through you, so a buyer sees a company with room to breathe. The work that protects your price happens a year out, not in the final weeks.
First published in Off the Org Chart.
Get the newsletter