by Oliver Wreford, EdTech Portfolio Manager, Banyan Software
Selling your business is one of the biggest and most agonizing decisions you’ll make as a founder. A well-executed transaction could be the most important financial event of your life, not to mention the implications on your career, your relationships with your team, and the legacy of the company you spent countless hours building. The process is also costly and time-consuming and can become a distraction from the daily operations of your business.
In my experience working on many acquisitions, currently in EdTech at Banyan Software, I have seen deals that worked well for the founders and others that didn’t. The difference usually lies in how prepared the founder is before the process begins.
Founders who succeed in a sales process share one common trait: They have done their homework in a few key areas of their business. I’ve outlined my top five below.
1. Set clear goals before you start.
Know what you want to accomplish by selling your business. Define a set of clear, prioritized objectives for the sales process. These goals may include maximizing the purchase price, reducing risk to your personal balance sheet, finding a buyer who can accelerate growth, or preserving the culture you’ve built with your team and clients. These goals are not always compatible, and in my experience, founders who engage in a process with clear priorities tend to find the right buyer rather than defaulting to the highest offer.
2. Present a compelling pitch and growth story.
Articulate with confidence an elevator pitch it explains why your business is a valuable and defensible business. Next, be prepared to detail your company’s value propositions and key differentiators, the market segments you serve, and your ideal customer profiles. Simply put: why do customers choose you, why do they stay, and where are the biggest growth opportunities? The founders I’ve seen succeed in a sales process can tell this story with conviction and specificity, generating real excitement among potential buyers.
3. Understand the risks and opportunities of AI.
AI wouldn’t have made my list six months ago. Today, it represents perhaps the most significant threat and opportunity set facing a vertical SaaS company. In every conversation you have with a buyer, they will want to understand how you are using AI to improve operations, accelerate product development, and deliver more value to customers, all in measurable terms. They’ll also want to know that you’ve seriously thought about the risks: competitive disruption, cost of execution, and how AI can change what your customers expect from you. Founders who can speak fluently to both stand out. Founders who cannot raise questions about how the company will compete in the future.
4. Know your numbers, your P&L and your sales pipeline.
Be prepared to explain in detail how your business makes money and how it spends, because buyers will dig deeper into each key metric and underlying detail. Understand KPIs such as EBITDA, net revenue, GAAP versus cash accruals, new logo pipeline, and net revenue retention because you’ll need to speak to each with authority, supporting your company’s financial projections with data. We buyers will also closely monitor your execution against projections during the sales process itself. Knowing your numbers and meeting your goals before closing will put you in a great position to get a fair and firm valuation.
5. Understand the deal structure and buyer type, not just the overall price.
The terms of a transaction and the buyer’s operating model will shape your life after the deal closes, sometimes more than the price itself. I’ve seen founders focus entirely on valuation and end up in a structure that didn’t serve them or their team well. Understand how a buyer approaches running the business post-acquisition, where they typically invest, and where they cut costs. Financially, consider whether earnout targets are realistic or structured so that they are unlikely to pay off. Consider how their strategic vision aligns with yours. There are different types of buyers: permanent capital, growth-oriented PE and strategic acquirers. Everyone has fundamentally different answers to these questions. Banyan Software, for example, acquires companies with the intention of retaining them permanently, which shapes everything from how we approach leadership transitions to where we invest after closing. Understanding which model fits your goals is as important as understanding valuation.
The founders I’ve seen go through a sales process are well prepared from the start. They are clear on their objectives, have a convincing growth track record and have a strong handle on their numbers. This preparation allows them to find the right buyer and close a transaction faster, with less stress and while preserving the legacy of their business.
Oliver Wreford is the portfolio manager of Banyan Software’s educational software business. With deep expertise in technology solutions for K-12 education and experience growing some of the biggest names in the industry, such as PowerSchool and SchoolMint, Oliver delivers strategic insights and practical expertise in education technology. Connect with Oliver on LinkedIn.
