Marina Khidekel | It's never too early to think about a future exit. Here are six ways to prepare your startup for a sale.

Selling your business can feel like a topic for the distant future when you're busy pouring all your energy into your startup. But when it happens, many founders discover that selling isn’t the clean ending they’d imagined.

- Marina Khidekel

Prior to launching her business, Hugimals World, Marina Khidekel served as chief content officer at Thrive Global and as a deputy editor at Women's Health and Cosmopolitan. Today, she leads Hugimals World as CEO and writes about founder life for Inc.

I started thinking about this recently while considering raising an angel round for Hugimals World, my three-year-old brand that makes weighted plushies and pillows to ease stress and anxiety in adults and kids. I ultimately decided to stay bootstrapped, but friends and advisers all said investors would ask the same question: Who might acquire you?

Hugimals gets weekly inquiries from potential acquirers, but none has felt like the right fit. Still, I wanted to hear from founders who've sold. What did they wish they’d known before signing?

Get Every Detail in Writing

Carrie Kerpen sold her New York City-based social media agency, Likeable Media, for eight figures in 2021, and went on to found the Whisper Group, an exit-readiness advisory for women-owned businesses. She says founders underestimate how much weight the letter of intent to purchase carries.

“An LOI does not mean you have a deal—50 percent of deals never make it past that stage,” she says. “A misconception is that an LOI is a starting point for negotiations, when in fact it should actually contain every detail you want in the deal before you move into legal documents.”

Kerpen says this is the most important time to negotiate—LOIs are typically revised nine or 10 times before signing, she says, and it’s harder to get changes once they’re signed. “Make sure you understand exactly how you'll be paid and when,” she notes. “If payment is tied to performance post-acquisition, make sure you have the ability to control [what] they are measuring you on.”