A Durable Measure of Success
4 min read
After 10 years of fending off inbound purchase offers from investors, the Founder of an $80MM industrial services company relented.
At 51 years old, she hired the industry-focused IB team she had known for years. She engaged in the throes of pre-diligence and deal process. Data preparation, CIM creation, investor bids, management presentations, SPA negotiation, and eventually closing.
The winning investor valued her company at $72 million, merging it into an adjacent business they already owned. The Founder joined the combined-company’s board for 2 years, then rolled off.
Ultimately, she recaptured 55+ hours/week of time and achieved life-changing wealth.
Over the next 4 years, she bought a farm, a plane, and several houses. Then, she got a divorce, sold the farm, and started looking for businesses to buy.
We caught up last year, and I asked a question that has become central to Relay’s purpose.
“It’s been 6 years. If you knew then what you know now, would you do it again?”
The 57-year-old had a new perspective on her decisions. While her deal was a success by most commercial measures, she regretted the absence of purpose she felt after exiting her leadership of the business.
She was awash with time, but deciding how to spend her sale proceeds was not a satisfying trade for the thrill of running her company.
In hindsight, she would not have done what she did.
While stories of deal regret are everywhere, the spotlight is often shone on upfront process failures. Poor comparables set. Inexperienced bankers. Data failures. Walk-back from initial offer.
But this one is trickier.
When the transaction initially happened, the advisors succeeded against all the typical metrics. Final enterprise value was better than expected. The sale multiple was top-of-range. And the buyer had a strong sector thesis + relevant investing experience.
But, these conventional metrics of success did nothing to prevent transaction regret. And they usually don’t.
In my early wrestling with these ideas, I did an analysis of 94 middle-market transition events I had been close to. The findings confirmed my feelings: larger companies had much more successful transitions with far fewer regrets.
Specifically, businesses with less than $20MM EBITDA were 3x as likely to regret their ownership or capital change events. Within 2 years of transition, 77% of these owners would not do what they did again.
Further analysis revealed several reasons for this, and I’ll share more later. But the most critical difference handicapping these owners early on is a lack of awareness of the options they really have.
They weren’t aware that comparable companies typically sell for more than they did.
They weren’t aware of the impacts of lender covenants on their financial decision-making.
They didn’t know how it would feel to have a boss again after 25 years as an independent entrepreneur.
No one asked them how they would spend their time after the wires were sent.
They didn’t realize how little direct experience their advisors had in their industry.
They hadn’t been told about the 6 capital alternatives that would have kept them in control.
Awareness is the best vaccine for regret.
Too often, owners make critical decisions without thorough exploration — on comparables, covenants, culture, and the futures available to them.
Relay Strategy Partners exists to address this gap. We engage early, widen the field of view, and anchor everything to an elevated vision of success: will this still feel right in two years? What about in ten?
Every decision carries risk. But given the magnitude of these decisions, every owner deserves the highest chance of durable transition success—with full awareness, unbiased support, and no pressure-driven outcomes.
True success can’t be measured at the closing dinner. It proves itself a decade later in confidence and the absence of regret.
At Relay, our role isn’t to push deals. It’s to bring clarity to complexity and help owners see the full field of options before them. When the stakes are high, we’re here to guide decisions that will still feel right a decade later.
Note: Relay Strategy Partners is a good steward of confidential data. Case studies are a composite of multiple clients and identifying details have been masked to protect confidentiality.
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