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Always run an auction to maximise your exit valuation
Executive overview
Most founders accept the first serious offer and sign an exclusive — locking out competing buyers before an auction can form. Without competing bidders, you leave millions on the table.
The number-one lever for exit valuation is always creating an auction.
Why exclusives kill your price
- Early buyers deliberately make a large opening offer to trigger an exclusive agreement
- Once you sign an exclusive, all competitive pressure disappears
- A short exclusivity window (60 days) is acceptable only if you retain a clear exit clause
- Without competition, buyers have no incentive to raise their bid
What an auction actually delivers
- Running a process across 200 potential acquirers and narrowing to two drove one deal from 7x to 25x earnings
- Even the credible option of taking the company back and continuing to run it creates competitive pressure
- Buyers must sense genuine competition — perception of alternatives is enough to move price
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