Internal vs. External Buyer: The Question No One Tells You to Ask Yourself First
When most business owners think about selling, they picture a buyer coming from the outside — a private equity firm, a strategic acquirer, a competitor who's been circling. That's the version of an exit that gets the most attention, and often the biggest headline number.
But it's not the only path. And for a lot of the founders we work with, it's not the right one.
There's a question we think every owner should answer before they ever sit down with a potential buyer — internal or external. And almost nobody asks it until they're already mid-process, which is usually too late to change course without significant cost.
The question is: what do you actually want to be true after you leave?
“The right buyer isn’t the one who offers the most money. It’s the one whose answer to ‘what happens to the people here?’ sounds like yours.”
What the two paths look like
Before we get into which path fits, it helps to understand what each one actually offers — honestly, not in the idealized version.
The external buyer path typically means a higher headline valuation. External buyers — especially private equity — are often willing to pay a premium for a business that fits their thesis, and they may offer structures like rollover equity that let you participate in future upside. The exit window is usually faster, and the liquidity event is more immediate.
The trade-off is control over what happens next. Once a PE firm or strategic buyer owns the business, they make the decisions. Some are excellent stewards of culture and team. Some are not. Your employees, your clients, your long-built reputation — their experience after the transition depends heavily on who the buyer is and what they care about.
The internal buyer path — a sale to existing leadership, a management buyout, a transition to a family member — typically means more continuity. The people who know the business are the ones running it. Client relationships stay intact. The culture you've built has a better chance of surviving.
The trade-off is usually financial. Internal buyers often don't have the capital to match an external offer outright, so the structure gets creative — seller notes, earn-outs, phased transitions. That can mean more cash over a longer period rather than a clean liquidity event. And the deal is only as good as the successor's ability to actually run the business.
Why the numbers aren't the whole story
We sat with a founder recently who had both paths on the table. On one side of the whiteboard: an external buyer offering a strong valuation, rollover equity, and a quick close. On the other: an internal team that had been with the business for years, deeply trusted, with a structure that would get him more cash at close but spread over time.
What shifted the conversation wasn't the math. It was when he started talking about his clients — relationships he'd built over 15 years — and his team, people he'd invested in, mentored, and felt genuinely responsible for. He wanted to know they'd be okay. He wanted the business to still feel like itself after he was gone.
When we mapped both paths against what he actually cared about, the internal route won — not because it was the better financial deal, but because it was the deal he could live with. We built his roadmap around strengthening that path first, while keeping the external option in view if circumstances changed.
That's the work. Not choosing between two numbers — choosing between two futures and being honest about which one you actually want.
The question buyers reveal themselves with
Here's something we've found to be almost universally true: the right buyer, internal or external, will answer one question in a way that aligns with your values. And the wrong buyer will answer it in a way that tells you everything you need to know.
The question is some version of: what happens to the people here?
We worked with a founder who was deep in conversations with a PE firm when she asked exactly that. The buyer's response — delivered with a kind of surprised bemusement — was: "You actually care about what happens to your people after you leave?"
That was the answer. Not because caring about your team is a dealbreaker for every external buyer. It isn't. But because the way that buyer framed the question told her exactly where people ranked in their model.
She walked away. We helped her find a path that reflected what mattered to her. She didn't regret it.
The right buyer isn't the one who offers the most money. It's the one whose answer to "what happens to the people here?" sounds like yours.
How to figure out which path is right for you
The honest answer is that you can't know until you've done a few things:
Get clear on your non-negotiables. Before you talk to any buyer, know what you're not willing to compromise on — whether that's client continuity, employee retention, your own involvement post-sale, or something else entirely. Those non-negotiables are your filter.
Model both paths financially. Not just the headline number — the full structure. What's cash at close versus what's contingent? What's the tax treatment? What happens if the business underperforms post-sale under an earn-out structure?
Assess whether the internal path is actually viable. Not every business has a successor ready. Internal transitions require the right person, a realistic financing structure, and usually 12-24 months of preparation. If those pieces aren't in place, the path may not be available to you — and that's important to know early.
Talk to someone before you're under pressure. This is the piece most owners skip. They start the conversation with advisors after an offer is already on the table, when the framing is reactive rather than strategic. The owners who navigate this well almost always started thinking about it earlier than felt necessary.
If you're not sure which path fits — or whether either is realistic given where your business is today — our Exit Exploration Workshop is designed for exactly this moment. We model both paths together, map them against what you actually want, and build a roadmap that reflects your values — not just your valuation.
Ripples Edge Advisors is an exit readiness and growth advisory firm based in Chicago. We work with small and mid-sized business owners who want to build something transferable — whether they sell it, pass it on, or simply run it better. Learn more at ripplesedgeadvisors.com.
The Halftime Adjustment: A Framework for Mid-Year Business Check-Ins That Actually Change Something
There's a version of a mid-year business review that most founders have done at least once.
You pull the numbers. You compare them to the plan. You note where you're ahead, acknowledge where you're behind, write a few action items in a document that will be opened twice before December. And then you go back to running the business.
That's not a halftime adjustment. That's scorekeeping.
If you played competitive sports, you know what an actual halftime looks like. It's not a recap. It's not a debrief. It's a coach who has been watching the whole game from a different vantage point, who has identified the two or three things that are actually going wrong beneath the surface of the score, and who is about to tell you — clearly, specifically, and without a lot of ceremony — what to do differently in the second half.
That's the review your business deserves at midyear. Here's how to run it.
“A halftime adjustment isn’t about tearing apart the game plan. It’s about making one or two specific changes while you still have a second half left to play.”
Step 1: Get honest about the actual score
Not the revenue number. The actual score.
Revenue can be up while your best client is quietly shopping alternatives. Revenue can be flat while you've quietly built a team that could triple it next year. The number on the scoreboard is context — it's not the whole story.
The questions to ask at halftime:
Where did we win in the first half — and do we know why we won?
Where did we lose — and is the story we're telling about why actually true?
What broke that we patched instead of fixed?
What are we not talking about because it's uncomfortable?
That last one is the most important. In sports, the best halftime adjustments address the thing the team has been dancing around — the matchup problem, the rotational gap, the communication breakdown. In business, it's usually the thing everyone knows is a problem but nobody has said directly.
Name it. That's step one.
Step 2: Separate the score from the game plan
Here's a mistake even smart founders make: they see a bad number and immediately start changing everything. New strategy, new priorities, new energy — usually in about forty-eight hours.
That's panic, not adjustment.
A true halftime adjustment is surgical. It doesn't mean the whole game plan was wrong. It means something specific isn't working, and you're going to change that specific thing while staying committed to the broader strategy.
Ask: is the gap a strategy problem or an execution problem?
A strategy problem means you were running the wrong play — the market shifted, the offer isn't landing, the channel you bet on isn't delivering. That might require a meaningful pivot.
An execution problem means the play was right but the execution broke down — the process wasn't followed, the hire wasn't ready, the system didn't get built. That requires a targeted fix, not a new strategy.
Treating an execution problem like a strategy problem is one of the most expensive mistakes founders make at midyear.
Step 3: Pick one adjustment — not five
The best halftime adjustments are specific and few.
You cannot fix everything in the second half. You can fix one thing well, and let that change compound. Coaches who come in with twelve adjustments at halftime send their teams back out confused and tentative. Coaches who come in with one clear play — "we're going to stop doing this, we're going to start doing that" — give their teams something to execute against.
For your business, that might look like:
One hire you've been avoiding that would change the capacity of your whole team
One process you'll finally document instead of carrying in your head
One client relationship that needs a real conversation before it becomes a problem
One thing you're still doing that someone else on your team should own
One. Not five. Pick the one that, if you got it right, would make everything else easier.
Step 4: Set the second-half goal — not the year-end goal
Year-end goals are too far away to create urgency in July. What you need is a second-half goal — something specific and achievable in the next 90 to 120 days that tells you whether the adjustment is working.
In sports terms: you're not trying to win the championship at halftime. You're trying to win the third quarter.
A good second-half goal is concrete enough that you'll know in October whether you hit it. Not "improve our sales process" — "close two deals using the new sales framework by the end of Q3." Not "build the team" — "have the new operations hire onboarded and running their own accounts by October 1."
Specific. Time-bound. Owned by one person.
The vantage point question
Here's the thing about halftime adjustments in sports: the coach can make them because they were watching the game from a different vantage point than the players. They saw the patterns the players couldn't see while they were in it.
That's the hardest part of being a founder. You're almost always in it. And being in it makes it genuinely difficult to see what's actually going on.
The most useful thing you can do at midyear — beyond the framework above — is find someone who can watch your game from the outside and tell you what they see. A peer, an advisor, a partner who isn't inside your daily operations.
Not to validate your instincts. To challenge them.
A halftime adjustment isn't about tearing apart the game plan. It's about making one or two specific changes while you still have a second half left to play.
If you'd like a thought partner for your mid-year check-in — someone who will ask the uncomfortable questions and help you identify the one adjustment worth making — reach out here. It's one of the most useful conversations we have with founders, and it doesn't require a long engagement to be worth the time.
Alex Seydel is the co-founder of Ripples Edge Advisors, an exit readiness and growth advisory firm. She is a former competitive Soccer player and has spent her career helping founders build businesses that are healthy and transferable assets.
Why Waiting Until You're Ready to Sell Is the Worst Time to Start Exit Planning
There's a version of this conversation that happens all the time.
A business owner gets an unexpected offer. Or a health scare. Or a key employee puts in their notice. Suddenly, the exit they'd been putting off for "someday" is no longer someday — it's now. And now, it turns out, is a terrible time to start.
Not because exits are impossible to navigate under pressure. Some owners pull it off. But the ones who do are almost always leaving something on the table — valuation, terms, legacy, peace of mind — because the work that moves those things takes time. Time they didn't give themselves.
“The best time to start exit planning was three years ago. The second best time is right now — while you still have time to do something with what you learn.”
What changes when you start early
Exit planning done three to five years out isn't about getting ready to sell. It's about building optionality — so that when a moment arrives, whether you invited it or not, you have the information and the leverage to make a good decision.
Here's what actually changes when owners start early:
You learn where the gaps are while you still have time to close them. An Exit Readiness Assessment isn't a grade. It's a map. It shows you exactly where a buyer will push back, where diligence will slow down, and where you're leaving value on the table — with enough runway to do something about it.
You build the team and systems that make the business transferable. This is not a six-month project. Getting a leadership bench in place, documenting processes, reducing owner dependence, cleaning up the financials — these things take 18 months at minimum to do right. Owners who wait until they're "ready" consistently find themselves rushing work that should have been deliberate.
You get to choose your buyer instead of taking what's available. When you're not under pressure to sell, you can be selective. You can explore an internal transition, take time to find a strategic buyer who shares your values, or wait for market conditions that favor sellers. Urgency is the enemy of good terms.
You have time to figure out what you actually want. This is the piece that surprises people most. A lot of founders haven't thought carefully about what they want their life to look like after the business — and it turns out that question shapes everything: the timeline, the structure, the type of buyer, the non-negotiables. Figuring that out under pressure rarely goes well.
The most common "I wish I had" we hear
We've worked with a lot of founders who came to us after a difficult exit, or after nearly completing one that didn't feel right. The regret we hear most often isn't about the price.
It's: I wish I had listened to my gut about the buyer. It's: I wish I had built the team before I needed to. It's: I wish I had started this conversation three years ago.
Almost nobody says they wish they had waited longer. And almost nobody says the process went smoothly when they started it after the pressure was already on.
The timing question nobody asks
Here's the question we think every business owner should be sitting with, regardless of where they are in their journey:
If the right offer came across your desk tomorrow, would your business be ready to support it?
Not "would you be emotionally ready to say yes" — that's a different question for a different day. But operationally, financially, organizationally: could your business hold up to serious scrutiny? Could a buyer step in and run it without you in the room?
For most owners, the honest answer is not yet. And that's fine — as long as "not yet" turns into a plan.
What early looks like in practice
Starting early doesn't mean obsessing over your exit for the next five years. It means taking a clear-eyed look at where your business stands, identifying the two or three things that would move the needle most on transferable value, and making those part of how you run the business going forward.
For one founder we worked with, it was getting himself out of the sales process and hiring someone who could own it. For another, it was cleaning up three years of blurred personal and business expenses before they became a diligence problem. For another, it was having an honest conversation with her leadership team about succession — a conversation she'd been avoiding for two years.
None of it was dramatic. All of it compounded.
The best time to start exit planning was three years ago. The second best time is right now — while you still have time to do something with what you learn.
If you're not sure where to start, our Exit Readiness Assessment is a good first step. It's designed for owners who aren't planning to sell anytime soon — and want an honest picture of where they stand while they still have options.
Ripples Edge Advisors is an exit readiness and growth advisory firm based in Chicago. We work with small and mid-sized business owners who want to build something transferable — whether they sell it, pass it on, or simply run it better. Learn more at ripplesedgeadvisors.com.
Who's actually in your corner?
The Ripple Effect: July
Alright friends -
July has me thinking about teams. Maybe it's watching all the World Cup games, maybe it's the WNBA season hitting its stride, maybe it's just that this time of year tends to bring people together in rooms that matter. But the question that keeps surfacing in our work lately is a deceptively simple one:
When the moment counts, who is actually in your corner?
Not at the table. In your corner.
This month, we're digging into what it really means to be owner-centered in a business transition process – and why having the right people advocating for you, not just the deal, changes everything.
Read on to see how advocacy makes all the difference.
Ripples in Action
Early in our firm's journey, Alex got a call from a business owner who was in the final stages of selling his company. It had taken years to get there. The advisors were assembled, the buyer was identified, the deal was nearly done.
“He was lying on the floor of his office.”
Not in relief. Not in exhaustion from the sprint to the finish line. He was on the floor because the process had gone so sideways – so far from what he had imagined for himself and his business – that he couldn't stand up. The deal was closing, and it felt like a loss.
That image has stayed with us. Because here's the thing: in most exit transactions, there are a lot of people at the table. There's the M&A advisor working on commission, the attorneys on both sides protecting their respective clients, the buyer's team running diligence designed to find reasons to lower the price, the accountants managing the tax exposure: everyone is doing their job. Everyone has a seat.
“But who, in all of that, is asking what the owner actually wants?”
Exit Essentials
Build Your All-Star Roster
Here's an exercise worth doing before you're anywhere close to a transaction – because the time to audit your advisory team is not the week the LOI lands on your desk.
—> Pull out a piece of paper and list every advisor who would be in the room if you were selling your business today. Your attorney. Your accountant. Your financial planner. Any broker or investment banker you've spoken with. Anyone whose name would come up.
Now, next to each name, answer one question:
—> Whose outcome does this person's fee depend on?
Not whose side are they on. Not whether you like them. Just who pays them, and for what?
An M&A broker typically earns a percentage of the sale price. That's not a conflict, but it's a context.
An attorney is billing hourly regardless of outcome.
A financial planner may be compensated based on assets under management post-close.
None of these arrangements are wrong. But they shape what someone is incentivized to prioritize, often in ways that have nothing to do with you - the owner.
The all-star roster for an exit isn't just about who has the credentials. It's about knowing exactly what each person at your table is optimizing for — and making sure someone, somewhere, is unambiguously optimizing for you.
That's what owner-centered actually means. Not a buzzword. A role.
Making Waves
We are thrilled to share that in July, Ripples Edge Advisors is hosting an event in Chicago during WNBA All-Star weekend:
Building Your All-Star Roster: The Advisory Team Every Business Owner Needs -
a gathering focused on the advisor team you need to protect and grow your wealth and business health. Think court-side strategy, but for your exit.
Interested in attending? Request an invite here
Other places to find us in Chicago that week (July 20th-25th)
Chicago Tech Week
Chicago Sports Tech Week, Women in Sports Day, July 23rd
FQ Lounge during WNBA All-Star, July 25th
Let’s grab coffee July 21st or 22nd? Reply to this and we’ll set it up!
