How To Prepare For A Clean Business Exit: Insights From David DiGiacomo On The Build A Business Worth Buying Podcast By Aaron Alpeter (Video) – Contracts and Commercial Law

Exiting a business is a pivotal moment for every founder. No
matter the deal size, there are some basic principles you need to
keep in mind to have a clean exit.

In a recent episode of Build a Business Worth Buying, I
got to sit down with Aaron Alpeter, podcast host and founder/CEO of
Izba Group to share invaluable insights I’ve gleaned from
working on both sides of the table.

Watch the full episode:

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Here are the top strategies we discussed to help you have a
smooth exit that maximizes the value of your business.

1. Start Early. Way Earlier Than You Think

If you’re thinking of selling in the next three years,
it’s actually best to start preparing today. While this
timeline may seem long, legal, tax, and operational readiness take
more time than people often thing. Early planning allows you
to:

• Optimize tax structures (e.g., QSBS eligibility)




• Clean up contracts and employment agreements




• Build a data room with organized documentation

Pro Tip: Ask your legal team for a sample due
diligence checklist now. Begin collecting and organizing documents
as they come across your desk.

2. Legal Isn’t Just for Emergencies—It’s a
Strategic Asset

Many founders view legal counsel as a last resort. At Michael
Best, we are showing entrepreneurs that your legal team can be a
proactive and strategic asset to your company. Your legal team
can:

• Save millions through tax planning




• Reduce deal risk and indemnity exposure




• Improve buyer confidence and valuation

Pro Tip: Treat your legal team as your
strategic partner. Involve them early to structure deals, clean up
IP, and prepare for diligence.

3. Know What Can Derail a Deal…and Fix It Early

Growth is messy. Your M&A can’t be. Common deal-breakers
include:

• Missing IP assignments




• Poor employment classification




• Unassignable customer contracts




• Unclear asset ownership

Pro Tip: Review your top contracts and ensure
they include assignment clauses. Clean up employment records and IP
documentation.

4. Align Incentives in Earnouts

Earnouts can be tricky. Founders often lose control post-close,
making it hard to hit performance targets.

Pro Tip: Structure earnouts around achievable,
shared goals. Ensure both buyer and seller are incentivized to grow
the business together.

5. Understand the Buyer’s Perspective

Buyers assess risk. A well-run, organized business signals lower
risk and higher value. Conversely, if your business is highly
disorganized, it can lead to price reductions and longer
negotiations.

Pro Tip: Present a clean, professional, and
attractive offer for buyers. Have your financials, contracts, IP,
and HR documentation ready and organized so the buyer can easily
review.

6. Prepare Personally, Not Just Professionally

Your net worth may be tied up in your business. A successful
exit requires personal financial planning:

• Trust and estate planning




• Tax strategy for proceeds




• Understanding deal structures (cash, earnouts, seller
  notes)

Pro Tip: Work with a CPA and financial adviser
early to prepare for life after the exit.

7. Build a Business with a Moat

The best businesses aren’t just profitable, they’re
defensible. The most effective moats come from delivering
consistent value and building trust with all parties involved.

Pro Tip: Focus on being the best at what you
do. Build a brand and customer experience that buyers see as
irreplaceable.

Final Thoughts

A clean exit goes beyond the sale. By starting early, involving
the right advisers, and preparing both your business and yourself,
you can maximize your outcome and minimize stress. An authentic,
well-run business is not a paradox—it’s the secret.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.