Most founders only go through a private equity transaction once. The ones who get the best outcomes usually start preparing 12 to 24 months before they talk to a buyer. Preparation does not mean dressing the business up. It means making it easy for a partner to understand what you have built and why it will keep growing.
1. Get your financials investor-ready
- Three years of clean financial statements plus year-to-date, ideally reviewed or audited by an outside CPA.
- Monthly reporting that ties to your tax returns and bank statements.
- A list of owner-related and one-time expenses (add-backs) with documentation, so normalized EBITDA can be supported.
- Revenue broken down by customer, service line, location and, for healthcare, by payer.
2. Reduce key-person risk
Partners invest in businesses that can grow beyond the founder. Document how the work gets done, develop a second layer of managers and make sure important relationships are shared across the team, not held by one person.
3. Understand your customer and payer concentration
If one customer or payer is more than 20 to 25 percent of revenue, expect questions. Know your contract terms, renewal dates and history with your largest relationships.
4. Clean up legal and compliance
- Corporate records, ownership and any prior agreements with partners or investors
- Leases, licenses and key contracts, including change-of-control terms
- Employment agreements, non-competes and benefit plans
- For healthcare: licensure, payer contracts, coding and billing compliance
5. Be clear about what you want
The right partner depends on your goals. Decide how much liquidity you want now, how long you want to keep leading the company, how much ownership you want to keep and what you want for your team. These answers shape the structure, and the partner, that fits.
A simple readiness checklist
- Three years of financials and year-to-date
- Documented add-backs
- Revenue by customer, service and payer
- Organization chart and key-employee plan
- Major contracts and leases organized in one place
- Clear personal and financial goals
KVLR Capital partners with founder-led companies that have $1M+ EBITDA and at least 5 years in operation. Download our partnership criteria or start a confidential conversation.