Timing the Cycle
Selling Before the Market Tells You To
Most founders don’t miss the top because they’re stupid.
They miss it because they’re busy running the business while the market quietly turns against them.
Markets don’t ring bells.
They whisper.
And by the time the signal is obvious, the multiple is already gone.
Here’s the hard truth I’ve learned buying, building, and exiting companies:
The best exits happen before the market agrees with you.
Below are the five signals sophisticated sellers watch — long before headlines catch up.
1️⃣ The Market Rewards Certainty, Not Courage
Founders love to say, “I’ll ride it out.”
Buyers don’t pay for bravery. They pay for predictability.
When markets tighten, buyers don’t stop buying — they reprice risk.
Same business.
Same EBITDA.
Lower multiple.
Why?
Because uncertainty expands the discount rate.
And once that happens, no story fixes it.
Insight:
Selling early isn’t fear. It’s discipline.
2️⃣ Liquidity Dries Up Before Valuations Fall
This is where most founders get blindsided.
Valuations don’t collapse first.
Liquidity does.
Banks tighten credit.
SBA underwriting slows.
Private equity raises fewer funds — or sits on dry powder.
Deals still close… just fewer of them.
And when buyers are scarce, they dictate terms.
Rule:
When financing gets harder, exits get cheaper — fast.
3️⃣ Your Business Peaks Before Your Revenue Does
Revenue is a lagging indicator.
Operational risk shows up first.
Buyers notice things founders ignore:
Owner fatigue
Key employee churn
Margin compression
Customer concentration creeping up
Your business might still be “growing” — but its risk profile is already rising.
That’s when the smart money sells.
Counterintuitive truth:
The best time to sell is when things feel stable, not spectacular.
4️⃣ Multiples Are Cyclical. Owner Age Is Not.
Every market cycle has winners and losers.
Time does not reset.
The longer founders wait, the more personal risk stacks up:
Burnout
Health
Family pressure
Loss of leverage
Buyers know this.
And they price it in.
Reality:
If the market turns and the owner is tired, the buyer smells blood.
5️⃣ Exit Readiness Is a Weapon — Not an Outcome
Founders who sell well don’t decide to sell.
They stay sellable.
Clean books.
Documented ops.
Delegated authority.
Predictable cash flow.
That optionality lets them choose when to exit — instead of being forced to.
Key distinction:
Waiting for “the right time” is passive.
Preparing before the cycle turns is power.
Final Thought – The Market Never Warns You Twice
By the time CNBC talks about a downturn,
by the time brokers say “buyers are cautious,”
by the time lenders change terms…
The window is already closing.
The best exits are quiet.
They happen when everyone else is still optimistic.
If you’re a founder thinking, “Maybe one more year” — ask yourself:
Is that strategy… or hope?
💼 If this sharpened your thinking:
Share it with a founder who’s delaying the hard decision.
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Love the counterintuitive bit about selling when things feel stable not spectacular. Reminds me of Buffett's idea bout selling when everyone's greedy except applied to private markets. The liquidity drying up point is underrated too, saw a deal fall apart last year where valuation was fine but financing just evaporated. Timing isn't everyhing but its often the only thing that matters.