For Searcher CEOs, Exit Planning Begins at the Beginning of the ETA Journey

An Entrepreneur-Through-Acquisition is like the captain of a ship meant to deliver rewards to many constituants, and yet those rewards are uncertain and variable based on decisions made early in the life of the investment. 

In particular, the personal wealth-building of an ETA searcher may be compromised if certain tax consequences are not considered at the outset of the journey, a panel of experts tell Search Party.

In this episode,  Francis Burton, a Managing Director at ECA Partners, Nathan Faith, Wealth Management Partner at Boulay and Ryan Turbes, a Partner at Boulay, share best practices for exit planning - whether the planning involves a cold-facts assessment of the health of the business, operational upgrades meant to impress the next buyer or structural choices meant to maximize the wealth of the searcher in the happy event an exit is achieved. 

Francis, a specialist in executive search for ETA investments, also is an exited ETA searcher, having found himself in 2017 unexpectedly in the CEO seat of his family's business following the tragic passing of his father. Francis shares with Search Party his efforts to understand and right the business for a sale and the many decisions he made along the way impacting the performance of the business as well as economic outcome for his family. 

Discussed in the episode:

• Personal wealth planning starts on day one: Searcher-CEOs should define their personal financial independence goal at the outset and structure the deal (tax, equity, timing) with the end in mind, because early choices materially shape flexibility, returns, and after-tax outcomes 

• Deal structure can dramatically change net proceeds: Tax treatment (e.g., capital gains eligibility, 83(b) elections, depreciation recapture, allocation issues) can mean the difference between keeping most of the proceeds or losing up to half to taxes.

• Preparing a business to run independently of the founder, strengthening financial visibility, and aligning employees, investors, and leadership are essential to achieving a premium outcome and avoiding late-stage surprises 

• Whether and how much equity to roll into the post-exit company must be given serious consideration: Choices such as rolling over equity versus taking cash, setting “end zone” targets, and building tax-advantaged wealth buckets should reflect a clear personal plan—balancing risk, legacy goals, and long-term financial security