Founder exit and succession
Founder exit and succession
Who this is for
Corinium Advisory works with founders and owner managers of UK B2B SaaS and vertical software businesses, typically between £1M and £10M ARR, who are deciding whether to sell, take cash off the table, bring in a backer or hand the business to a successor.
You built the business and you are now thinking about what comes next. That might be a full exit, partial liquidity through a partial sale or non dilutive debt that takes some money off the table, a growth equity investor who can fund what you cannot, or a successor who runs the business while you transition to a part time board shaped role. Each of those is a different deal, with a different buyer, a different structure and a different outcome for you personally, and most founders sell a software business only once.
Corinium Advisory is independent of any corporate finance adviser, bank or fund. It is paid by the founder and by nobody else in the process. The one relationship to know about is Corinium Capital, its parent, which buys software businesses, and how that is handled is set out below. Robin Smith has sat on the operator side of buy side, sell side and post deal work. As Chief Operating Officer of Regnology he led due diligence and integration across four acquisitions and supported the partial divestiture to CPP Investments, and over twenty years he has owned revenue and operations in software businesses from pre-revenue to more than £200M ARR.
The job here is to help you think clearly before anyone else is in the room, prepare the business so a buyer finds what you want them to find, choose and sequence the advisers who will run the process, and get introduced to the buyers and funds that actually acquire software businesses of your size. It is not a corporate finance mandate and it does not replace one. It sits beside you, on your side of the table, for as long as the decision takes, and can support you from when you first start considering options all the way through to close and the first hundred days after it.
Three stages, six jobs
Thinking, preparing and executing. Six pieces of work, in the order they usually need doing, and the order in which skipping them costs the most.
Founder exit planning starts with a personal answer, not a valuation. A full exit, a partial exit, succession and growth capital are different outcomes, and the right one depends on your number, your timing, the role you want after the deal, and what the business needs that you can no longer give it. Most founders have this conversation too late, usually once a buyer has already set the agenda. We have it first, in private, and write down what you would and would not accept before the process makes the decision for you.
A trade sale, a private equity buyout, a minority growth investment, non dilutive debt or credit, a management buyout, an employee ownership trust, an independent sponsor buying deal by deal, or simply holding the business and taking dividends each mean something different for control, for cash now against cash later, and for what you are left holding. The non dilutive options are the ones founders most often miss: a lender or credit fund can release cash to you against recurring revenue and leave your shareholding intact, in exchange for covenants and a repayment schedule. In a private equity structure, preference shares and loan notes with a rolling coupon usually sit ahead of the ordinary shares. Whether your rollover sits pari passu with the fund's instruments or behind them in ordinary equity changes what it is really worth. We explain each option in plain English. Your tax position should come from your accountant, and timing around a Budget matters.
Exit readiness for a software company means having the evidence a buyer will test before they ask for it. That means an ARR cube with build by customer, churn, gross and net revenue retention, customer concentration, and contract terms including break clauses, all reconciled to the accounts. It also means management depth beyond you, a leadership story a buyer believes, clean financials, and early vendor due diligence or a quality of earnings review where it pays for itself. Preparing a software business for sale takes 12 to 24 months, if not longer, to plan for thoroughly. Leaving it late, or cutting corners, costs a lower price or a broken deal. Readiness engagements are flexible. A founder with a buyer already at the door needs a different shape of help from one planning a sale in two years, so we fit the length and cadence of the work to your timeline and priorities rather than to a fixed programme.
Choosing a sell side adviser is the single decision that most shapes the outcome, and it is usually made on a referral and a lunch. We help you work out whether you need a corporate finance adviser at all, how to sequence advisers, lawyers, accountants and exit readiness specialists, and what a good adviser does and does not do. Fees are usually a retainer plus a success fee, and the detail of both matters more than the headline. Appointing lawyers before an adviser, or shopping the business to several advisers at once, can damage the outcome. We prepare the beauty parade and the questions to ask in it. The shortlist at this size usually spans technology focused corporate finance boutiques, accountancy led corporate finance teams and, towards the top of the range, mid market investment banks. Around them sit the lawyers, tax advisers, financial and commercial due diligence providers and, where the finance function is thin, a fractional finance lead. We cover how to choose and sequence every one of them.
UK software businesses between £1M and £10M ARR are bought by trade acquirers, lower mid market private equity, growth capital funds, deal by deal sponsors, aggregators and family offices. Each differs on price, structure, speed and, most importantly, culture. Trade pays for strategic fit and tends to move slowly. Private equity pays for predictable recurring revenue and structures the deal around it. Growth funds take a minority and expect a second exit. We introduce founders to the right categories and, where we know them, the right people, and we help you read term sheets and offers side by side. We hold working relationships across all of those categories, from trade acquirers and lower mid market private equity to growth funds, deal by deal sponsors, aggregators and family offices, and the introductions come from us directly.
Running the process well means managing exclusivity, diligence, the share purchase agreement and completion without losing the business underneath it. Earn outs and rollover need to be understood as what they are, which is deferred and conditional value. Then come the first 100 days under new ownership and your own transition out of a role you have held for years. We stay close through the process and after it, and the same experience underpins our post acquisition integration and 100 day plan work and our non-executive director and Chair roles.
Conflicts and independence
Corinium Capital acquires established UK software and service businesses from their owners. Where a founder's business could be of interest to Corinium Capital, that is disclosed at the first conversation and the founder decides whether Corinium Advisory acts, Corinium Capital looks, or neither. The two never engage on the same business at the same time. Advisory fees are never contingent on a transaction with Corinium Capital.
Situations
Most founders do not know what they do not know about selling a business until it costs them either in the valuation or, more critically, the deal itself.Why the work starts before the process does.
FAQ
Straight answers to the questions founders ask before, during and after a sale process.
Most UK software company sales take six to twelve months from appointing a sell side adviser to completion, and the preparation before that takes longer. The process itself runs through preparing materials, approaching buyers, taking first round offers, granting exclusivity, diligence, negotiating the share purchase agreement and completing. Businesses that arrive with clean revenue data and a management team that runs without the founder move faster and lose less price along the way.
A UK software business of this size is usually valued as a multiple of recurring revenue or of EBITDA (earnings before interest, tax, depreciation and amortisation), and the multiple moves with growth, gross and net revenue retention, gross margin, customer concentration, the share of revenue that is contracted and recurring, and how dependent the business is on its founder. There is no reliable number without a process, and anyone who gives you one before looking at the data is selling something. A readiness review tells you which of those drivers you can still move before you go to market.
Take a minority investment if you want to keep running the business and believe there is more value to build with a partner than you could realise today. Take a full sale if you want certainty and a clean break. A minority investor leaves you in charge of the day to day but brings shareholder rights, a timetable and an expectation of a second exit, and the preference terms on their money matter as much as the headline valuation. We work through both routes with you before an adviser or an investor frames the choice.
Appoint a sell side adviser once you know what you want and the business is close to ready, usually a few months before you intend to go to market, and not before. Appointing too early means paying a retainer while the business is still being prepared. Appointing too late, or letting a buyer who approached you set the pace, means negotiating without competitive tension. Lawyers come after the adviser, not before.
Not always, but for a software business going to institutional buyers a quality of earnings review or a vendor due diligence report usually pays for itself. It finds the problems before a buyer does, supports the price, shortens the buyer's own diligence and reduces the chance of a price chip late in the process. For smaller businesses, a disciplined internal reconciliation of the ARR build, the churn data and the contracts often does most of the job.
An earn out is part of the price paid later, conditional on the business hitting targets after completion, and it bridges the gap between what a buyer will pay now and what you believe the business is worth. Accept one only if the targets are within your control after the deal, the measurement is defined precisely in the share purchase agreement, and you would still be content with the deal if the earn out paid nothing. Treat it as upside, not as price.
After a private equity buyout most founders roll part of their proceeds into the new structure and stay on for a period, often moving from chief executive to a board or product role as a new management layer is built. The rollover usually sits behind the fund's preference shares and loan notes, so its value depends on the second exit going well. Founders who plan their own transition before the deal fare better than those who wait to be told what it looks like.
Yes, and many buyers will want you to. Trade buyers usually want a handover period and private equity usually wants the founder to stay longer and to invest alongside them. The questions are on what terms, in what role, with what authority and for how long, and they need agreeing before you sign heads of terms, not after.
Exit readiness means making a software business easy to buy: revenue data that reconciles to the accounts, contracts that are clean and assignable, management that runs the business without the founder, a credible plan for the next three years, and financials a buyer's accountants can rely on. Done properly it takes 12 to 24 months, and it raises the value of the business whether or not you sell.
Corinium Advisory is paid by the founder, on a day rate, a fixed scope or a monthly retainer, and is independent of any corporate finance adviser, bank or fund. Corinium Capital, its parent, acquires established UK software and service businesses. Any potential interest in a founder's business is disclosed at the first conversation, the founder decides who acts, the two never engage on the same business at the same time, and advisory fees are never contingent on a transaction with Corinium Capital.
Guides
The six areas every buyer tests, from the ARR cube and retention to contracts, people, financials and legal, and what good looks like in each.
Exit readiness checklistHow earn outs work in UK software deals, the metrics and protections that decide whether they pay, and when to take a lower certain price instead.
Earn outs when selling a software businessHow the two kinds of buyer value the business, structure the deal, handle rollover equity and preference shares, and what each wants from you afterwards.
Selling to private equity or tradeFour routes, full sale, growth equity, partial liquidity and non-dilutive debt, and a way of deciding between them that starts with you rather than with the multiple.
Growth equity or a full saleHow serial acquirers buy and hold software businesses: what they look for, how they value, why deals are fast and mostly cash, and what to check before accepting.
Selling to an aggregatorAlso from Corinium Advisory
Buy side and sell side diligence on software assets for private equity funds, credit funds, lenders and corporate acquirers, plus vendor diligence readiness for founders preparing to sell.
Commercial due diligence on softwareNon-executive director and Chair appointments on the boards of B2B and vertical software companies, including boards planning a founder transition or chief executive succession.
NED and Chair for software boardsEmbedded operating partner support for private equity funds and software portfolio companies, including post acquisition integration and the first 100 days under new ownership.
Operating partner for software companiesContact