What Actually Kills an Acquisition (It's Not Your EBIT)

Most founders think the exit conversation starts with the P&L. Get the EBIT number high enough, the thinking goes, and the rest takes care of itself. Saul Cohen has advised on more than 150 deals, and he's watched enough of them unravel to disagree. The reasons acquisitions fail rarely show up on an income statement. They show up in the parts of the business nobody thinks to price, until a buyer's diligence team finds them.

EBIT Gets You in the Room. SCORE Sets Your Multiple.

EBIT is what gets a buyer to take the first call. It's the headline number, the thing that decides whether you're worth a conversation at all. But it's not what decides the multiple, and it's rarely what kills a deal once diligence starts.

Cohen's framework for the part that actually matters is SCORE: Systems, Commercials, Organization, Regulatory, and Exposure. Each one is a place where a buyer prices in risk that a strong EBIT can't offset. Think of EBIT as the ticket to the room. SCORE is what the buyer is actually evaluating once they're sitting across the table from you.

The useful thing about SCORE is that none of it requires a banker or a deal in progress to assess. A founder can walk through it two years before a sale just as easily as two months before one. The earlier you do, the more of it you can actually fix.

Systems: Could Someone New Figure Out How Your Business Runs?

Start with a simple test. If you disappeared for a month, would the business run the same way? Could a new operator open your systems and understand how orders move, how decisions get made, and where the exceptions live, without calling you?

Most founders overestimate how documented their business actually is. Process lives in Slack threads, in a spreadsheet only one person updates, in a habit nobody wrote down because it never needed writing down. That's fine when you're the one running it. It's a liability the moment someone else has to.

A buyer isn't just paying for what the business generates today. They're paying for their confidence that it keeps generating that after you leave. Undocumented systems are the fastest way to erode that confidence, no matter how good the number on the P&L looks.

Commercials: What Happens to Your Pipeline If You Disappear Tomorrow?

This is the sharper version of the same question, applied to revenue. If your biggest accounts are relationships you personally hold, what happens to those contracts the day you're no longer the person on the other end of the email?

Buyers look hard at how much of the pipeline is tied to the founder rather than the company. A sales process that depends on your personal credibility isn't really a sales process. It's a talent, and talent doesn't transfer in an acquisition.

The fix isn't complicated, even if it's slow. Get account relationships owned by more than one person. Put renewal terms and pricing logic in writing instead of in your head. Make sure the next call in a client relationship doesn't have to be with you.

Organization: The "Founder Stardust" Problem, and How to Build Past It

Cohen has a name for what happens when a business is too closely identified with its founder: founder stardust. It's the invisible discount buyers apply when they suspect the value of the company and the value of the person are the same thing.

Founder stardust shows up in small ways before it shows up in a term sheet. Employees who escalate everything to you instead of to a manager. A leadership team that can execute a plan but can't build the next one. A brand voice, culture, or vendor relationship that only really works because you're the one holding it together.

None of that is a bad thing while you're running the company. It becomes a problem the moment someone else has to run it instead. Building past founder stardust means putting real decision-making authority into other people's hands long before you need to, so the business has already proven it can operate without you before a buyer ever asks.

Regulatory and Exposure: The Risks Nobody Puts in the Data Room

Every deal has a version of this moment: diligence turns up something that was never on anyone's radar. A contract with an auto-renewal clause nobody remembered signing. A customer concentration issue that looked fine until someone did the math. A compliance gap that was manageable at your current size and won't be at the buyer's.

These are the risks that don't live in your financials at all, which is exactly why they're dangerous. They surface in legal review, in customer contracts, in regulatory filings, in the parts of the business a founder doesn't think to prepare because nobody asked about them until now.

Cohen's read, after 150 deals, is that this is where good businesses lose the most value relative to what they actually deserved. Not because the underlying company was weak, but because nobody went looking for these risks until a buyer's lawyers did it first.

Start the Clock Now, Not the Year You Plan to Sell

Here's the part founders get wrong most often: they treat SCORE as an exit exercise, something to clean up in the twelve months before a sale. Systems, commercials, organization, and exposure don't fix themselves on that timeline. Documenting a process takes weeks. Building a leadership team that can operate without you takes years.

The founders who get the multiple they actually deserve are the ones who ran this assessment long before they needed to, not the ones who scrambled once a buyer showed up. Whether a sale is years away or not on your radar at all, the work is the same work, and it only gets more expensive the longer you wait.

If you want a second set of eyes on where your own business would score, that's a conversation worth having now, while there's still time to do something about the answer.