Build a PE exit readiness KPI and narrative pack that buyers trust
When reporting is inconsistent, buyers assume risk. Leaders need a decision-grade performance story with clean KPI definitions, traceability, and a narrative that holds up in diligence.
The question behind this piece
Exit processes rarely fail because a business is bad. They stall because buyers cannot underwrite the story quickly, or they find inconsistencies that create doubt. Teams respond with heroics: last-minute reconciliations, custom cuts of data, and repeated explanations that change week to week. How do you build an exit readiness pack that a buyer can trust, so diligence moves faster and the narrative stays stable?
Why this matters now
Buyers are less forgiving about ambiguity. They still pay for growth and quality, but they expect evidence. When KPI definitions shift, dashboards do not reconcile to financials, or cohort cuts are not repeatable, the default reaction is to price in risk.
At the same time, many portfolio companies have more systems than they used to. CRM, billing, product analytics, support tooling, and BI layers create multiple versions of truth. If those systems are not governed, the “KPI story” becomes a debate, not a proof pack.
Old approaches fail because they treat exit readiness as a slide exercise. Buyers do not buy slides. They buy a coherent, traceable performance system.
In diligence, inconsistency is interpreted as risk, even when it is just messiness.
Our perspective
A buyer-trust exit pack has two jobs: make performance legible, and make it defensible. That requires a few design choices, executed with discipline.
Start with what buyers underwrite
- Most companies have dashboards. Few have a buyer-grade KPI set. Define a tight KPI spine based on the business model: revenue quality, retention and cohorts, unit economics, margin bridge, cost-to-serve, sales efficiency, and operating leverage. Then explicitly choose what is in and out. Exit readiness improves when the story is narrow and repeatable.
- Build a KPI dictionary that ends debates. Every KPI needs a stable definition: formula, inclusions and exclusions, time window, segmentation, and owner. If a KPI has been “interpreted” differently across functions, fix it now. A clean KPI dictionary reduces internal thrash and prevents buyers from finding conflicting numbers across decks, board materials, and the data room.
- Add traceability so the pack holds up under pressure. Traceability is the difference between “trust us” and “here is the lineage.” For each KPI, document source systems, transformation logic, key assumptions, and reconciliation points. Where practical, reconcile key KPIs to financial statements or management accounts. Buyers do not need perfection. They need confidence the numbers are produced consistently and can be reproduced quickly when questions arrive.
- Convert the investment narrative into an evidence pack. A strong narrative is not a story. It is a set of claims backed by evidence. Map thesis statements to proof: “why we win,” “why we retain,” “why unit economics improve,” and “why margins expand.” Attach the evidence: cohorts, funnel conversion, pricing realization, churn drivers, expansion, and operating improvements. Keep it consistent across the CIM, management presentation, and monthly reporting. The goal is one narrative, supported by one measurable spine.
- Design for the diligence request stream. Most requests are predictable: cohorts by segment, churn by reason, margin bridges, CAC payback by channel, pipeline quality, support cost trends, customer concentration, and contract terms. Pre-build standard views before you go to market. Then index the data room and run a repeatable diligence response cadence, so the team is not rebuilding the business every week.
- Run a red-team diligence dry run. Simulate diligence internally. Pressure-test the narrative, force reconciliation, and ask the uncomfortable questions early. Where the story is fragile, either improve the evidence, narrow the claim, or document assumptions transparently. This is how you reduce surprises when real buyers show up.
The goal is not to look polished. The goal is to be reproducible.
How Strathen Group can help:
Exit Readiness Diagnostic (3–4 weeks).
If you are planning a sale process, recap, or refinancing, we can build a buyer-grade KPI spine, KPI dictionary, traceability, and a narrative-aligned reporting pack, plus a diligence-ready library of common cuts and a red-team dry run.
