How & When do CEO Entrepreneurs Know when to Exit?
Ephor Newsletter Q3 2026
June 2026
This June 2026 Newsletter, as we committed, is another in the sequential newsletter “curriculum” Ephor initiated in Q4 2025 to provide relevant guidance to CEO Entrepreneurial/Founders who are contemplating Selling or Exiting Your Business, or possibly in the near-term are preparing and educating themselves on this important life decision.
As a refresher, in Ephor’s Q4 2025 Newsletter, we provided a playbook on “Exit Planning Fundamentals”: subsequently, in our January 2026 Newsletter we provided an educational tutorial on “Buyer Type Attributes” and then in our Newsletter of March 2026, we provided a high-level overview on specifically what are the "Wealth Transfer Options and Exit Financing sources." Last Month in our May 2026 Newsletter we provided a “deep dive” and detailed review of your Exiting Financing Options.
Therefore, in this June 2026 Newsletter we are addressing the fundamental question of When to Exit and Why?
Selling or exiting your business is likely the most important and biggest financial decision of your life. Therefore, the timing and the objectives for selling your business assets are critical success factors.
In Ephor’s 25+ years of advising and investing in CEO Entrepreneurial led businesses we most often introduce the answer to When and Why to Sell through to the following concept:
Take your age and then add the percentage of your total net worth that resides in your business. If that total is over the number 130, you have way too much of your personal financial risk concentrated in one asset. (Your business equity)
At Ephor we call this the rule of 130; it is one of the simplest metrics or guidelines Ephor uses to advise and evaluate if it is time to exit your business or at a minimum sell a portion of the business equity. This rule applies most readily to the CEO Entrepreneur who is 50+ years old.
For Example: a 58-year-old CEO Entrepreneur Founder with 85% of their total net worth “locked up” in the business equity is sitting at 143. (versus the target of 130). That is not a competency failure or something else, it is simply too much risk in one asset. One lost major customer or 2; one bad economic cycle, one regulatory change or political disruption, one lawsuit, 1-2 bad years and your entire family financial future is a risk. Is that a level of risk worth enduring and for how long?
For CEO Entrepreneurs & Founders less than 45-50 years old at Ephor we highly recommend that the business equity value should never exceed more than 75% of your total net worth. Therefore, for this age group over our 25+ years Ephor has successfully guided 19 organizations and their CEO entrepreneurial shareholders to execute on the various recapitalization alternatives (“Recap”) as we provided in our May 2026 Newsletter.
For this age group possibly you are just not ready for all those transformational realities of life; perhaps you still have the energy and desire to continue; perhaps you still believe in your company & its future under your leadership; and perhaps you are still motivated by working with the clients and the leadership team? If so, then your positive answers to any of the above questions further ratifies that you, the CEO Entrepreneur, should consider “wealth transferring” again by evaluating and then executing on 1 or 2 of the “Recap” alternatives available.
Certainly, a lot to think about huh? For most CEO Entrepreneurs it “all” gets confusing: financials considerations; emotional considerations; life plan considerations; time management etc.
At Ephor having been through this process ourselves as owner operators combined with at Ephor we have guided 19 organizations through these very thought process.
As such, we are happy to provide on a gratuitous basis an hour or so of our time to “frame your thought process based on your individual situation”. Reply to this email.
In the meantime; enjoy your summer and please spend quality time with your family and loved ones; after all they are a lot more important than our business aspirations