How Technology Increases Enterprise Value Before an Exit

For mid-market companies and private equity-backed businesses planning an exit—whether via acquisition or IPO—maximizing enterprise value isn't just about financial performance. It’s about signaling readiness, scalability, and operational maturity. And increasingly, it’s about how well your technology ecosystem supports those things—especially through automation and AI adoption.

At Making Sense, we’ve spent over 15 years helping companies use technology not just to run their business—but to increase its value. What used to be a back-office concern is now a core lever in how the market perceives readiness, scalability, and future potential. When tech is aligned with business strategy, even modest improvements—like automating a manual workflow or optimizing system architecture—can unlock meaningful valuation gains.

What is exit valuation and why is it key?

Exit valuation is the estimated worth of your business at the time of sale or IPO. Unlike fundraising rounds based on projections, exit valuation is rooted in performance: recurring revenue, customer retention, profitability, scalability, and operational resilience. For buyers and investors, it’s a litmus test of whether your business can deliver sustainable, scalable returns post-acquisition.

Common methods to calculate exit valuation

Knowing how valuation is calculated helps you make smarter, more strategic technology investments—ones that directly impact financial outcomes. The market typically leverages three core valuation approaches, each relevant depending on company maturity, industry, and deal structure:

• Discounted Cash Flow (DCF)
  Projects future cash flows based on realistic growth and cost assumptions, then discounts them to present value using an appropriate rate. DCF is especially valuable for companies with predictable cash generation and a longer-term horizon.
• EBITDA-Based Multiples
  This approach applies a multiple—derived from comparable transactions or industry benchmarks—to the company’s EBITDA, capturing operational profitability. It is widely used by private equity firms evaluating operational efficiency improvements driven by technology.
• Revenue Multiples (Common in SaaS and Tech Models)
  For companies with recurring revenue streams or high-growth potential but limited profitability, revenue multiples provide a proxy valuation based on top-line performance, often adjusted for churn and customer acquisition cost trends. 

Effectively preparing for an exit means understanding which method best reflects your business model and how technology-driven improvements—such as automation, scalable infrastructure, or enhanced customer engagement—can positively influence these valuation inputs.

How to prepare your company for a successful exit

Several interdependent factors shape how the market perceives your company’s worth:

• Sustainable, Efficient Growth: Valuations favor companies with strong revenue growth and healthy margins. Key metrics like CAC, LTV, and churn tell the story.
• Predictable Revenue: Consistent ARR, high retention rates, and clear sales conversion metrics boost confidence.
• Scalability of Tech: Even if you’re not scaling now, a modular, cloud-based architecture—and increasingly, AI-ready infrastructure—signals growth-readiness and reduces investor risk.
• Operational Efficiency: Contribution margins, unit economics, and time-to-market are crucial. We’ve seen companies materially increase value by reducing reliance on manual processes and deploying AI to reduce costs.
• Market Opportunity & Competitive Positioning: Investors want to know you’re in a market with room to grow—and that your tech stack gives you a durable advantage.

The role of technology in due diligence

Tech due diligence is often a make-or-break phase. Red flags we frequently uncover include:

• Legacy systems with high maintenance costs
• Overreliance on specific individuals
• Lack of documentation, testing, and DevOps maturity
• No visibility into performance or engagement metrics
• Dependencies on third-party tools without owning the IP or roadmap

These issues shake buyer confidence and can delay or lower the deal value. On the other hand, a modern, AI-ready codebase with strong CI/CD and clear tech-business alignment builds trust—and often, negotiation power. 

Quick wins that drive perception—and price

You don’t need a full-scale replatforming to move the valuation needle. Often, the most impactful moves are:

• Automating high-friction workflows with AI
• Improving onboarding experiences through smarter UX
• Accelerating page load speeds with optimized infrastructure
• Implementing real-time analytics to improve data visibility and decision-making

For instance, we partnered with a legal industry client, Esquire, to optimize a core business process they executed thousands of times per week. The result was a 40% boost in operational efficiency for their workforce, eliminating the need to scale headcount and enabling faster acquisition integration.

In another case, we helped Auto Approve, a fintech company specializing in car loan refinancing, address operational challenges in their call center. By implementing an AI-powered data pipeline and predictive models, they achieved a 15-25% reduction in missed calls and 20-30% faster response times, directly increasing loan application completion by 15-20%.

Similarly, for Vetsource, a leading pet care provider, we modernized their technology systems to align with rapid business growth. We envisioned, built, and maintained a suite of scalable, cloud-based tools that automated key operational processes and delivered new value. Leveraging a state-of-the-art design system, this collaboration resulted in a 2X increase in their customer base through Vetsource Payments and a 10X increase in project profitability with a key integration—showcasing how modernizing core systems drives competitive growth and operational efficiency.

How AI-specific capabilities influence exit valuation

Investors increasingly view AI readiness as a proxy for long-term innovation potential. Companies demonstrating effective use of AI in process automation, predictive analytics, or personalization are often perceived as more competitive and resilient.

Whether it's improving financial forecasting, enabling dynamic pricing models, or scaling customer support through AI agents, these applications show measurable ROI—fast. At Making Sense, we help clients adopt AI in ways that are tightly coupled with business outcomes, ensuring it's not just hype but a real lever for enterprise value.

What investors want to hear—and see

When speaking with potential buyers—especially PE firms—these are the value signals that matter most:

• Clean, scalable, and well-documented architecture
• Measurable operational KPIs tied to tech performance
• Ownership of IP and clarity on product roadmap
• Ability to scale without bloating headcount
• Evidence of AI capabilities with real use cases and outcomes

Common mistakes when valuing a business exit

Too often, companies assume “it works” is good enough. But investors ask:

• Can it scale?
• Can it evolve?
• How fast can we build on top of it?

Failing to address these questions—or waiting until six months before a sale to act—is a missed opportunity. It’s not about spending big; it’s about moving early and strategically. Timing matters more than budget.

Preparing for a strategic exit

To increase your valuation and attract the right buyers, I recommend:

• Running your business as if it were always in diligence—track metrics, document systems, eliminate technical debt.
• Linking tech to business KPIs—show how improvements drive LTV, reduce churn, or shorten sales cycles.
• Building a compelling narrative—help buyers understand how your tech accelerates their roadmap, reduces their risk, or expands their capabilities.
• Identifying synergy drivers—cost reductions, market access, tech leverage.
• Managing buyer risk perception—anticipate concerns and proactively address them.

The Making Sense advantage

At Making Sense, we don’t just build—we embed. Our cross-functional teams of strategists, designers, and engineers work alongside clients to:

• Discover critical tech-business misalignments
• Identify high-impact quick wins
• Reduce operational friction
• Accelerate delivery without increasing headcount
• Tell the right story to buyers through scalable, modern, investor-ready solutions

We understand that a strong tech foundation—especially one that’s automation- and AI-ready—doesn’t just support operations. It signals future value. And when it comes to an exit, perception is half the equation.

Final thought: Valuation is the outcome, not the starting point

The exit isn’t the end of a journey—it’s a reflection of how well the business has been run. The real work starts years before, in every architectural decision, every integration, and every operational choice. Building with discipline, efficiency, and scalability doesn’t just prepare you for the exit—it maximizes what that exit is worth.

If your company is thinking about a strategic sale, acquisition, or simply wants to be ready when the opportunity comes, start with your tech. Done right, it’s not a cost center—it’s a value multiplier.

Curious how your current tech stack might be affecting your valuation—positively or negatively? 

Let’s talk about how to turn it into a real asset before the exit.