From Angel To Exit

43: Inside Private Equity Due Diligence: What Founders Must Fix Before an Exit

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What separates a successful exit from a discounted deal?

In this episode of From Angel to Exit, Bruce Eckfeldt sits down with Chris Maresca — serial entrepreneur, seven-time exit founder (including one IPO), and current private equity due diligence leader — to unpack what really happens behind the scenes during acquisitions.

Chris has built 14 startups, led turnaround consulting engagements, and now works inside private equity performing pre-deal technical due diligence. His perspective is uniquely valuable: he’s been on both sides of the table.

The conversation reveals a hard truth — buyers don’t see your company the way you do. While founders focus on vision and growth, private equity firms deploy teams of 40+ specialists who dissect financials, legal agreements, commercial positioning, technical infrastructure, HR systems, and culture. Every weakness becomes a “remediation cost,” directly impacting `valuation.

Chris explains how red flags cascade. One discovered issue — a chaotic culture, overconfident leadership, poor documentation — can trigger deeper scrutiny across the organization. Buyers assume risk until proven otherwise.

He also highlights a common mistake: companies that are profitable and growing but operationally unprepared. From accounting run on spreadsheets to undocumented licensing exposure, these issues don’t necessarily kill deals — but they reduce price.

The episode also explores broader market forces driving today’s exit environment, including rapid deal cycles, AI-driven diligence acceleration, currency arbitrage, and the largest intergenerational wealth transfer in history.

For founders preparing to scale and eventually exit, Chris offers a clear message:

You don’t just need to be valuable — you need to be buyable.

This conversation is essential listening for CEOs in the $5–100M range who want to understand how private equity evaluates risk, where valuation adjustments happen, and how to prepare years in advance for a successful transition.

Key Takeaways
  • Valuation Gets Adjusted for Remediation Costs
  • One Red Flag Triggers Broader Scrutiny
  • Mock Due Diligence Is Critical
  • Documentation Equals Credibility
  • Cultural Misalignment Shows Up in Exit
  • Overpromising in Sales Creates Risk
  • Know Your Industry Metrics Cold
  • Buyers Think in Fund Cycles, Not Emotions

    • Timestamps:

    00:00 – Introduction to Chris Maresca and His Journey

    04:20 – The Evolution of Startups and Exits
    08:52 – Understanding the Exit Process
    13:23 – The Role of Curiosity in Entrepreneurship
    18:05 – Preparing for an Exit: Key Considerations
    20:55 – The Importance of Alignment in Business Operations
    26:12 – Preparing for Exit: The Role of Due Diligence
    27:32 – Conducting Audits: Ensuring Readiness for Sale
    34:53 – Understanding the Buyer’s Perspective
    36:53 – The Acceleration of Due Diligence Processes
    41:37 – Navigating Wealth Transfer and Market Dynamics

     

    Links & Resources

    • Chris Maresca

      • Email: [email protected]

      • Website: https://c32.co

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                From Angel To ExitBy Bruce Eckfeldt