Why 97% of PE Sponsors Expect Always-Exit-Ready, and How to Actually Get There

Ninety-seven percent of private equity sponsors now expect their portfolio company CFOs to maintain an "always exit-ready" posture. That's not a typo. It's not a rounding error. It's near-unanimity from an industry that agrees on almost nothing.

Here's the part nobody wants to say out loud: only 20% of CFOs actually operate that way.

That 77-point gap between expectation and execution isn't a soft-skills problem. It isn't a mindset issue that a better board deck template will fix. It's a structural failure that, according to the data, is costing PE firms between one and three turns of exit multiple on every deal where it shows up.

The Accordion 2025 Exit Readiness Survey put numbers to what operating partners have known for years: the companies that scramble to get exit-ready when a banker calls are the same companies that leave the most money on the table. The firms that quietly embedded exit discipline into their operating model from day one are the ones clearing diligence in weeks, not months, and closing at multiples that make the scramble-and-sprint crowd look negligent.

This isn't about working harder in the final stretch. It's about recognizing that the final stretch is a symptom of everything that wasn't built earlier.

The Sprint Is the Problem, Not the Solution

Most PE-backed CFOs treat exit readiness the way most people treat tax season: a burst of frantic activity compressed into the shortest acceptable window. Accordion's data confirms it. Eighty-one percent of sponsors want exit preparation to begin twelve to twenty-four months before a potential sale. Fifty-four percent of CFOs don't start until three to six months out.

That compression isn't just stressful. It's expensive.

Seventy-one percent of sponsors in the survey reported that compressed preparation timelines directly correlate with lower deal multiples. Thirty-nine percent cited rushed exits as a direct cause of post-sale adjustments. When a company scrambles to assemble a coherent equity story in ninety days, the cracks show up in diligence. Buyers see them. And buyers price them in.

The industry is sitting on approximately 31,000 companies valued at $3.7 trillion still waiting for an exit. Thirty-five percent of those assets have been held for more than six years. Average holding periods have stretched to nearly seven years, more than double the historical norm. With that much inventory hitting the market as the exit window reopens, the difference between a clean sale and a discounted one will come down to readiness. Not readiness as a project. Readiness as a condition.

The firms that understood this three years ago are already reaping the benefit. EY's 2025 Exit Readiness Study found that 93% of PE professionals say early exit planning improves valuations, and portfolios that use market downtime to optimize for readiness are 58% more likely to achieve faster diligence cycles and stronger valuations when exits resume.

The question isn't whether always-exit-ready is the right posture. The market has settled that. The question is what it actually requires, operationally, to get there.

The Data Problem Nobody Will Admit in a Board Meeting

Here is the uncomfortable truth at the center of every exit-readiness conversation: most PE-backed companies cannot produce the data that buyers actually need.

EY found that 65% of PE firms struggle to fully capture value creation initiatives in their exit EBITDA. That's the single largest obstacle to a successful sale. Not market timing. Not buyer appetite. The inability to prove, in quantitative terms, that value was actually created during the hold period.

Dig one layer deeper and it gets worse. Seventy-two percent of respondents cited the lack of robust data and KPIs to support historical and forecast trends as the biggest challenge facing the finance function during an exit process. Forty-one percent reported insufficient data granularity to support the equity story at all.

These aren't edge cases. These are majorities.

PwC's research exposed the root cause: 54% of PE portfolio company respondents still use an email with an attachment as their primary method of collecting data and responding to sponsor requests. More than a third simply write a text-only email response. The data infrastructure at most portfolio companies isn't a system. It's a collection of habits held together by individual heroics and the institutional memory of whoever built the last board deck.

When a buyer's diligence team shows up and asks for cohort-level revenue retention data segmented by acquisition vintage, or a clean bridge from EBITDA to free cash flow across four fiscal years with consistent accounting treatment, the company either has it or it doesn't. And building it from scratch under diligence pressure is the operational equivalent of trying to learn a language during the oral exam.

This is where always-exit-ready stops being an abstraction. It starts in the data layer. Companies that maintain clean, granular, consistently structured financial and operational data from the moment of acquisition don't just exit more smoothly. They operate better every single quarter between acquisition and exit, because the same data infrastructure that satisfies a buyer also satisfies an operator.

The Finance Function Wasn't Built for This

The second structural barrier is talent, and the data here is equally damning.

Sixty-three percent of respondents to EY's study cited a CFO who has never sold a business as a critical challenge to an efficient exit process. Forty-six percent cited insufficient resources in the finance function as a roadblock. And Accordion's survey found that sponsors identify weak data quality, limited exit experience, under-resourced teams, and insufficient scenario planning as the primary reasons CFOs fall short.

CFOs, for their part, aren't oblivious. They cite bandwidth constraints (49%), fragmented systems (44%), unclear sponsor expectations (36%), and lack of prior exit experience (31%) as their biggest hurdles. These aren't excuses. They're an accurate diagnosis of a finance function that was never designed to simultaneously run the business, satisfy PE reporting requirements, integrate bolt-on acquisitions, and maintain exit-grade documentation.

The typical PE-backed finance team is five to seven people. They spend the vast majority of their time on compliance and consolidation, manually assembling the same reports every month in slightly different formats for different audiences. The PE board wants EBITDA bridges, covenant compliance, and add-back reconciliation. The operating team needs departmental P&Ls and forward-looking resource models. The CFO is expected to serve both, often from data that lives in four different systems that were never designed to talk to each other.

Building an always-exit-ready company on top of this foundation is like trying to run a marathon on a stress fracture. The ambition is right. The infrastructure can't support it.

The fix isn't hiring more people. It's building the data architecture, reporting framework, and process discipline that allow a small team to produce institutional-quality output without heroic effort. That means a single source of truth for financial data. Automated consolidation across entities. A reporting layer that can serve both the board and the operating team from the same data model. And a value creation plan that's documented in real time, not reconstructed from memory when the investment bank engagement letter arrives.

What Always-Exit-Ready Actually Looks Like

Strip away the consultant-speak and always-exit-ready reduces to four operational conditions that a company either maintains or it doesn't.

The equity story is current, not reconstructed. Every material initiative, whether it's a pricing change, a sales team expansion, a system migration, or an acquisition integration, is documented in terms of its financial impact as it happens. The value creation plan isn't a static slide deck from Year One. It's a living record of what was done, what it cost, and what it produced. When a buyer asks how EBITDA grew from $15 million to $25 million, the answer is specific, quantified, and auditable. Not a narrative exercise.

The data is granular enough to survive diligence. Buyer diligence teams don't want summaries. They want the ability to cut the data themselves, by customer, by product line, by geography, by acquisition cohort. Companies that maintain this granularity from day one don't have to scramble. Companies that maintained top-line reporting for five years and then try to disaggregate it under time pressure produce inconsistencies that kill deal confidence.

The finance function can operate without key-person dependency. If one controller leaves and the monthly close collapses, the company isn't exit-ready. If the CFO is the only person who understands the add-back methodology, the company isn't exit-ready. Always-exit-ready means the processes, documentation, and institutional knowledge exist independent of any single individual.

Management can tell the story without a script. Buyers don't just diligence the numbers. They diligence the team. A CEO and CFO who can walk through the business, its trajectory, its risks, and its opportunities with command and credibility signal that the company's performance is real and repeatable. A team that defers to a banker-prepared script signals the opposite.

These four conditions don't require a dedicated exit-readiness project. They require operational discipline that happens to produce exit readiness as a byproduct. That's the distinction most companies miss. They treat readiness as something you do before an exit. It's actually something you are, all the time, or you're not.

The Real Insight: This Was Never About Exits

Here is the contrarian read that the survey data points to but nobody is willing to articulate: always-exit-ready is a proxy for well-run.

The companies that maintain clean data, documented value creation, granular reporting, and a strong finance function aren't doing it because they're obsessed with exits. They're doing it because those capabilities make the business better at everything else. Better at identifying underperformance. Better at allocating capital. Better at integrating acquisitions. Better at making decisions fast enough to matter.

The 97% of sponsors demanding always-exit-ready aren't really asking for exit readiness. They're asking for operational maturity. They're asking for companies that have outgrown the founder's-QuickBooks phase and built the institutional infrastructure that compounds value over a hold period rather than scrambling to demonstrate it at the end.

The 20% of CFOs who already operate this way understand something the other 80% haven't internalized: the work of exit readiness is the work of building a great company. There is no separate track. There is no exit-readiness project that runs parallel to operations. The reporting that satisfies a buyer is the same reporting that gives an operator real-time visibility. The data discipline that survives diligence is the same discipline that catches margin erosion before it compounds. The documentation of value creation that powers an equity story is the same documentation that holds an operating team accountable to its plan.

With over 30,000 companies waiting for a liquidity event and buyers becoming increasingly selective about asset quality, the gap between companies that are genuinely ready and companies that will have to sprint is about to become the most expensive sorting mechanism in private equity. Sponsors estimate the cost at one to three turns of exit multiple. On a $100 million EBITDA business, that's $100 million to $300 million in enterprise value. Not theoretical value. The actual price difference between a clean process and a messy one.

The firms that will capture full value in the coming exit cycle are the ones that stopped treating exit readiness as a pre-transaction workstream and started treating it as the operating standard. Not because they're planning to sell tomorrow, but because the same capabilities that make a company sellable are the ones that make it worth owning.

That's the answer to the "how" question. You don't get to always-exit-ready through a checklist. You get there by building a company that doesn't need one.