80% of Tech Services Firms Won’t Maximize Their Exit

Why and What to do About it

Across fragmented tech service sectors (Mobility Management, TEM, MSPs, and IT resellers) one pattern keeps repeating itself: Most founders won’t realize the full value of their business.
 
Bain & Company notes that in fragmented, founder-led service industries, only about 15–20% of firms reach scale or professionalization sufficient to command strategic or premium valuation multiples. The rest are stuck: solid businesses with loyal clients, but no infrastructure, capital, or go-to-market scale.
 
According to Deloitte, these companies often fall into the “lifestyle trap”. I.E. generating owner income, but lacking the systems, team, and growth engine to compete or consolidate. They aren’t broken, but they’re not built for transfer value.

The Reality for Many Founders in 2025

  • No succession plan or professional leadership team
  • Little to no investment in sales, marketing, or product innovation
  • No buyer-ready financials or scalable infrastructure
  • No clear growth trajectory, organic or acquisitive
  • No capital

Even when these firms have valuable IP, loyal customers, or regional strength, they’re typically not platform or even tuck-in-ready! And they’re definitely not going to command premium valuations without making a strategic shift.

So What Should Founders Do? We’ve all heard and know that “hope is not a strategy”, but what is the strategy for a firm in this position? If you’re a founder in this situation, you still have options. But time is not your ally. Valuations are increasingly flowing to the top 20%—the ones who are ready. To get ready you can:

  1. Professionalize! Invest now to professionalize your business so it can scale—even a little.
  2. Understand the Market Better: Understand the voice of the customer, your competitive position in the market. Begin to think about how to position your company as a critical enabler or entry point for a buyer—not just a small shop.
  3. Understand your Boundaries: What are the constraints or hold the firm back? What are your enablers that propel it forward? More on Boundaries in another email article.
  4. Build a strategy that can be successfully executed (see below)

Strategy, Execution, and Exit.

At Falcon, we’ve developed a proprietary Wealth Realization Framework designed specifically for founders in fragmented ecosystems. It includes:
 
  • Readiness Assessment: Where your business really stands, through the lens of the most sophisticated buyers, and what to do to improve.
  • Strategic Visioning & Positioning with an Execution Plan: Build out a fact-based business plan and execute it. We can share a framework.
  • Buyer Alignment: Connecting you with the right capital partners and strategic acquirers—who know how to build from what you’ve started. These need to be properly vetted!
  • Creative Deal Structuring: Including equity rollovers, staged exits, and tax-efficient monetization strategies.
And importantly…
 
Falcon’s Strategic Advisory Service.  Our Strategic Advisory Service is for founders who want more than a transaction. We help CEOs:
 
  • Set the plan (growth, readiness, and eventually exit. At Falcon we always say, “your best exit plan is a growth plan.”
  • Work the plan with operational milestones and financial preparation
  • Adapt the plan in real-time as conditions change—because they always do
  • Build value! Become an attractive asset to buyers
Whether you’re 12 months from an exit or still building toward it, Falcon provides the structure, pressure-testing, and execution rigor that most lifestyle businesses lack but desperately need to unlock value.
 
In fragmented markets, scale will be bought or built. If you’re not investing in professionalization, someone else is. And they may own the future you helped create. You don’t need to be the biggest to win. But you do need to be positioned, prepared, and guided.
If you’re a founder navigating this challenge, let’s talk. Falcon Capital turns strong but underleveraged businesses into wealth events through strategy, execution, and smart exits.
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