Secrets to a Seamless Sale: Pet Industry Exit Strategies

As an advisor, mentor, and investor in the pet industry, I’ve learned a lot about preparing for a successful exit. I recently attended the 7th Annual Pet Connect USA Summit in LA, hosted by Kisaco Research.

Similar to the past five summits I’ve attended, this year’s event offered valuable insights, including a new startup-focused session before the main conference. Here’s what I learned…

🤔 | Plan with the End in Mind

Exiting successfully begins long before you’re ready to sell. As Robert Diamond of Identicare.com advises, a strong business model is non-negotiable. Potential buyers will scrutinize every aspect of your operations, so build with value creation at the forefront. Define clear KPIs — such as ARPU (average revenue per user) — and let these metrics guide decisions. Transparency is crucial; hidden issues will surface, so disclose them upfront to build trust.

Market timing is unpredictable, as Charles Walder of Lincoln International reminds us, but staying flexible and acting efficiently can mitigate the risks. Time kills deals, so once you’re ready, move quickly yet strategically.

🫱🏼‍🫲🏻 | Know Your Buyer and Team

Understanding your buyer’s perspective is essential. Strategics, like Andrew Petz of 301 INC/General Mills, evaluate businesses through their unique lens. Ensure your team is prepared to validate your numbers and narrative, with subject matter experts supporting key claims.

As Richard Kestenbaum of Triangle Capital LLC highlights, the best exits come from founders who listen well and remain balanced in growth. Don’t push too hard for an inflated valuation; instead, focus on creating long-term value. Fear of a “pump and dump” can deter buyers, so maintain credibility at every step.

💰 | The Role of Transparency and Tax Planning

Transparency is the cornerstone of a successful exit. Whether resolving litigation or addressing operational challenges, honesty fosters trust. Steven Garlock, Partner at Thompson Coburn LLP, stresses the importance of resolving potential legal challenges and investing in intellectual property protection early.

Tax implications can derail a deal if overlooked. Collaborate with advisors to understand the financial impact of your exit and structure the deal in a way that aligns with your goals. Earn-outs, while tempting, often favor buyers, so proceed with caution.

👀 | Focus on Value and Scalability

Pet care trends like insurance, wellness, and personalized diagnostics underscore the industry’s growth potential. Leaders like Kirk Haggard of Independence Pet Group emphasize the importance of scaling strategically. Buyers want to see margin expansion and scalability to support your projections.

DNA testing and pet insurance, as noted by experts like Caitlyn Bruns and Dirk Beeckman, are rapidly evolving. Entrepreneurs who innovate in these areas position themselves for premium valuations. Similarly, the rising demand for credit and financial tools in pet care, highlighted by Sarah Nash of Independence Pet Holdings, represents untapped growth opportunities.

🧠 | Don’t Overthink the Exit

Adam Hanft, a well known public board member, trusted advisor, investor and published author warns against “exit obsession.” He has observed that the most successful entrepreneurs focus relentlessly on the business, on executing the vision. They refuse to be distracted by imaginary or prospective pots of gold at the end of the proverbial rainbow. Chicken-counting is the enemy of success.

What’s more, as a business evolves and the environment changes, new acquirers emerge as possibilities that could not have been contemplated earlier.

🙀 | The Emotional Aspect of Exiting

Finally, exiting a business is as much an emotional journey as a financial one. As Steven Garlock reminds us, letting go can be heavy, especially for founders deeply connected to their mission. Surround yourself with trusted advisors to navigate both the technical and emotional complexities.

🚀 | Great. Now what?

Adopt a people-over-profits mindset. While a great idea is essential, people ultimately buy from people. Invest in your team, address issues directly, maintain transparency, and understand the financial landscape — including tax implications and strategies to maximize value for yourself and your investors.

At the end of the day, change is one of life’s only constants. Embrace the reality that even the most carefully planned exit will have its imperfections. Be perfectly imperfect.