Dear BTF Community,
Selling a business is often imagined as a finish line. In reality, it’s a mirror.
That’s what Josh Hotsenpiller, serial entrepreneur and founder of multiple venture-backed companies, learned through years of scaling and selling. From the outside, his trajectory looks textbook: fast growth, strong valuations, multiple exits. But as he told us in his conversation with BTF, the process revealed something few founders expect, how far most businesses are from being truly acquirable.
Now an Operating Partner at Stone Canyon, Josh helps other entrepreneurs prepare for that same moment of truth, turning “profitable” companies into acquirable ones. His advice is as honest as it is actionable.
Key Takeaways for Business Owners:
- Profitability ≠ Acquirability. Buyers look for readiness, not just results.
- Exit readiness takes time. Begin planning at least two years before you think you need to.
- Culture drives value. Growth without people breaks faster than numbers suggest.
- Success is about having options.
Enjoy,
Mark
When it comes to exits, Josh says most founders learn the same hard lesson.
“The hard truth I’ve learned is that it’s harder than you think… You’ll believe your company is acquirable because people start reaching out saying they’re interested in buying. Then due diligence begins, and you realize how far away you actually are from being acquirable.”
Interest doesn’t equal readiness.
A founder can have great revenue and strong EBITDA but still fail the test when investors dig into the fundamentals, what Josh calls the four pillars of acquirability: efficiency, financials, culture, and scale.
“You might be profitable, you might be interesting, but you might not be acquirable at the level you want because you’re really not ready to be acquired.”
The Four Fundamentals Of Exit Readiness
Josh’s framework has become central to how he evaluates and builds businesses today. It starts with operational hygiene and ends with culture.
- Efficiency: streamlined operations, reduced waste, and scalable systems.
- Financials: clean books, strong margins, and transparent reporting.
- Culture: the ability to attract and retain top talent under pressure.
- Scale: durable moats and predictable, defensible revenue growth.
“When strategics or PEs get ready to buy, they look at these four fundamentals and they’re actually hoping they’re not great because it gives them room to grind down your multiple.”
In other words, exit readiness isn’t a one-year scramble but rather an ongoing discipline.
Josh’s rule of thumb: start at least two years out.
“You need to think about a two-year minimum, one year preparedness… It’s housekeeping, it’s hygiene, and nobody wants to deal with it until it’s too late.”
Beyond The First Exit
Josh admits his own definition of success has evolved with each sale.
“With your first exit, success is to exit… As you continue in the journey, your definition starts to become maximizing an exit. Success is building something so healthy, so acquirable, that now you have optionality.”
That shift (from desperation to optionality) is what separates first-time founders from seasoned builders. The best outcome isn’t just selling; it’s creating a company strong enough to choose whether to sell, raise or keep growing.
The Culture-Growth Balance
Rapid scaling, Josh warns, often breaks companies in ways spreadsheets can’t measure.
“You get to a certain scale point and you break. And it’s not because of sales… all of a sudden people start leaving, reviews go bad and scale starts to break down.”
Revenue can hide dysfunction, but not for long.
Leaders under pressure to hit targets often drift into what Josh calls “toxic urgency”, pushing for growth at the expense of people.
“You’re so driven for the revenue, which is good, but you’re not a one-man band. If all these people leave you, you’re not going to get to the scale you want.”
For founders planning transition, culture is a due diligence item. Buyers discount companies with turnover, poor morale or founder-dependent leadership.
Choosing Investors Like Choosing A Spouse
Josh compares raising capital to marriage, one that often demands more time than family.
“You’ll spend exponentially more time with your investors than you do your family… and a lot of times you’re misaligned on human values.”
He recalls an experience with a major VC firm:
“Nobody really cared about people, they cared about growth. And I could toggle between the two, but I’m more of a culture guy.”
The investors who made the biggest impact were the ones who cared beyond the boardroom.
“When one of my investors had his first baby, he sent me a photo from the hospital. We actually became friends… it was aggressive and intense at times, but there was respect.”
For owners raising capital, alignment matters as much as capital. “You’re not just choosing money,” Josh says. “You’re choosing people you’ll live with.”
Identity Beyond The Exit
Josh’s most personal insight may be his most universal. Many founders, he says, lose themselves in the businesses they build.
“You are a human being travelling through this world who happens in this season of your life to interface with this company. It’s nothing more than that.”
That reminder, separating self-worth from the success or failure of a business, has become a cornerstone of how he mentors other founders.
“If your identity is in the business, you’ll always be at a disadvantage as a leader… When the business is gone, your identity shouldn’t change.”
Final Reflection
For Josh, being acquirable isn’t about being perfect, it’s about being prepared.
The founders who thrive through transition are those who start early, build cleanly and protect culture as fiercely as cash flow. Their companies don’t just survive diligence, they attract partners, investors and buyers who value their discipline.
As Josh puts it, the goal isn’t simply to sell. It’s to build something so strong you don’t have to.
Josh brought this perspective to BTF SoCal, joining Mike Milani, Jim Amundson, Eric Hall and Rod Trujillo for 20/20 Vision: Hard Truths & Honest Lessons From the Exit Journey.
The panel delivered exactly what our community values most: unfiltered insights from leaders who’ve lived the deal cycle, learned from it and are now applying those lessons to what comes next.