Confidence Isn’t a Valuation Strategy

Hey, it’s David

Welcome back to M&A from the Plane, quick stories and insights drawn from the many miles I log in the air talking to business owners, founders, and dealmakers.

We were recently introduced to a business…

From the outside, everything looked dialed in; confident founder, clean branding, compelling story.

Inside the business? A very different picture.

I Thought the Forecast Was for Clear Skies Ahead…

I was sitting near the front of the plane on a recent flight when the guy behind me leaned in to talk to his colleague with a high level of energy.

“We’re going to get 12x easy. We just refreshed the brand, added some automation… The story’s tight.”

Then came the question:

“How’s the EBITDA trending?”

Silence. Then a pivot.

It felt like the smooth flight just hit clear air turbulence.

The Numbers Didn’t Back the Narrative

The company we were reviewing had many of the same signals:

• Clear founder vision

• Brand refresh complete

• Sharp-looking pitch deck

But the financials told a different story:

• Revenue was slipping

• Cash flow was inconsistent

• Inventory was out of sync with demand

• Working capital was tight

• Key customer concentration was high

Valuation expectations weren’t based on performance, they were based on belief.

And here’s what we tell founders all the time:
Buyers don’t pay for potential. They pay for proof.

This is the crossroad where stories break or get built:

1. Stick with the narrative and hope the buyer connects the dots.

2. Or rebuild the core and let the numbers do the talking.

We recommended the second.

Why?

Because the best multiples aren’t achieved through branding, they’re earned through performance!

The Bottom Line

In aviation and M&A, confidence doesn’t get you off the runway. The instruments do.

Valuation is built, not wished.

If you're looking to exit or even just improve your position, we can help you pressure-test the narrative and bring it back to what buyers actually buy.

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Thank you!

David