The exit problem nobody warns you about when you build a people business
Founders of specialist service firms are told to build for an exit. Very few are told how narrow the exit options actually are, or what to test before they sign one.
Most founder advice assumes a liquidity event exists at the end of it. Build the business, professionalise it, find a buyer. In technology that logic mostly holds. In a people business, and recruitment is the clearest example, it breaks down at roughly the point the founder starts thinking seriously about leaving.
The pressure is building. Permanent placements in the UK stabilised in July, ending a 45-month downturn, according to the KPMG and REC UK Report on Jobs. RSM recorded 36 UK recruitment and workforce solutions transactions in the first half of 2026, and noted that the vast majority of sellers were privately owned, founder-led businesses. A long downturn has brought a generation of owner-managers to the same conclusion at the same time: I have built something real, and I do not know what happens to it next.
Three doors, and two of them are usually shut
When a founder of a specialist service firm looks at their options, there are effectively three.
Private equity: Sub-scale service businesses rarely clear the threshold. RSM found that around four in five private equity deals in the sector were add-ons to companies already owned rather than new investments. If your business is not already someone’s bolt-on candidate, the call does not come. When it does, the
structure usually involves an earn-out that keeps the founder working under a new owner with a fixed exit horizon behind them.
A trade sale: Trade buyers were the dominant exit route in the first half of the year, which sounds encouraging until you consider what most trade buyers want. They are buying capability, not continuity. The brand goes, the systems go, and the founder is retained for long enough to hand over the relationships.
A management buyout The default, and the most expensive one to get wrong. A self-funded MBO means the founder is paid out of the profits their own team generates, slowly, over years, with the risk sitting on the balance sheet of a business that still has to trade through cycles. It caps the value of what was built and ties the founder to the outcome long after they wanted to be free of it.
None of these are scandals. They are structurally poor fits for a business whose value is a group of people with client relationships and specialist knowledge, who can leave whenever they want.
What a real exit has to solve
If you are a founder heading into a conversation with a buyer over the next two years, the useful question is not what multiple is on the table. It is what the structure protects.
Does your brand survive? In specialist markets the name is a credential. If the plan is to retire it, the buyer has priced relationships they are about to devalue.
Does your team keep operating as a team? Integration timetables are where retention goes to die. Ask what changes in the first ninety days, and then ask what changes in month thirteen.
What do your best people actually get? This is the part founders raise last and should raise first. Your billers are the asset. If there is nothing in the deal for
them, you have sold an organisation chart and the people in it will work that out quickly.
How long does the buyer intend to own it? A buyer with a fund life has a scheduled reason to change your business. A buyer with no exit horizon does not.
A different structure
There is a model designed around those answers, and it is worth naming properly because the sector keeps describing it with borrowed language.
Decentralised acquisition means buying a profitable owner-managed business with no intention of integrating it. The company keeps its name, its management team and full autonomy over day-to-day operations. What sits behind it changes: permanent capital, group finance and back-office support, access to capital markets, and equity incentives for the people who bill. Permanent hold means exactly that, no fund life and no requirement to sell the business on.
The second half matters as much as the first. Earned ownership means performance-based equity granted against revenue, profit and long-term value, rather than handed out on day one. For a founder, that converts the hardest part of an exit, keeping the team intact through a change of control, into something the team has a reason to want.
XCE is a UK-listed international executive recruitment group. We acquire profitable owner-managed recruitment firms, hire revenue-generating billing consultants, and strengthen the balance sheet through an integrated Bitcoin treasury. Our first acquisition, James Gray, kept its name, its leadership and its way of working. On a combined and unaudited basis it had revenue of £1.79m, growth of 21.5% and EBITDA of £431,000, nearly doubling our headcount along the way.
I built a recruitment business before I built this one, so I am not neutral about the problem. Founders are told to build something valuable. What nobody explains is how few buyers are structured to keep it valuable once it changes hands. That is solvable, and it is worth solving before you are in the room.
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