The trap of building for an exit: why optimizing for sale often destroys value

In this conversation, serial entrepreneur Dominic Marchant dismantles the conventional wisdom surrounding agency exits. He argues that the obsession with building to sell is flawed, as it leads owners to prioritize superficial metrics over the actual health of the business. By focusing on profitability, client outcomes, and employee satisfaction, Marchant shows that the most attractive businesses are those built without an exit as the primary goal. For agency owners, the path to a high-value acquisition is found in operational excellence and creative differentiation, not in engineering a balance sheet for a buyer. This analysis provides a blueprint for leaders to stop masquerading as growth machines and start building durable, high-impact organizations that hold value across market cycles.

The hidden cost of the exit-first mindset

Marchant’s experience across three agency exits reveals a recurring pattern: owners who treat their business as a vehicle for a future sale often sacrifice the elements that create long-term enterprise value. By prioritizing growth targets and Excel-based metrics over culture and creative quality, they create an unsustainable environment.

The danger is that this focus becomes the new normal, a baseline of stress and overwork that leads to burnout. Marchant notes that the most successful businesses are those where owners stop trying to be polymaths overseeing strategy, client services, and creative, and instead focus on their core expertise.

> If you think about selling your business and you are planning to sell your business, you have probably gotten it wrong. If you think about building the business as best as it can be so that your profitability is as high as it can be, your client feedback is as good as it can be, that your employee feedback is as high as it can be, then that is a much better way of thinking about where you need to be.
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When owners treat the business as a product to be perfected rather than a commodity to be offloaded, they build a moat. This separation of the owner’s ego from the agency output allows for the professionalization of leadership, which is what sophisticated buyers look for.

Why AI efficiency is a false economy

The industry obsession with using AI to increase speed is a strategic error. When agencies focus purely on efficiency, using AI to do the same work faster, they commoditize their own output. This creates a race to the bottom where clients eventually realize they can bring that faster production in-house.

The true competitive advantage lies in using AI to achieve outcomes that were previously impossible. Marchant argues that the 80-20 split, where 80 percent of the value is the clever thinking and only 20 percent is production, is shifting. AI is accelerating the production side, making the human element of clever thinking the only remaining source of true differentiation.

> If you are the arbiter of what good looks like and you think that is good stuff then you shouldn't be selling that to clients. You know, clients are employing agencies quite often to be the arbiters, the judge of what good looks like.
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> -- Dominic Marchant

The downstream consequence of AI slop is a loss of trust. Agencies that prioritize speed over taste are training their clients to devalue the agency role, leading to the in-housing trends that many firms fear.

The long-term payoff of radical transparency

Marchant’s approach to his exits, specifically his decision to share the proceeds of the sale with employees, acts as a system-level intervention. By distributing capital to the team, he transformed the goodwill of the acquisition into a tangible benefit for those who built it.

This creates a self-reinforcing loop: employees are incentivized to stay through the transition, the business maintains stability during the earn-out period, and the owner avoids the resentment that often follows a high-profile exit. It is a counter-intuitive move that prioritizes long-term reputation over short-term personal gain, safeguarding the agency future even after the founder departs.

Key action items

• Audit your leadership role: Over the next quarter, identify one function you are currently overseeing that you are not the expert in. Delegate this to a team member who is about right for the role, rather than waiting for them to be 100 percent ready.
• Shift from speed to outcome metrics: Stop pitching AI as a way to lower costs or increase speed. Over the next 6 to 12 months, reframe all AI-driven proposals around how the technology enables higher-quality creative that produces measurable behavior change.
• Establish a point of differentiation: If your agency differentiator is only your people or your culture, you are vulnerable. Spend the next 30 days codifying a specific, data-backed methodology that provides proof of value beyond opinion.
• Structure for goodwill: If you are planning an exit, model a profit-sharing structure for your employees into the initial consideration. This creates a culture of ownership that pays off in retention and performance during the high-stress earn-out period.
• Audit your normal: Evaluate your current work-week baseline. If you are regularly working weekends, recognize this as a systemic risk to the business. Implement safety guards, such as hiring or process changes, to bring the workload back to a sustainable, high-performance level.