Bill Canady breaks down how a $6 million EBITDA gap becomes $60 million in enterprise value, and how a 1-3% equity stake in a $500 million deal returning 2.5x pays out $3-9 million at exit, but only if you stay in the role. The math has to be clear and defensible, and the whole team has to actually follow the plan.
You can walk into a room full of people who do this math for a living and show them arithmetic instead of a story. And most people in that chair never can. Say your gap is $6 million of EBITDA. At your multiple, that's about $60 million of enterprise value. That's what your board is measuring, not your effort. And if you hold 1 to 3% of equity on a $500 million deal returning 2.5 times, your stake is somewhere between $3 and $9 million at exit. If you hold 1 to 3% of equity on a $500 million deal returning 2.5 times, Your stake is somewhere between $3 and $9 million at exit, and it's zero if you're replaced in month 14. What changes is that you now can defend it. You understand it. You can walk into a room full of people who do this math for a living and show them arithmetic instead of a story. And most people in that chair never can. An excellent plan nobody follows is useless. An okay plan that everyone buys into, you can conquer the world with.
