P97, an Emerald portfolio company, was recently acquired by PDI Technologies. Several LPs have asked: How does Emerald think about exits? When do we know it’s time? How do we prepare? And how do we consistently create value — especially in a market where outcomes are harder to come by?
Let me share our perspective.
Start with the end in mind:
A piece of advice I got early on — and still follow — is: don’t invest unless you know how you might eventually exit. That’s not to say you can predict the future, but it’s important to understand the landscape from day one. When we’re first considering an investment, we look at who the likely buyers are, what comparable transactions look like, and how active the space has been.
From there, we update our thinking regularly — usually every couple of years we’ll share an updated exit landscape with the board. It’s not about pushing a process. It’s about being ready for the unexpected: a speculative inbound offer, often with a short fuse and vague terms. That’s when it’s crucial that the board already has a shared view of what “interesting enough to explore” looks like.
Know who’s actually doing the buying:
Exits don’t start in M&A — they start in business units. It’s usually a product or commercial leader who sees the value and starts pushing internally. So when we think about potential acquirers, we try to go one level deeper: which BU would benefit most from this company? Who in that org might champion a deal? What’s the internal politics like? Who are the gatekeepers? Who do they listen to?
We also try to understand how each acquirer frames their story to their own shareholders. They’ll often look at very different metrics — even within the same sector. To get real engagement, you have to reflect back what they care about, not just what you think is impressive.
There’s a great case study about how the Waze-Google deal came together that really captures this dynamic. It’s worth a read if you haven’t seen it.
Preparation isn’t glamorous but it’s essential:
We’ve learned the hard way that you only have a small window to respond when something materializes. That’s why we put in the work well in advance — data room, clean financials, up-to-date model, legal cleaned up, and advisors we trust on standby. It’s not exciting, but it matters.
Speaking of advisors — they’re not cheap, but the good ones more than earn their keep. Buyers aren’t in the habit of overpaying, and the only real way to create price tension is through competition. A strong advisor helps shape the narrative, brings real-time intel, and runs a tight process so the management team can stay focused.
What buyers look for:
Every process is different, but the best outcomes tend to come when a company is strong across a handful of areas: large and growing market, differentiated product or IP, good revenue quality and growth, strong margins, and a capable leadership team. These things aren’t built overnight — they’re the result of years of focus and iteration. But when they’re in place, you usually have options.
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Most exits don’t look like a fairy tale. They start awkwardly, at the wrong time, with the wrong number. But if you’ve done the work and stayed close to the right people, you can turn that moment into something meaningful — for founders, employees, and investors.
More on Emerald exits:
Emerald portfolio company P97 acquired by PDI Technologies
Emerald portfolio company Rhombus Energy Solutions acquired by BorgWarner