L2 Exit Multiple Framework

Scott Galloway shares how he strategically built and sold his company L2 by following specific criteria known to achieve higher exit multiples.

"I did a lot of analysis based on a study that showed the common features of companies that got sold in the top decile of valuations. I literally shaped the business model around these findings. I opened a London office right away. Instead of charging consulting fees, I said 'pay me a quarter million a year and I'll answer your toughest questions using data.'

We focused on luxury and consumer brands. I raised $17 million to create technology and scraping tools so we could collect more data points than anyone in the world. When the inevitable guy from analytics came in with his arms crossed to play gotcha, they couldn't argue with our data.

I was very focused on exit. My basic pitch to people was 'You're gonna work your ass off and I'm gonna try and get you to where your parents were 20 years earlier. If you're looking for balance, this isn't that place.' We were a small business going all in to try and create economic security for us and our families.

We ended up selling for 8 times revenue - $160 million."