How should a sponsor prepare a portfolio company for exit?

Exit preparation should start before a formal sale process so the company can tell a credible performance story. For sponsors, operating partners, board members, and portfolio company management teams, the practical answer is to treat the question as part of post-close handoff, KPI ownership, board cadence, cash control, value creation initiatives, management accountability, and exit preparation, not as a one-off definition. The record should show the value creation plan, board materials, KPI dashboard, budget, variance commentary, initiative tracker, lender reports, and risk log so an investor, lender, counsel, administrator, or operating lead can reconstruct the decision later. Build an exit readiness checklist that covers quality of earnings, customer data, legal cleanup, management presentation, growth story, and buyer diligence evidence. The common failure mode is waiting for a banker process before fixing reporting gaps that buyers will eventually price or diligence heavily.