Lessons every agency seller needs to hear (Part 1)

Lessons from the sharp end. How using a buyer mindset helps you build a better agency whether you want to sell or not. This is part one of a two-part series.

When I meet new people and tell them about the last eight years of my life; starting, funding and executing a buy and build in the creative agency market, they usually ask the same question: “what did you learn?"

Key takeaways

1. The model is the easy bit

2. Closing a deal is the beginning, not the end

3. Earn-outs are psychological contracts

4. Scale does not automatically create value

5. Debt changes behaviour

6. Founder psychology is the hidden variable

What did you learn?

It’s not just new people I meet who ask that question. Anyone who has been involved in the journey probably both gets asked and asks that question of themselves. Whether co-founder, investor, agency lead, senior leadership team, advisor, supplier or board member, we all look backwards to learn lessons for the future.

So, what did I learn?

Hmmm… I’ve had a great deal of time recently to explore that. Not just recent history, but the last 25 years. And the lens for me is not just what have I learned? It’s what have I learned that I can now bring to bear to help others buy, sell or improve their businesses.

That one (slightly long) question breaks down into I few more questions that are, unsurprisingly, introspective. I say introspective because I was the CEO. The leader. The buck stopped with me. And so it is with those I am now advising; they are the leaders. My experience is directly pertinent to them.. and to you… even though the variables surrounding two businesses are never the same.

I bring a recent and active buyer’s view to the market so that you can understand what people like me look for when they come knocking on your door. Shaping a business using a buyer’s mindset helps you build resilience because the number one driver and destroyer of value to a buyer is risk. Reduce risk, increase value.

Building and then reshaping a group teaches you things that are invisible in an Information Memorandum and absent from most sale processes. So, here are the first batch of lessons that have shaped my view of agency M&A.

The model is the easy bit

Spreadsheets can be very seductive. Even highly complicated models involve simplification which risk signalling clarity and the creation of momentum. Followers of my work will know that I am slightly obsessed with momentum (growth + momentum = power).

In a model, synergies are assumed, as are upsells, cross sells and margin. I recently saw an agency model a growth plan in excel. The logic behind the plan was rational: to achieve growth, add seats. But anyone actually in a business like ours knows that seats come after wins, after growth, not before it. Doom lies in hiring ahead of the curve. Assumptions are a necessary evil for an excel model, but they are just that. And, it doesn’t matter how many scenarios you model, unless you are very, very lucky you won’t be modelling reality. There’s a truism in data analysis. The more granular you get, the less accurate you become.

And yet, deals are often justified on that very precision.

The reality inside a business is messier. Growth stalls, a key client leaves, a senior leader resigns. Or, a new hire takes longer to ramp than forecast, cross-selling requires trust that doesn’t (yet) exist and margin expansion meets cultural resistance.

Models assume co-operation and stability. In real life, businesses contain friction and fatigue.

From a buyer’s perspective, this is where risk lives. It’s not in the headline numbers that are so easy to forecast and look achievable. It’s in the distance between assumption and operational truth.

Closing a deal is the beginning, not the end

The real transaction in any M&A deal happens at integration, not before. It’s important that buyers and sellers understand this.

Completion feels like the finish line, but in almost all cases it’s the starting gun.

As a buyer, when I bought a business, what I was really buying was an intention to integrate it. Last time out, I was integration-light, based on personal experience of being integrated clumsily in a previous existence. Each buyer has his or her own strategy when it comes to integration.

Some integrate tightly onto a platform. For example, in October 2025, US marketing group Marketbridge acquired B2B tech marketing agency, Revere. In February 2026, the Revere brand was shuttered, marking the next stage of integration.

This is total integration.

Some integrate the back office, but keep the front of house brands alive in market. I’ve seen a slew of nascent groups acquiring in this way. As a seller, keeping your brand feels so much better and it speaks to a founder’s deeply rooted need for legacy.

This is partial integration.

The point of this isn’t that one model is better than another. They are different and can both work. A heavier integration hand theoretically delivers efficiency, concentrated scale and simplified structure. A lighter integration hand theoretically delivers autonomy, speed and diversification.

Whichever strategy an acquirer adopts, they will be thinking about (and therefore looking at) systems, reporting, finance, HR, brand architecture, leadership structure, client focus, culture. All of it and more. Those are therefore things yo should be thinking about.

Consolidation always takes longer than you expect. But that's not all. Standardisation always creates tension, centralisation improves control but reduces autonomy, founders who thrived on independence can struggle inside structure, even when they intellectually agreed to it. Thus, integration is a cultural undertaking, not an administrative exercise. It's about managing tensions and trade offs.

But there's something bigger than all of this that many miss.

Integration absorbs leadership bandwidth at precisely the moment performance needs to increase. The model assumes uplift, but the messy reality consumes leaders' attention elsewhere. And, if they aren't careful, one plus one quickly equals one.

So, if you are building with a buyer’s mindset, ask yourself this: “how easy would it be to plug my business into a larger platform without disruption”? If the honest answer is “not very”, that's risk. And remember, risk suppresses value.

Earn-outs are psychological contracts

Earn-outs are meant to align incentives. In theory at least, they bridge expectation gaps between buyer and seller. But, in practice, earn-outs are layered with emotion and each side often frames them completely differently.

• A buyer sees a performance-related earn-out as a way of managing future risk;

• A seller sees an earn-out as a way of being paid for the agency they created.

One is future, one is past. One is anticipation, the other is expectation. One feels like an earned reward, the other like an earned entitlement.

Thus, before the earn-out even starts, there’s a mismatch at a conceptual level. Then the behavioural impact becomes real. A founder who controlled every decision suddenly requires approval for investment. A finance team managing debt covenants becomes cautious about cost. Growth targets that felt achievable at signing feel different eighteen months later when context has changed.

And so it is that disputes are born.

Disputes rarely begin with bad faith – everyone’s aligned with the logic and the mechanism when a deal closes. Disputes begin with divergence: divergence in priorities, divergence in time horizons, divergence in definitions of success.

I have seen many earn-outs succeed. I have also seen them strain relationships that began with optimism and mutual respect.

If you are building towards a sale, understand this: alignment at signing is not alignment in year two. The more exposed your future payout is to factors outside your control, the more risk you carry. Buyers understand this deeply. Sellers sometimes underestimate it. But remember too that it's a two-way relationship and the best way of securing success is never to over-sell.

Debt changes behaviour

We think about debt (leverage) purely as a financial instrument. It’s a useful way of funding growth without diluting shareholders and, because it delivers a higher rate of return to shareholders, it can support higher valuations which benefit sellers. Win/win?

Not always.

Debt also shapes culture because whether debt sits above a group, or in a vendor-financed acquisition, it changes behaviour. Risk appetite tightens. Investment decisions slow. Scrutiny increases. Forecast accuracy becomes non-negotiable, especially where debt covenants govern a deal.

Many agency owners proudly say they’ve never used debt, as though debt is somehow shameful or undesirable. Not to my mind. Debt in itself is not inherently negative. The discipline associated with taking it can be healthy and it can boost returns too, but it alters the operating environment. That’s what we all need to understand.

The question about debt isn’t whether it is inherently good or bad. It’s neither. The real question is, do we understand the impact taking debt will have on the culture and freedom to operate in our business?

If you are selling into a leveraged structure, you're selling into a capital structure, not just into a brand or a leadership team. Here's the takeaway: capital structure is strategy in disguise, because covenant headroom influences decisions in ways that are invisible externally.

So, as a seller, you need to understand what you are stepping into. It’s time to look at your priorities. A high headline multiple funded by aggressive leverage may look attractive, but the lived experience can feel very different. Let me put that another way. If you’re selling an agency at a price, on a future promise that is hard to deliver and in a structure that relies on that performance to make good on that price, you better deliver on the promise. Or be disappointed.

Scale does not automatically create value

Aggregation is easy to describe, but it’s much harder to execute. Combining agencies increases revenue but it also increases complexity almost exponentially with every addition. More reporting lines. More personalities. More systems. More politics. etc etc etc

Complexity grows faster than margin and in the medium term, that means drama.

In a founder-led agency, decisions are fast because they are concentrated. In a group, unless you redesign decision-making deliberately, speed reduces. And when speed reduces in a creative business, performance often follows.

From a buyer’s mindset, I learned that scale only creates value when supported by systems and leadership depth, otherwise it simply magnifies existing weaknesses. Which brings us back to integration.

If an agency resists integrating on any level, they are rejecting the very things that should be enabling future success. They are compounding complexity, deliberately refusing the scale benefits available to their business and putting their colleagues at risk.

Scale on its own does not create value and it won’t help you realise yours either. Scale only makes sense if you embrace the benefits. Behind every failed earn-out there’s a clash of integration. Here's the simple ,and stark takeaway: if you don’t want to integrate, don’t sell. If you're being told "you don't need to integrate (ever)", beware.

Founder psychology is the hidden variable

Financial, legal and commercial due diligence are expensive, but they are not difficult. Culture appraisal used to be an issue, but there are mature tools for assessing cultural fit and potential clashes. What due diligence rarely interrogates with the same discipline is the psychology of the founder. My experience over 25 years is that, in agency transactions, founder psychology is often decisive.

When a buyer evaluates a business, they should be assessing more than revenue quality and margin potential. They should be assessing adaptability, tolerance for structure, appetite for shared control and resilience under constraint. They should be asking whether the founder who built the agency will be able to operate effectively within a broader system.

If you are not being asked these questions, ask them of yourself. You may believe you are selling your business. Actually, you are also selling yourself into a different operating context.

Some founders flourish after a sale. They value the access to resource, the removal of administrative burden and the ability to focus more narrowly on clients and growth. Others find the transition more complex. Reporting cycles feel intrusive. Governance feels restrictive. Decision-making slows. The very independence that once drove success becomes harder to exercise.

Neither reaction is inherently right or wrong. But one is more compatible with a group structure than the other.

From a buyer’s perspective, founder dependency is risk. Cultural inflexibility is risk. An unwillingness to evolve operating style is risk. If too much value sits in one individual, that concentration depresses transferability and therefore valuation.

Building with a buyer’s mindset means deliberately reducing that dependency over time. It means developing leadership depth, institutionalising client relationships and ensuring that performance is not contingent on a single personality. Those disciplines increase value in a sale process, but they also increase resilience if no sale ever occurs.

Concentrating decision making concentrates risk, slows decision making and leads to average performance. If you’ve hired well, trust your team to run the business, to make the decisions to operate the systems you’ve built.

Next time

In part two, I'll be talking about these things:

1. Why not every business should sell

2. Why valuation is rarely the most important variable

3. How a deal structure impacts your life

4. How a buyer's mindset can help you build better

5. When buying makes more sense than selling