10 Steps to Prepare Your Subscription Business for a Successful Exit—Whether Acquisition or IPO

It’s not the best time to sell your subscription business, at least for those of us who are not deep into AI.  

But if you have plans at some point to take your subscription business to the next level through an acquisition or IPO, now is the time to prepare. Whether you're aiming to attract investors or potential buyers, the goal is to demonstrate a sustainable, scalable, and predictable business model that delivers ongoing value.

Here are 10 essential steps to set yourself up for a successful exit:

1. Focus on Recurring Revenue Health

Buyers want predictable, high-quality revenue. Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), and retention rates must be strong and steadily growing. Demonstrate a loyal and engaged member base, not just a collection of transactions. This is probably the most important thing you can do.

2. Drive Customer Lifetime Value (CLV) Growth

Build your business around maximizing long-term relationships. CLV indicates that your customers are valuable. A high CLV-to-CAC (Customer Acquisition Cost) ratio signals that your model is sustainable and scalable.

3. Ensure Financial Transparency and Audit Readiness

Subscription businesses require clean, accurate financial reporting. Be prepared with audited financials that demonstrate solid unit economics and align with industry standards.  Don’t wait til the last minute to bring in a top-tier advisory team—get a good accountant and a good lawyer now, not later!

4. Strengthen Engagement Strategies

In the Membership Economy, retention is the true indicator of value. Track engagement, and invest in features and tactics to keep members coming back. Start with onboarding. Investors expect high Net Promoter Scores (NPS), and low churn rates. Retention is a lagging indicator—engagement is a leading one.

5. Once You Know the Model Works--Scale

Show that your subscription model can scale efficiently. Many subscription businesses achieve early success by focusing on a single benefit, industry, or use case.  But from there, have a plan showing how and where you can grow. New features, new markets, new products…but remember the pieces need to fit together!

6. Cultivate a Strong Leadership Team

A great subscription business needs a leadership team that understands the nuances of recurring revenue. Make sure your team invests in and believes in the fundamentals that drive subscription success.  

7. Get Your Systems in Order

A seamless member experience depends on robust systems and processes. Ensure your technology stack supports scale, automation, and data-driven decision-making. Now is a good time to start talking to tech vendors, analysts, and your peers.  You do have a peer group that you trust, don’t you?

8. Get a Lawyer!

Subscription businesses have unique legal challenges, from recurring billing regulations to data privacy laws like GDPR and CCPA. Changes in administration lead to changes in the rules, and you need to be on top of what’s required. Getting ahead of compliance issues and ensuring contracts and policies are airtight will prevent last-minute hurdles. It’s also the ethical way to run your business.

9. Strengthen Brand Positioning and Market Presence

Your brand is more than a logo; it’s the promise you make to your subscribers. Investors and acquirers want to see a strong, differentiated brand with a clear value proposition that resonates with members and stands out in the market. It’s not always logical, but it seems that if their friends and family know about your company, investors are that much more interested.

10. Develop a Strategic Exit Roadmap

It’s never too early to be thinking about the outcome you hope for.  This advice might be counterintuitive as many entrepreneurs will tell you that they just focused on the fundamentals and the exit went smoothly.  I have found this to be the exception, not the rule.  Talk to others who have gone through the process, as well as to “friendly” investors, and see what happens when you “work backward”.

For more ideas on driving a successful exit, check out my 🎧 podcast episodes with John Warrillow, author of The Automatic Customer and The Art of Selling Your Business, and with serial CFO Steve Cakebread on taking SaaS businesses public.

About Robbie Kellman Baxter

Robbie helps companies leverage subscription pricing, digital communities, and freemium models to build deeper relationships with customers.

Over the past 23 years, she has worked with over 100 organizations in over 20 industries like the National Basketball Association, Hagerty, The Wall Street Journal, Microsoft, and Ingram Micro.

As a keynote speaker, Robbie presented globally at major conferences, association meetings, trade shows, and elite universities as well as to private audiences at many of the world’s most well-known companies.

Robbie has developed and led over a dozen courses for LinkedIn Learning including Become an Entrepreneur Inside the Company and Sales: Customer Success.

She hosts the podcast, “Subscription Stories”, where she sits down with business leaders to discuss how they’re using subscription pricing and membership models to redefine the biggest industries and generate predictable recurring revenue. She also developed and taught nine video courses for LinkedIn Learning on business topics ranging from innovation to customer success and membership.

Robbie’s first book, “The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue”, anticipated and defined the massive transformation from ownership to membership and the rise of subscription pricing. It was named a top 10 marketing book of all time by BookAuthority.

Her second book, “The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave" takes readers through every step of the subscription business process – from initial start-up or testing of a new model to scaling the operation for long-term growth and sustainability.

Prior to launching Peninsula Strategies, Robbie was a strategy consultant at Booz-Allen & Hamilton, a New York City Urban Fellow, and a Silicon Valley product marketer. She received her MBA from the Stanford Graduate School of Business and graduated with honors from Harvard College.

Find Robbie on Instagram @robbiekellmanbaxter, and on Facebook @robbiekellmanbaxter.

To get Robbie's "3 Tips for Onboarding New Subscribers", click here.

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