The 3X lure that keeps founders from exiting

An advisory firm that survives its early years trades one growth problem for another: the first stage demands prospecting, the middle demands teams and processes, and the last stage, as Michael Kitces frames it in the 198th episode of Kitces & Carl, demands something most owners never put on a calendar—a definition of enough. He and Carl Richards, the client communication expert, discuss the moment when a firm has moved into complex work for higher-paying clients and each new client can pay real money; once firm revenue and valuation carry meaningful consequences, the 3X private-equity multiple hovers over the decision like an invitation to keep going.

Kitces and Richards acknowledge that a founder who privately feels done can still reasonably hate leaving money on the table, and then they trace what happens after that: one more year becomes one more tier of clients, fees, team and revenue, and the founder ends up almost at the end, all the time. The episode's target is not ambition; it is the goalpost problem, a perpetual cycle in which growth is justified for just a little longer and the finish line keeps moving.

The alternative they offer is a purpose test—there is nothing wrong with continuing to build, or with enjoying the challenge of building, they say; what matters is being clear about what the building is for. That clarity turns every new business opportunity into a screen: does this move the firm closer to a stated purpose, or does it just push back the day when that purpose can be lived?

The same two hosts have applied this lens before, most recently to a vacation home, the theory being that a vacation home is a clue, not the goal—what matters is what having it would allow. Here the lens is pointed at the practice itself: what would a larger multiple allow? The answer must be a date, a successor, a kind of work, a way of spending the years after the transaction; naming it turns the growth decision from a math problem with only one variable into a choice with a finish line.

This is an exit-planning conversation because enterprise value follows the owner's own exit rather than standing as a price a seller collects. A practice gains real value when extra revenue advances a known plan—funding a successor, accelerating a sale date, building a platform that can run without the founder—and it gains nominal value when extra revenue becomes the way the owner postpones the succession conversation. The episode's logic points to an uncomfortable test: an owner who cannot say what the firm is ultimately for will probably keep adding clients until a buyer forces the succession decision.

Determine what the business is for before the next opportunity arrives, then ask whether the added revenue moves the owner toward that answer or simply raises the price someone else will pay; Kitces and Richards frame the goal as building a practice that enables its owner to live more of the imagined life. For an owner planning an exit, a firm needs a purpose attached to a date, not just a multiple attached to revenue. A founder who can name the date before the buyer does has a plan; a founder who cannot is still selling years, one goalpost at a time.