Your buyer is already asking the AI question

Are you getting your business ready to sell by fixing everything a buyer would have asked about ten years ago?

Clean books. No customer bigger than a fifth of revenue. Leases in order, key staff on contracts, a manager who can run the place without you.

All of it matters, and all of it is table stakes now.

The question sitting at the top of the buyer's list is a different one. Could a machine do what this business charges for, cheaper, within a few years?

Most owners have never asked it of their own business. The buyer will ask it in the first meeting.

And this is not a technology-company problem. Bookkeeping practices, recruitment firms, marketing agencies, call centres, training providers — anyone who sells hours of thinking, writing or answering is in the frame.

Few owners I speak to about an exit have run it even once.

Ask the buyer's question before the buyer does

The fix is simple to say. Run the buyer's AI question on your own business before you go to market, and put the answer in the information memorandum.

This is no longer a fringe concern. Bain & Company's M&A report in January this year found that one in five strategic dealmakers had walked away from a deal because of what they expected AI to do to the target's business.

That is not a line item. That is a door closing.

Here is why going first matters. A risk the buyer uncovers becomes a reason to reprice everything else they were told. A risk the owner names, with numbers and a plan beside it, becomes one paragraph in a long document.

So take last year's revenue and break it into its real lines. Then sort each one honestly.

• A machine could do it cheaper. Drafting, summarising, scheduling, routine answers, anything where the customer pays for an output rather than a person. Mark it and size it.
• Protected by relationships. Revenue that exists because of years of trust between specific people. Real, but only if it transfers — which means it cannot all run through you.
• Protected by licences. Work that legally needs an accredited person or a permit to perform. A machine can assist, but it cannot hold the licence.
• Protected by physical assets. Rooms, vehicles, sites, equipment. Nobody downloads a building.
• Protected by trust. Where the customer is paying for someone to be accountable when it goes wrong.

Then write the page. What share of revenue sits in each group, what you are already doing about the exposed lines, and where AI is lowering your own costs. An exposed line you are running with fewer hours is a margin story, not just a threat.

The honest objection is that nobody can forecast AI with any precision, and some of your lines are genuinely exposed. Naming them will not make that go away. It decides who frames it.

Named by you, it is a risk. Found by them, it is a discount.

Chegg lost half its value on one sentence

Chegg sold homework help to students by subscription. On its first-quarter earnings call in May 2023, the company beat expectations on revenue and earnings. Then chief executive Dan Rosensweig said student interest in ChatGPT had spiked since March, and that it was now "having an impact on our new customer growth rate."

Chegg cut its revenue guidance. The next day, CNBC reported, the shares fell forty-eight percent. Rosensweig went on air to call the reaction overblown.

By October 2025, Chegg was cutting forty-five percent of its workforce and blaming the new realities of AI.

The business did not break on a Tuesday. The quarter it reported was better than forecast, and ChatGPT had been public since November.

The exposure had been sitting in the business model for months. What changed that day was that the company named it, late, with an answer that was not yet ready.

That is what a buyer's due diligence looks like for a private business. It happens across a table rather than on a stock exchange, but the mechanics are the same.

The risk was always there. The price moves when someone names it — and if that someone is the buyer, they name the number too.

Why I am recommending it

I do this before every sale and every raise, and I have for years.

I have raised more than $65 million across three rounds for companies I worked with. What that teaches you is that every investor arrives with a question they have not asked yet.

The question is different each time. The pattern is not.

When the answer is already in the deck, the meeting moves on to the next page. When the investor has to dig for it, the meeting stops there, and every number after it gets read with suspicion.

A sale is the same conversation with a larger cheque at the end. So before anything goes to market, I sit down and write the hardest question I would ask if I were buying. Then I answer it in writing, where the buyer will find it on their own.

It rarely makes the business look perfect. It makes the owner look like someone who already knew.

Do this before Friday

Print last year's revenue, broken into lines. Beside each one write a single word: machine, relationships, licence, asset or trust.

For every line marked machine, write one sentence you would be comfortable saying to a buyer about it.

If you cannot write that sentence by Friday, you have found the first page of your information memorandum.