There’s a friend of mine, a successful entrepreneur, who sold his business in an all-cash deal for over £250 million. And to be clear, it’s a business few would call glamorous. Traditional, if anything — the kind of business that’s about as far from Silicon Valley as you can get. Last summer, I sat with him at a sports match, and when the conversation lulled, I asked for his best advice for young entrepreneurs, along with the question of who he couldn’t have done it without. Without hesitation, he said, “All roads lead to cash flow.” A familiar refrain, yes, but that’s a topic for another day.
Then he paused and thought about the second question. I was expecting the usual response — a CFO, a COO, maybe a strategic advisor. But no. He named a Project Manager, someone responsible for integrating newly acquired businesses into the wider group after mergers and acquisitions. Not exactly the flashy type of role that comes to mind when you think of deal-making and big exits.
What’s more, this friend is a bold, big-picture kind of guy. Visionary, savvy, and not really known for delving into the operational details. Yet he spoke with genuine appreciation for the “systems” and “processes” this Project Manager brought to the table (I’m not totally convinced he knew which “systems” and “processes” but he clearly understood the significance). The answer surprised me, and I could tell from the way he spoke about it that it surprised him too.
Over the next few days, I kept thinking about why this role, of all things, had made such an impact. And it became clear: it was all about reducing friction. The systems, processes, and attention to detail that this Project Manager brought to the business weren’t flashy, but they laid a foundation that underpinned the ability to scale at speed (and ultimately, result in a successful exit).
The Value of Boring Foundations
For all the excitement around big ideas, game-changing tech, and billion-pound valuations, the true bedrock of success is often hidden in these “boring” parts of business. Legal frameworks, accounting systems, cap tables, shareholder agreements, regulatory compliance — they’re not the things that make headlines. But ignore them, and you’re building on quicksand. Done right, these foundational aspects create a framework where the business can grow steadily, seamlessly absorbing new demands and opportunities.
Take cap tables, for example. At the start, tracking equity distribution might seem trivial. But without a well-maintained cap table, early-stage companies quickly lose track of ownership structure, which causes costly confusion later on. It’s the same with shareholder agreements, tax obligations, and filing deadlines. These are elements that can seem bureaucratic, but they’re what set the groundwork for sustainable growth and, eventually, an attractive business to investors.
Scaling These Basics with AI
Today, founders are more fortunate than ever. With the rise of AI, there’s a growing opportunity to streamline these fundamentals with technology, removing many of the friction points that traditional businesses once faced. AI can help automate legal document generation, manage compliance, and even scan correspondence for key updates like tax deadlines or regulatory changes. Imagine AI-powered systems that automatically update cap tables, alert stakeholders to changes, or flag potential conflicts in shareholder agreements before they become issues.
These tools bring efficiency but also precision, offering startups a way to get the basics right from the beginning. Instead of wading through a sea of administrative tasks, founders can use AI to ensure compliance, track growth metrics, and manage finances, all without devoting significant manpower. It’s no exaggeration to say that AI is revolutionising these “boring” business functions, making it easier than ever to lay down a solid foundation.
The Disproportionate Impact of Getting It Right Early On
What my friend’s story underlined for me is how vital it is to focus on the basics right from the start. These aren’t things that you can simply put off until the business grows. If anything, the impact of solid systems and processes grows with the business. They give you stability, reduce friction, and free you up to focus on the big picture. And when it comes time to exit, as my friend found, these are the very elements that make the business attractive to buyers.
It’s easy to romanticise the visionary elements of entrepreneurship — the passion, the innovation, the thrill of disruption. But at the heart of sustainable success is a strong foundation, built on the boring but vital parts of the business. And with the tools available today, especially through AI, there’s never been a better time to get this right from day one.