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In a world where most entrepreneurs are grinding through sales and marketing to grow 10% year-over-year, Jeremy Harbour, founder of the Harbour Club and Unity Group, is playing a different game. He views Mergers and Acquisitions (M&A) not as a corporate luxury, but as a “cheat code” for small business owners to double their size overnight and achieve true financial freedom.
In a recent deep dive, Harbour shared his unconventional wisdom on why you should start with no money, how to avoid becoming “exit liquidity” for others, and why the best time to sell your business is almost always now.
1. The Power of Starting with Nothing
Most people assume you need a war chest of capital to buy a competitor. Harbour argues the opposite: having no money is your biggest tactical advantage.
- Forced Efficiency: When you lack cash, you are forced to figure out capital-efficient ways to structure a deal.
- Risk Mitigation: If you have no money, people can’t take it from you.
- Inventive Structuring: Necessity breeds invention, leading to creative “win-win” structures rather than just writing a check and taking on all the risk.
2. Common M&A Pitfalls: Don’t Become “Exit Liquidity”
One of the most dangerous mistakes Harbour sees is “deal heat”—falling in love with a transaction so much that you agree to it at all costs.
- Over-leveraging: Many buyers borrow heavily to cash out a founder, only to spend the next five years working for the bank rather than themselves.
- Imbalanced Risk: You shouldn’t pay 100% upfront for a business that could lose its key staff or customers the day after you take over.
- The “Sellers are Liars” Rule: Just as the sales world says “buyers are liars,” Harbour warns that sellers will present their business in the best possible light, often obscuring the reality of its fragility.
3. Preparing for a Massive Exit
If you want to sell your business for a premium, you have to stop thinking like an owner and start thinking like a customer—where the “customer” is your future buyer.
Create a “Data Room”
Don’t wait for a buyer to ask questions. Create a Dropbox or Google Drive folder (your data room) populated with everything a due diligence checklist requires.
Systems Over Personality
The most valuable business is one that doesn’t rely on the founder. Buyers want systems and processes that drive predictable outcomes regardless of your personal input.
Avoid “Operation Distraction”
Harbour recounts a story of a 30-point plan to “improve” a business before a sale. A top broker told him none of those points would increase the valuation.
The Lesson: Sell the dream of the opportunities, but don’t get stuck in the weeds trying to implement them yourself before you exit.
4. Driving Up Your Valuation
To get a higher multiple, you need to pull three specific levers:
- Financial Engineering: Work with your accountant to choose accounting treatments that represent the most profit possible, rather than just focusing on tax efficiency.
- Risk Reduction: Secure long-term contracts, diversify your customer base, and move away from “client concentration”.
- The Scale Pyramid: There are millions of small businesses but very few large ones. As you grow in revenue (moving from $1M to $10M or $50M), the number of potential buyers increases while the number of competitors decreases, driving your valuation multiple up exponentially.
5. Creative Deal Structures: The “Extra Bond”
Harbour is known for sophisticated structures like Exchange Traded Acquisition Bonds (Extra Bonds). Instead of raising cash to buy a business, he issues a regulated bond as a “currency”.
- The seller receives a bond that appears in their bank balance and pays a regular “coupon” (interest).
- The business uses surplus cash to buy back these bonds over time.
- This allows the buyer to acquire companies with a much lower cost of capital than traditional bank loans.
Final Wisdom: Why the Best Time to Sell is Now
Harbour warns against the “lottery winner” mentality of waiting for a billion-dollar offer. Market disruptions—AI, Amazon, or a major client going bust—can turn a valuable business into a liability overnight.
“If you can be an entrepreneur with time and money, you have a superpower that nobody else has,” Harbour says. Selling creates a capital event that buys you truly passive income, liberating you from the daily grind and allowing you to become a “shareholder” rather than just a “runner” of businesses.
