Key Takeaways
- The Rembrandt in the Attic refers to hidden assets in a business that can significantly increase its sellability.
- Strong financials attract financial buyers, but uncovering hidden assets appeals to strategic buyers, driving up value.
- An example is Jason Patel, whose industry-leading SEO became a desirable asset, leading to a sale opportunity for his intangible resources.
- AI visibility is becoming crucial as customers rely on AI search engines, making it another potential hidden asset for selling a business.
- Owners should identify and appreciate their hidden assets, which could set their business apart when it comes time to sell.
In M&A circles, there is a well-known concept called the Rembrandt in the Attic. It refers to a situation where an acquirer discovers an asset or capability inside a target company. The seller either undervalued, underutilized, or did not realize it was there. If you want to build a sellable business, uncovering these hidden assets can be a key differentiator. Just like the classic trope of a homeowner finding a priceless masterpiece tucked behind old boxes, these hidden assets can sometimes be worth more than the core business itself. Once they are dusted off and put in the right hands, their value can be transformative.
Your Financials Get You in the Game
If you are building to sell, revenue and EBITDA matter. A lot. Strong financials make your company irresistible to financial buyers. These include the private equity firms and holding companies that acquire businesses based on cash flow and earnings multiples. Do not neglect the fundamentals. But financials alone only attract one type of buyer. The Rembrandts in your attic, the hidden or underappreciated assets inside your business, are what make you irresistible to strategic buyers. And when both financial and strategic buyers are competing for your company, that is when the value of your business really goes up. This outcome enables you to build your business into something truly sellable.
A Founder Who Didn’t Know What He Had
Consider Jason Patel. He built Transitions Education, a college and career counseling marketplace that connected high school students with young professional mentors. The company was doing reliable upper six figures in annual revenue with around 60% gross margins. These are respectable numbers for a bootstrapped operation. However, they are not the kind of financials that make acquirers fall over themselves if you’re trying to build something sellable as a business.
What Patel did not fully appreciate was the asset he had built almost as a byproduct of running the business: industry-leading SEO. Furthermore, his blog attracted millions of readers every month. His YouTube channel had strong viewership. His Google reviews were the highest rated in the space. All of this was built organically, without venture capital. Meanwhile, two competitors with tens of millions in funding trailed behind him in search visibility.
When a micro private equity firm on the West Coast reached out, Patel assumed they wanted the marketplace. They did not. They wanted the public-facing assets: the search engine rankings, the content library, the reviews, the newsletter, the traffic. They had no interest in running a labor marketplace. Instead, they wanted the digital real estate Patel had assembled, because it could serve as a marketing engine for their other portfolio companies in adjacent niches. Ultimately, Patel learned that you can build assets within your company that make the business highly sellable.
Patel ended up keeping the marketplace operation and his team. The acquirer walked away with the intangible assets most founders treat as an afterthought.
The Next Rembrandt: AI Visibility
What happened to Patel with traditional search is about to happen again, only faster. AI search engines (e.g. Chat GPT, Gemini, Claude) are increasingly how customers discover and evaluate companies. When someone asks an AI assistant to recommend a service provider in your category and your company comes up as the answer, that visibility is enormously valuable. It can help you build a sellable business in today’s digital landscape.
Most business owners are not thinking about whether AI engines recommend their company. But acquirers are starting to. Just as Patel’s SEO became the asset a buyer coveted most, your AI search visibility could become a Rembrandt. A future acquirer may ultimately prize it above your financials.
Do You Have a Rembrandt in Your Attic?
Your hidden asset might be a proprietary dataset. It could be a library of content that ranks on page one, a loyal community that trusts your recommendations, a codified methodology a larger company would pay a premium to acquire, or a brand that AI search engines already cite as a trusted source. All of these can help you build up a business that is highly sellable.
The challenge is that most owners are so focused on the obvious metrics that they overlook the hidden assets a strategic buyer might covet. Therefore, step back and ask yourself: what have you built, perhaps unintentionally, that would be difficult or expensive for someone else to replicate? This can be a crucial step to build your business in a way that makes it appealing to buyers later.
Patel’s SEO did not show up on his balance sheet. It was not a line item in his financials. But it was the single thing that made a buyer reach out, propose a deal, and close within months. The Rembrandt was hanging in his attic the entire time. He just did not know it was there until someone offered to buy, proving the importance of building a business that is ultimately sellable.