Clinical Evidence Is a Bargaining Chip. Don't Fold It Early.
How (gold-standard) clinical trials can help you get the deal done and be your key to a crazy exit valuation.
Founders preparing for an exit polish the obvious levers. Revenue growth, gross margin, retention, and CAC. Of course, it matters, and all of it gets stress-tested in the data room.
But the asset that most supplement and health brands overlook and the founder never thinks to develop, and that the acquirer’s diligence team thinks about constantly.
Your clinical evidence on your own product.
At the negotiation table, the buyer isn't just looking at your unit economics; they're buying the business as a package, and within that is your brand credibility.
Every claim you cannot defend (with your own primary evidence, ideally done through a well-done randomised controlled trial) is a discount the buyer will calculate while they smile across the table.
I’m pretty much average at poker, but you don’t have to be an expert to know that if the other player (business buyer) will see all of your cards, it’s best not to bluff…
Why a few trials can be worth millions
This is not abstract. Consumer health businesses sell on a multiple, and clinical evidence moves two key levers.
The first is the multiple itself. An acquirer pays more for revenue they believe will survive contact with regulators, competitors, and their own lawyers.
A product whose headline claim rests on a borrowed study, a mechanism hand-wave, or one influential customer’s anecdote is revenue with a question mark stapled to it.
A product with its own defensible trial behind the claim is de-risked revenue. De-risked revenue trades higher. On a business doing a few million in EBITDA, even a small increase on the multiple is already real money.
The second is the structure of the deal, where founders lose the most and notice the least.
A deal is never just the headline number. It is earnouts, escrow holdbacks, warranties, and indemnities.
The more risk a buyer sees, the more of your money they keep behind glass. Held in escrow for a year or two, clawed back if a claim gets challenged after close, tied to reps and warranties you are personally on the hook for.
Strong clinical evidence shrinks that perceived risk.
Less risk means less cash held back and fewer warranties hanging over you after you have supposedly sold the thing.
That gap is millions ($/£/€), and a lot of it is cash that stays in your pocket instead of theirs.
So the clinical cards in your hand are a source of leverage. Played well, they are worth more than almost anything else you can do in the final twenty-four months before a sale.
But only if the science is good
More studies are not the goal. The right studies, done defensibly, are the goal.
A diligence team is paid to find the holes. Hand them a thin, underpowered, or off-claim study, and you have not added a bargaining chip. You have handed them a weapon.
A weak study does not sit there neutrally.
It invites the one question every acquirer is trained to ask: if they cut this corner, what else did they cut?
Suddenly, your clean financials are getting a second look, too.
Quantity gets audited.
Quality compounds.
One trial that survives scrutiny is worth more than five that collapse under it.
The cheapest study that got you a marketing claim this year is often the exact study that gets torn apart in the data room two years later.
You need to make sure you’re not buying a liability with a publication date.
This is why the cheapest CRO, fastest p-value approach quietly costs you at exit.
Most brands treat a trial as a marketing checkbox.
Get a result, get a claim, get it on the label, move on. But you are not building that evidence for this quarter’s campaign.
You are building it for the buyer who will read it line by line, with their lawyers, looking for a reason to pay you less.
The question was never “what is the cheapest way to get a claim?”, The question is “what evidence will still be standing when someone is paid to knock it down?”
The timeline objection, and why it is mostly wrong
The honest pushback is timing. Good evidence feels slow, and exits do not wait, so founders pick speed and either:
1) just spend more on general marketing spend and become a victim to diminishing returns, or
2) quietly accept weak science.
They assume rigour and timelines are a straight trade-off.
They are not…
Most of what makes a clinical trial slow is not the science.
It is the paperwork, the queue, the institutional drag.
Run it properly and run it lean, and you can have evidence that holds up without setting fire to the runway you need before a raise or a sale.
The thing that actually kills you is starting late. Evidence that you commissioned the quarter before diligence is evidence that you commissioned too late. It will not be mature, peer-reviewable, or defensible when it counts.
If you are eighteen months to three years out from a raise or an exit, the clinical evidence you build now is not a marketing expense. It is part of the price.
Build it well, and it is a bargaining chip worth millions when you sit down to negotiate. Build it badly, and it is the first thing they use against you.
If you want to know which one yours will be, that is a conversation worth having before the buyer’s team has it for you.
I’ll be going to the International Scientific Conference on Probiotics, Prebiotics, Gut Microbiota and Health and Longevity Show next week! If you’ll be attending, do let me know, it would be great to catch up.
All the best,
Nathan