Here is a composite. Final stage of a confidential CRO search at a PE-backed company doing about $75 million. The operating partner likes the finalist for one reason above the others: she spent eleven years selling to exactly the accounts on your target list. The value-creation model already has $6 million of new annual revenue from "her relationships" by the end of year one. Three weeks before her start date, your employment lawyer reads her agreement.
Boards talk about a sales leader's book as if it were an asset that transfers at closing. Usually, nobody has checked. In a confidential search it is easy to miss, because you can't ask the current employer and the finalist may not have reread a contract signed six years ago. The result is a number in the sponsor's model that nobody diligenced.
What the paper may say
Noncompetes get the headlines. The FTC moved in September 2025 to end its effort at a nationwide ban, which leaves enforceability to the states, as we set out in The Noncompete Patchwork. For a revenue leader, though, the clause that matters most is often a different one. A customer non-solicit can stop her approaching named accounts for a set period, even in a state that is hostile to noncompetes. An employee non-solicit can stop her hiring her old team. Equity agreements may carry their own terms. And her customer list, pricing knowledge and pipeline data may be protected information she can't bring with her at all.
We are not lawyers, and this varies by state and contract. The point for a board is simpler: this is a question of fact, it can be answered before the offer, and it usually isn't.
A worked discount
Take that $6 million and walk it down. Every percentage below is invented for illustration. Replace them with your own.
- $6.0M in the board model from the finalist's relationships.
- Less 50% for the non-solicit. Half of the target accounts were her direct accounts in the last two years, and they're off limits for 12 months. Those deals move out of year one. $3.0M remains.
- Less 40% for accounts that stay. A buyer's trust in a person doesn't always mean they will replace a vendor with switching costs. $1.8M remains.
- Less 40% for timing. She starts in month three, your sales cycle is nine months, and some revenue lands after year end. About $1.1M remains.
Illustrative year-one value of a new CRO's book after a customer non-solicit, accounts that stay put, and sales-cycle timing.
ETHOSLINK worked example. All inputs are assumptions for illustration, and the discounts are applied in sequence. Directional only.The exact number will differ. What matters is the direction. A line in the model that looks like signed revenue is closer to an option, and the sponsor has probably paid a premium for it in the offer.
What travels with a star
There is a second discount, and the research on it is old but solid. Boris Groysberg studied 1,052 stock analysts at 28 US investment banks from 1988 to 1996. As CBS reported, 46% of the star analysts did poorly in the year they switched firms. The follow-up paper in Management Science added the useful detail: the drop was worst when stars moved to weaker firms or moved alone. Stars who moved with team members showed no significant decline.
Analysts are not revenue leaders, and those are three-decade-old Wall Street numbers, so take the direction rather than the figures. Performance comes partly from the person and partly from the system around them: the brand, the data, the sales engineers, the marketing engine, the people they trust. Your company's system is what she will inherit. And the employee non-solicit may be the very thing stopping her from bringing the team that made her a star. We looked at how a thin system breaks a new leader in Your Pipeline Isn't Broken.
Underwrite what the CRO can build. Treat what they can bring as upside.
Six questions before the offer
- Which agreements have you signed? Ask the finalist early to list employment, equity and bonus documents, and have your employment counsel review them under a confidentiality arrangement.
- Which accounts are restricted, and for how long? Map them against your target list. Count the overlap.
- Who owned the relationship? Ask for the buyer's name and who would take her call today. Then ask how those deals were actually won. A CRO who ran the system is different from one who personally closed the deal.
- What must stay behind? Make it explicit in writing that she brings no customer lists, pricing files or pipeline data. Counsel should script this.
- What did the system around you do? How much of the number came from inbound, channel, sales engineering or the brand? Ask for evidence.
- What will you build in 12 months if you can't call a single former customer? This is the most useful question on the list. A strong revenue leader has an answer. A relationship seller doesn't.
Run these with care. A finalist who is still employed can't have your questions reaching her boss, and a confidential search depends on one firm controlling that conversation. See The Reference You Can't Call for the sequence. Then rewrite the offer and the model together. If the book was priced into the guarantee or the bonus, tie that money to what she builds.
When a book does matter
Some seats really are relationship-led: a narrow market with a handful of buyers, or an agreement with no restrictions, or a long-expired one. Then the book can be worth paying for, if you've checked. Other companies don't need a CRO at all yet. If the real gap is process, a fractional CRO can build the forecast, the pipeline rules and the hiring plan for six months, and a retained search can run alongside. We priced the empty seat in CRO Vacancy Math, so don't let a covenant question turn into a year-long vacancy.
The process rule is short. Before an offer goes out, put a number on what the finalist can legally bring in year one, and take the rest out of the model.