M&A Exit Strategy Attorney | Helping $5M–$100M founders exit with clarity, confidence & max value | $1B+ in transactions | Big Exit Insiders™ on YouTube
First-time Sellers get overwhelmed by uncertainty: Who should be on their M&A team? What will this really cost? How long will it take? Without guidance, wrong people, surprise fees & delays cost millions. M&A Exit Compass™ covers 3 topics - People, Cost & Timeline. Find out now!
Agree, and it's exactly why I tell founders not to let a litigator run their deal. The worst-case reflex is right in a courtroom, where one bad fact sinks you. In a sale it does the opposite. A lawyer who flags all 200 risks equally talks you out of every deal and buries the three that actually matter. Most of the risk in a purchase agreement is supposed to get allocated, not eliminated and that's what indemnity caps, escrows and survival periods are for. A good deal lawyer says "here are the two things I won't let you sign, everything else is negotiable." The bad one says no to all of it and calls it diligence. Where do you see smart operators most often let worst-case thinking cost them?
This is the cleanest way I've seen anyone say it. The part most owners miss: a buyer isn't pricing the P&L, they're pricing how much of it walks out the door the day you leave. I've watched two companies with nearly identical earnings sell 18 months apart for a 40% spread, and the gap was almost entirely owner dependency. The fix isn't a better pitch, it's removing yourself from the org chart 12 to 18 months before you ever take a call, so "remove the owner" leaves a real business standing. What's the first function you tell an owner to delegate when you're trying to make a company actually sellable?
This is the rare version of this post that gets it right. The headline number is a story, the wire is the fact. The piece I'd add from the deal side: that $17M isn't a choice you accept or reject, it's a starting structure you negotiate. Most founders treat the offer as A or B and pick one. The ones who clear more cash treat the earnout as a set of terms to rewrite before the LOI. Move the mix toward upfront, tie any earnout to a metric you actually control like gross revenue instead of an EBITDA line the buyer can engineer, and cap how long you owe them a seat. And your first question is the right one. Deal certainty beats deal size every time, because a clean $10M that closes beats a $17M that dies in diligence or pays out at 40%. What's the most aggressive earnout retrade you've talked a founder back from?
BATNA in 30 seconds. Best Alternative To a Negotiated Agreement (Mnookin, Harvard). Your BATNA is your power. If it's better than the compromise on offer, you take your BATNA. For an M&A seller, BATNA = a real competitive process with 3-6 qualified buyers. Without that, you have no BATNA, just hope. Buyers can tell the difference. They price the difference.
Most founders treat "why are you selling" as a small-talk question. The buyer's team treats it as the most diagnostic question in the entire negotiation. They already know the answer matters more than the price.
Buy-side counsel I worked with for three PE firms had one diagnostic question for every new sell-side opportunity. "Do they know what we are?" If the seller didn't know they were dealing with a financial buyer, the firm priced the deal lower. Every time.
I used to sit on the buy side for three PE-backed energy companies. I know exactly what the buyer's team does the morning a new sell-side LOI lands on the desk. The first question is never "what's a fair price." The first question is "how prepared are they." The answer to that question prices the deal more than EBITDA does.
The honest answer most founders hate is that the quit decision should be made before you're in the emotional hole, not from inside it. By the time you're asking the question at 2am, you're deciding with the part of your brain that's exhausted and scared, and that part either holds too long or folds too fast. The founders who get this right set their walk-away criteria while things are still good. What return on another year of my life clears the bar. What number changes everything. What has to be true for me to keep going. Write it down when you're thinking clearly, then let those gates make the call when you can't. Most of the owners I've sat with held on years too long because quitting felt like admitting the whole thing was a mistake. It almost never is. Sometimes a business just runs its course, and closing it clean is its own kind of win.
Luca did the thing that should make every seller pay attention. He showed up knowing the industry cold before he ever made an offer. From the buyer's seat, that prep is leverage. He's read 50 versions of your business and he knows which numbers founders fluff. Here's the flip most sellers don't think about. A searcher this prepared is usually the cleaner counterparty to sell to. He's buying one company to run for years, so his intent is real and his diligence is honest. The trap is a seller who walks in unprepared against a buyer who has done nothing but prepare. I tell founders to score the buyer the way the buyer is scoring them. Financial capacity, real intent and whether the team actually fits. That read takes an afternoon and it changes how you negotiate everything after the LOI.
The window cuts both ways, and that's the part founders watching this miss. A wave of boomer owners hitting the market at once is a buyer's market by definition. More supply, same pool of serious capital, multiples compress for anyone who shows up unprepared. I've watched two businesses with nearly identical EBITDA sell 18 months apart for a 40% spread. The difference wasn't the market. One owner spent a year cleaning up customer concentration and building a management layer that didn't depend on him. The other listed the week he decided he was tired. Buyers in a flooded market get to be picky, and they price every ounce of founder dependency as risk they have to underwrite. The owners who catch the high end of this window start the work 12 to 18 months before they ever take a call.
If you cannot sit still for 45 days, your non-negotiables aren't real non-negotiables. They're preferences. The buyer can tell the difference inside the first three days.
A 24-month earnout against a PE buyer is a different animal than a 24-month earnout against a strategic. Same words, two completely different deals. If you don't know which archetype you're negotiating with, you can't tell which one you're actually signing.
Day 5 of silence is when most founders crack. They call the buyer's team and "soften" the counter-offer. The buyer's team has been waiting for exactly that. The retrade starts the moment you reach out first.
The "ten years in the making" line is what I tell founders every week. The companies that look like overnight wins to the market have usually been running structured exit prep for 18 months minimum behind the scenes. Capitalization cleanup. Customer concentration stories tightened. Founder dependency engineered out. Stord didn't show up at 25% household reach by accident. They built the operating profile a strategic buyer or growth equity firm could underwrite without rework. That's the gap between a $50M exit and a $200M exit at the same revenue. Sean and the team played the long game inside before the headline showed up. What's the earliest indicator you look for when an advisor-side client is actually ready vs. just thinks they're ready?
This is the gap most founders don't see when they sell their company. 31 consecutive exits means your model has compounding pattern recognition. Your average buyer has a profile. Your average objection has a counter. The risk that surprises a first-time seller is already priced into your pre-deal prep. Founder-led exits don't get that. One shot. One buyer. One set of provisions you've never negotiated before. Founders who close at their LOI price are the ones who borrow institutional discipline before the first buyer call. Five non-negotiables locked. Sell-side QoE done. Term sheet detail in the LOI, not the PSA. The boring stuff that turns one-shot deals into 31-deal execution. What's the diligence detail that catches first-time investors off guard in your fund's check size?
Both are true. Buyers aren't pricing "SaaS" anymore. They're pricing the slot a SaaS company will fill in their stack after they bolt AI on top. That's two markets in one chart. Headline multiples on AI-native SaaS still look great. Legacy SaaS exit multiples have compressed because the buyer's underwriting assumes they'll be doing the AI work themselves, and that work costs real money and carries real integration risk. The legacy deals that close at the higher number? Sellers did the AI groundwork pre-LOI. Customer concentration cleaned up. Margin defense story locked. A clear answer to "what would this look like with AI sitting on top of it." Not the AI itself. Just the path to it.
The 42-year, zero-marketing pattern is one of the clearest signals in lower middle market. Three other green lights worth adding to the hunter's checklist: long employee tenure with no equity given out, owner takes more than 4 weeks off per year, and pricing hasn't moved in 24 months. Each tells you the business runs without the owner. And the owner knows it.