They say a deal dies 20 times before it gets done.
Anyone who's lived through an M&A process knows: that’s not a metaphor — it’s reality.
Even the most promising deals can quietly unravel before the ink hits the term sheet. Not because the business isn’t great. Not because the buyer isn’t serious. But because the seller, often unknowingly, becomes their own worst enemy.
Like the fabled farmer who killed his golden goose out of short-sighted frustration, sellers can sabotage years of hard work with a few emotional or ill-informed decisions.
🧨 5 Ways Sellers Kill Their Own Deal
Let’s walk through the hidden landmines — the little cracks that, left unchecked, can lead to total collapse before due diligence even starts.
❌ Strike One: The “Insulting” Offer
The seller receives a non-binding offer.
They were expecting 10x EBITDA. The offer is 5x.
No context. No explanation. Just shock.
They take it personally. The conversation shuts down before it begins.
What they don’t realize:
Valuations are a starting point — not an insult. Emotion can cloud judgment. Advisors can help bridge the gap and reframe expectations. But if the seller walks away too early, they might be turning down a very real opportunity that just needs reshaping.
❌ Strike Two: “I Thought I Was Done After Closing”
Many sellers believe M&A means handing over the keys and walking away.
But when they discover the buyer expects them to stay involved post-sale — sometimes for a year or longer — they balk.
What they don’t realize:
Buyers are not just buying machines — they’re buying know-how, continuity, and risk mitigation. Especially in people-dependent businesses like F&B or services, a proper handover period is essential.
❌ Strike Three: The Non-Compete Clause
The seller scans the SPA and sees a non-compete clause.
It feels like a straightjacket. No similar business for 3 years? No chance to return to what they love?
What they don’t realize:
Buyers are protecting the value they just paid for. It’s standard, not sinister. These clauses are often negotiable in scope — but rejecting them outright looks like you’re not ready to move on.
❌ Strike Four: The Deal Structure Isn’t “Clean”
The seller wants a full upfront cash payout.
Instead, the deal comes back with:
- Seller financing
- An earnout tied to revenue targets
- Final payments 12-18 months down the line
They feel like the buyer doesn't trust the business enough.
What they don’t realize:
This structure is often the only way to close at a higher valuation. Sellers are being paid more — but over time and based on future performance. Risk is shared. That's business. If the structure truly doesn’t match your risk appetite, don’t kill the deal — restructure it.
❌ Strike Five: The Legacy Panic
Just as things are moving forward, the seller starts to second-guess everything.
- “What will happen to my staff?”
- “What if the buyer changes our recipes?”
- “Am I really ready to let go?”
What they don’t realize:
Legacy concerns are valid — and common. But they must be addressed early and clearly. Buyers are open to transition plans and legacy protection if it’s raised at the right time. Last-minute hesitation? That’s how deals quietly die.
💡 TFA’s Role: The Trusted Truth-Teller
At The Funding Assembly, we act in the best interest of sellers — always. But that doesn’t mean sugar-coating reality. Sometimes, helping a seller get the best outcome means telling them things they may not want to hear:
- Your valuation expectations are too high.
- You will likely need to commit to a 6–12 month transition.
- The final payment may come after 12 months, tied to performance.
These aren’t dealbreakers. They’re the real terms of real deals.
If a seller pushes back on all of them, we’re not in dealmaking anymore — we’re in denial management.
đź› The Bottom Line: Get Real, Get Ready
Selling a business is not just a financial event — it’s an emotional one. But emotion, when left unchecked, is one of the fastest ways to kill a deal.
If you're thinking of selling your business in the next 1–2 years, the best thing you can do now is prepare your mindset. Because the buyer isn’t your enemy — uncertainty is.
And remember:
đź’¬ The deal dies 20 times... but it only needs to live once.
Want to know how much your business is actually worth? Or what deal terms are realistic in your industry?
Talk to us at The Funding Assembly
Eric
