Post-Deal Learning Sessions

A key insight into M&A negotiations and the importance of post-deal reviews to learn from the experience and improve future outcomes.

Key Negotiation Mistakes to Avoid

• Never give the first number
  • Stating a price range upfront can anchor negotiations at the lower end
  • One decision in negotiation can impact value more than years of operations
  • Can cost millions by setting wrong anchor points

Post-Deal Review Best Practices

• Wait until deal is closed and relationships are established
• Have candid conversations with counterparty about:
  • What mistakes were made during negotiation
  • How high they would have been willing to go
  • What factors influenced their decision making
  • What made them hesitant or interested
  • Areas where you could have negotiated better

Deal Structure Considerations

• Look at comparable deals for rough valuation ranges
  • But ranges can be too wide to be meaningful
  • Each deal is unique based on circumstances
• Consider non-price factors:
  • Team retention plans
  • Integration approach
  • Stock vs cash considerations
  • Market timing impacts

Process Management

• Time-box the process (e.g. 45 day window)
• Maintain consistent messaging across all parties
• Don't let emotions drive negotiation strategy
• For larger deals ($50M+), consider using investment bankers
• Be prepared to walk away if terms aren't right

The key lesson is that post-deal reviews provide critical learning opportunities since most founders get very few chances to negotiate major deals in their careers.