Second-Best Offer Wins

A story about how Shaan Puri chose to accept a lower acquisition offer for his company because it had better terms and higher likelihood of closing.

"With our last deal, we took the second highest offer - we turned down the top offer. I personally left $1.5-2 million on the table taking the second deal over the first deal, which was meaningful money to me.

The main reason was that our whole team would go with the second deal. But another important factor was likelihood to close. They told us: 'Look, yes we've been a pain in the ass in negotiation, we're sticklers about this stuff, we don't move super fast. But the good news is that means we've thought it through and got our approvals already. Once we sign this thing, we will close and we will close on time. The bad news is leading up to it, we're not the quickest fastest dealmakers who are going to promise you everything - we're only going to promise what we can deliver.'

I didn't really know how to value that at the time. He was pitching it as a value and I was like 'whatever, the other guys are offering more.' But in retrospect, that actually was quite important because 100% of the second best deal is better than no deal from the best offer, or somebody who's going to try to retrade the deal in the last minute."