Focus On Deal Certainty

When selling a company, the best deal isn't necessarily the highest offer, but rather the one most likely to close. This perspective comes from experiencing multiple failed high-value deals and learning the importance of deal certainty over maximum potential value.

Key Points:

• Deal Evaluation Criteria:

  • Focus on likelihood to close rather than highest dollar amount
  • Consider buyer organization and professionalism
  • Look for red flags in early interactions
  • Value clear communication and straightforward processes

• Real Experience Example:

  • Milk Road sale had two options:
    • High offer with concerning red flags
    • Fair offer with more professional approach
  • Initially chose higher offer but encountered issues:
    • Lawyer wouldn't show face on calls
    • Questionable legal documentation
    • Unusual payment timing and structure
  • Eventually returned to fair offer which closed successfully

• Warning Signs to Watch:

  • Disorganized buyers
  • Unprofessional behavior
  • Unusual payment structures
  • Missing or questionable documentation
  • Non-standard legal processes

• Best Practices:

  • Evaluate buyer credibility early
  • Don't let attractive numbers blind you to red flags
  • Consider long-term relationship potential with buyers
  • Value professional and organized buyers
  • Remember that a closed deal is better than a failed higher offer

• Deal Psychology:

  • High offers can make you overlook obvious problems
  • "That red flag starts to look just like a it's like is that maroon actually maybe that's orange"
  • Important to maintain objectivity despite attractive numbers