Early Disclosure Strategy

A strategy for M&A negotiations where being upfront about potential issues builds trust and leads to better outcomes.

Core Strategy

• Disclose all potential deal-breakers and company issues upfront
• Don't wait for due diligence to reveal problems
• Share "skeletons in the closet" early in discussions
• Better to lose deal early than waste time/emotion if issues surface later

Benefits of Early Disclosure

• Builds immediate trust with potential buyers
• Allows buyers to evaluate issues before emotional investment
• Prevents late-stage deal complications
• Gives buyers time to get comfortable with issues
• Creates foundation of transparency for relationship

Real Example Results

• Milk Road acquisition used this strategy successfully
• Buyers specifically cited early disclosure as trust-building moment
• Led to smoother due diligence process
• Resulted in successful deal completion

Common Entrepreneur Mistakes

• Natural instinct is to hide negative aspects
• Try to delay revealing problems until later
• Hope issues won't be discovered
• Fear scaring away buyers early
• End up creating distrust when issues surface in due diligence

Key Mindset Shift

• Reframe disclosure as trust-building tool vs liability
• Use transparency to qualify serious buyers early
• Focus on finding true match vs just closing any deal
• Understand issues will be discovered eventually
• Better to control narrative around issues vs have them discovered