Build board = Build value
The best way to add value in the straddle period between signing the LOI and closing the deal: build a
LOI
10 posts
Discontinue other convos when under LOI
Should you discontinue ongoing business owner conversations if you're under LOI with someone else? Yes, kind of, if
Estimated deal expenses for independent sponsors
Deal expenses: • Legal: $100-300k • QoE: $20-70k • Misc.: <$100k • R&W insurance: ~1% (uncommon) • Closing fee: 1-2% of EV
LOI best practices
LOI best practices: • Include baseline financials for the target company and explicitly state that your valuation is based on this
Seller's Cold Feet Never Reheat
It's not uncommon for a seller to get cold feet. However, it is uncommon for a seller'
When Deal Drags On Pre-Closing
Best practices with a seller when your deal is dragging on without closing: (i) Over-communicate. Weekly email updates, frequent phone
1 LOI is Better Than 2 LOIs
1>2 If you have 2 new platforms under LOI: well done, but focus each investor meeting on 1.
Seller w/ Cold Feet
If your seller is getting cold feet, they’re usually much colder than you think. 🥶 • Don’t wait and see.
$300k Break Fee
"I negotiated a $300K break fee if they walk away before it closes." Break fees aren't
Keep the ball in your court
When dealing with business owners, don’t leave the ball in their court. They’re busy and many suck at
