Got word that there is a higher offer LOI. Anyone have experience convincing a seller that you're still a better option even though the other offer is higher? Or best ways to sweeten my offer without overpaying? Earnouts...what else?
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Digging deep on the structure you're offering vs. the higher overall number may help (e.g., you're at $10M with a 10% seller note; other offer is at $15M with only $5M guaranteed and the remaining $10M on an earnout - whose is better? That's up to seller psychology). What's the seller's day 1 payout? How much if any of the sale price is deferred or at-risk?
Some potential deal-killer points are unlikely to surface at the LOI stages, but could give you a second bite at the apple (e.g., specific structure of non-compete, R&W, indemnity basket and cap, retention plan for key employees, etc.) - generally I think searchers may be more accommodating on these points than a PE firm or strategic buyer.
And especially in "smaller" small businesses, fit / legacy / cultural integration can't be ignored. It probably won't get you a multimillion-dollar discount, but it's one of the factors that's typically most strongly in your favor.