Etiquette - When deciding not to proceed with a business

searcher profile

October 19, 2020

by a searcher from Stanford University - Graduate School of Business in Chicago, IL, USA

After deciding not to proceed with a business relatively early (post NDA) in a brokered situation, Is it necessary to send a note? Should it explain why?

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commentor profile
Reply by an intermediary
from Wisconsin Lutheran College in Brookfield, WI, USA
I think it's important to let the intermediary know if it's due to lack of fit or more fundamentals with the business. If it's not a fit, then I need to know what's best to introduce next time (and not waste your time as a searcher). If something fundamental with the business, it lets me know if there is something I need to address with my client to improve the business or be prepared for with future buyers. Either way helps me be more productive with either side of the possible deal.

If a prospective buyer just disappears after signing an NDA, I tend to give them less respect if they inquire on something else. You have no idea the number of tire kickers we deal with every day. Find ways to separate yourself as a buyer from the masses, and this is one way.
commentor profile
Reply by a searcher
from University of Maryland at College Park in Annapolis, MD, USA
Reputation is everything. Repeat buyers will encounter the same brokers, bankers, and professional services advisors again and again on different deals. It is wise to build solid relationships with the parties involved so they value and respect you as a buyer, even when a deal does not proceed to the closing table. This means whenever possible to over communicate, act professionally, respect the transaction protocols set by the seller or their representatives, and certainly let them know why you are pulling out of the bid. Often deals come back around down the road because they were over-priced or a different buyer failed to get financing. If you build and maintain relationships they will bring the deal back to you first.
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