Including expiration dates in IOIs?

searcher profile

June 24, 2021

by a searcher in Charlottesville, VA, USA

Does anyone have empirical evidence about whether including expiration dates in IOIs (i.e. putting some time pressure) results in better or worse conversion rates into LOIs?

Random sentence to hit 200 characters requirement :)

0
8
142
Replies
8
commentor profile
Reply by a searcher
from Northwestern University in Hamburg, Germany
From a buyers perspective I have stopped taking any "take it or leave it" or "if I agree to this valuation we need to finish due diligence within 2 weeks" statements by the seller too seriously and just do my thing. I think any eduacted seller and seller advisor will do the same with an IOI expiry date...

However for some sellers where you can feel that they strongly prefer you because of personal fit I think it can definitely help to apply some pressure wether through timing or making them aware that you are looking at other opportunities. Makes the seller act quicker on data requests and can also help a bit with valuation...
commentor profile
Reply by a professional
from Marquette University in Kirkland, WA, USA
I agree, I tell my buyer clients not to put in an expiration date in an IOI or an LOI. The seller controls the deal as they own the business (and probably have multiple interested buyers). This is another area where relationship comes into play - a good relationship means you can have an honest discussion about timing.
commentor profile
+6 more replies.
Join the discussion