It's Not Just About Money

professional profile

June 05, 2023

by a professional from York University in Toronto, ON, Canada

A common mistake that searchers make is thinking that a seller will sell to the bid that offers the most money.

Not true. More often that not, the seller doesn't go with the top bid. They go with the right FIT. Money is only one component in fit. What makes each deal challenging and unique is figuring out what matters to THIS SELLER at THIS MOMENT in time.

Is it money? Is it deal certainty? Is it likability of the buyer? Is it the buyer's experience in the industry? Is it something else?

Here are some reasons why sellers have decided to go with a bid that didn't offer the most money:

  1. "They'll honor the legacy we built"
  2. "I trust them to do right by the employees"
  3. "They're keeping the office where it is"
  4. "I trust they can actually close this deal"

Many a searcher have thought the deal was theirs because they offered the most money only to lose to a different party who figured out the seller's individual puzzle. Don't make this mistake!

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commentor profile
Reply by an intermediary
from New York University in Menlo Park, CA, USA
Let's not forget the seller note is only secured by the ongoing success of the business. Picking a buyer who is most likely to successfully run the business is a major concern of a seller who accepts a seller note as a part of the purchase agreement.
commentor profile
Reply by a searcher
from University of Virginia in Batesville, IN 47006, USA
Agreed, finding non-financial reasons for a seller to sell to you is crucial to get a good deal in this environment.
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