Two Weeks from Closing, We Walked Away

May 13, 2026

by a searcher from Georgia Institute of Technology in San Francisco, California, USA

For the past year, I stepped away from a traditional career path to pursue entrepreneurship full time. My thesis was simple: acquire a healthcare software company, modernize the technology stack with AI, and create a platform that could significantly increase enterprise value while improving healthcare operations. During that time, I explored multiple ideas at the intersection of AI and healthcare, built prototypes, spoke with customers, and ultimately spent the last five months pursuing the acquisition of a healthcare software company. My cofounder and I were just two weeks away from closing. We had raised nearly $2 million in investor commitments, secured bank financing, and invested approximately $70,000 in legal, diligence, and related expenses. In the final stretch, several issues surfaced that we could not ignore: - EBITDA appeared to be materially overstated - The bank appraisal uncovered additional concerns (50% in discrepancy) - We were unable to complete the level of technical diligence needed to gain confidence in the underlying software platform - Aggressive APA terms; multiple covenants that restricted us to grow the new business effectively. After months of work, we made the difficult decision to walk away. I can’t in good faith, put my investors money into this. My job is the CEO to protect them first. It was one of the hardest professional decisions I have made. The experience was emotionally exhausting, but it reinforced one of the most important lessons in acquisitions: sometimes the best deals are the ones you choose not to close. Over the past year, I have learned more about healthcare infrastructure, acquisitions, fundraising, and myself than I ever expected. Most importantly, my long-term vision has not changed. I want to build and own multiple businesses that improve critical industries, particularly in healthcare. For now, I am taking some time to rest, reflect, and think carefully about what comes next. That may involve another acquisition, building organically, joining a healthcare technology company, or some combination of all three. I am deeply grateful to everyone who supported me throughout this journey. If you have experienced a failed acquisition or a difficult entrepreneurial chapter, I would love to hear what helped you recover and how you found your next opportunity.

Reply by a searcher
from Georgia Institute of Technology in Toronto, ON, Canada

Chelsea, Walking from a deal at the 2-week mark, after $70K and a year of work, is the hardest discipline in this game. Most searchers can't do it. The sunk cost gravity at LOI+5 months is enormous, and the fact that you held the line on EBITDA quality, bank appraisal, and tech diligence is the kind of judgment that protects investors over a career, not just one deal. Reading the four issues you flagged (overstated EBITDA, 50% appraisal gap, tech stack you couldn't get conviction on, aggressive APA), any one of them probably should have killed it. All four together is a hard no. The honest read is that the seller and likely the broker were running a process designed to obscure those things until past the point of return. You didn't let them. For what it's worth, I run Dubbs Capital with a similar thesis (highly predictable B2B tech), and the lesson I keep coming back to is that the quality of the miss matters more than the count. A deal you walked from for real diligence reasons doesn't slow you down. If anything, it tightens your screen, and your investor base trusts you more on the next one. On recovery, the searchers I respect most have all had a deal die late. The pattern I've seen work is (1) a real reset, a few weeks fully off rather than "rest while quietly grinding," (2) a written post-mortem that gets specific about what your screen should have caught earlier and at what stage, and (3) re-entering the funnel with a tighter thesis, not a broader one. The instinct after a failed deal is to widen aperture; usually the right move is to narrow. Also, fellow Yellow Jacket here (OMSCS). Happy to compare notes anytime, feel free to DM. Wilson Dubbs Capital

Reply by a searcher
from University of Pennsylvania in San Francisco, CA, USA

Good call - never easy, especially with fundraising dynamics and sunk costs in the deal! Take some time for yourself, as you said... Then get back to it!

+3 more replies.

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