What do you do when the seller's expectations are wildly unrealistic?

by a searcher from Northwestern University - Kellogg School of Management

1 year ago

This seems to happen more with deals on brokerage sites (like Microacquire), but I've seen several service businesses there expecting 10x EBITDA multiples for agency businesses. I've sent messages asking why they expect such a high valuation, but honestly, the responses make me think they're just clueless.

My assumption is that it's not worth trying to educate and change people with mismatched expectations, but I'm curious if anyone else has a strategy for dealing with this?

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104 comments

searcher from University of Wisconsin - Madison

I agree with the above comments. I think time is also a factor here. I've seen situations where a broker wasn't able to talk the seller down, and just had to wait until the seller received a reasonable offer, and then was able to use that as a springboard to restart a conversation about bringing down the price. I don't think there's any harm in making a reasonable offer.

4 weeks ago | like reply | 0 likes

searcher

I agree with Adam. If you even want to pursue it, then give them a reasonable offer. The worst thing that happens is that they say "No", and you haven't lost anything.

5 months ago | like reply | 0 likes

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