What risk looked ‘manageable’ pre-close but hurt most post-close?

January 05, 2026

by a searcher in Kolding, Denmark

In deals that look fine on paper (reasonable multiple, stable cash flow, clean QoE), what’s the non-obvious risk you’ve personally seen cause the most pain post-close- the kind that rarely shows up in CIMs or early diligence? Not looking for textbook answers, but real examples from experience where something felt manageable pre-close and turned out to matter far more in execution.

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Reply by a lender
from California State University, Sacramento in Seattle, WA, USA

In reality, there are almost too many potential gotchas to list. I’ll bang out a couple: 1) Customer concentrations for long time relationships that are really very tied to the seller. The seller exits and so does the business. 2) Key employees that leave post close even when you were assured they’d stay. 3) The culture is toxic and that’s often very hard to pin point pre-close. 4) Seller and spouse doing way more in the company than understood. And their enthusiasm to help transition wanes and/or you need to hire more bodies to help do the work 5) Working Cap misses 6) Seller note payments kicking in after initial payment holiday, no growth or J curve makes it tough to make the payments that you assumed would be a no brainer cuz you were going to continue to grow the company. 7) Seller misrepresentation. 8) Misalignment with buyer operational skill set. 9) Taking on more debt to fix problems isn’t usually a reality. You’ll need equity infusions post close in many many cases. Lenders will literally have dozens and dozens of examples for you. So don’t over-lever, have additional personal equity available to inject post close, buy in industries that you have experience in and/or a real good feel for. You won’t know until you’re in there if you’ve got a good one or if things do bubble up, you’re in a position to navigate through. Happy to talk to US based acquirers using the SBA loan program. redacted ^redacted‌

Reply by a searcher
from Babson College in Orlando, FL, USA

Thanks for the tag ^redacted‌ - Great question Megha - For us, one of the most painful post-close risks is the 'Tribal Knowledge Deficit.' For example, on paper, the cash flow is stable and the QoE is clean. But post-close, you realize that the stability wasn't driven by a process; it was driven by the founder’s 'gut'; a series of undocumented relationships, unwritten workflows, and informal promises that never made it into the CIM. We mitigate this risk (and others) with a Transparent Framework for Collaborative Discovery during diligence. We work alongside the management team to map the Architecture and Operating System of the business. One of the outcomes is the valuation of the business and final PSA terms. Also, our process is designed to reveal if there is a deep Key Man Risk hidden in those clean financials. It’s the difference between buying a repeatable system and buying "secret sauce" that disappears the moment the founder leaves the building.

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