Avoid this Big Exit Mistake

Hi {{first_name}},

Entrepreneurs, please be careful.

As soon as an investor is in the pipeline to buy your business, it’s so tempting to get excited, it’s natural!

But that excitement can lead to one of the worst psychological moves you can make in an exit negotiation: looking desperate

Rushing into closing a deal can make you look like you really need this transaction to complete and they’re bailing you out. It will make them second guess their interest in your business.

I’ve seen it myself. A friend of mine had signed an LOI with a prospect and was getting into due diligence. All seemed fine, but he started revealing how he couldn’t wait to leave the company. The buyer started getting second thoughts and lowering their price offer. Eventually the deal fell through because of the mistrust.

Here’s how to avoid that image:

Most of you are used to selling for a living, but have never sold a company, so it’s easy to forget basic sales psychology when negotiating with an acquirer.

You need to act like you don’t need to sell. Make them think like you’re doing them a favor by letting them in on the action at such a low price (which should be true!).

Emphasize the other potential buyers of your business.

Talk about the bright future of the company in an almost nostalgic way.

Act remorseful about losing out on next years profits and projects.

The novelty of selling a company is also a reason why you should negotiate with your moderate-to-low opportunity prospects first, learn from that experience including any fumbles, then pitch your best prospects later once you’ve practiced a little. This is one of the lessons I remembered most from Steve Schwarzman’s book What it Takes, which is about his experience selling hundreds of billions of dollars worth of companies while building Blackstone, you can get this great book here

Build rapport with the buyer. This is a major, potentially life changing transaction so it’s worth you spending that little extra time to build a strong relationship, it’ll make the deal more likely to close and will reduce the idea of you being a pressure salesman.

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So the takeaway here is: there’s no need to rush in the moment you find a potential buyer. Exits aren’t just about winning; they’re about matching the right buyer to your legacy.

Here’s to your success,

Unlocking Wealth Weekly