THIS WEEK IN BROKEN DEALS

Here’s what’s in store for this week:

• Announcement: How to get a free copy of our new ebook, The 10 Commandments of a Sellable Business

• Best Link: The Independent Sponsor Council is holding free operator work sessions to help sponsors solve transaction problems

• The Graveyard: Why the mindset of the Seller must be managed in a transaction and how the “Pretty Girl at the Party” Syndrome is one of the major deal killers sellers fall prey to.

• Work With Us: We just opened up a new program for small growing M&A Advisors and Brokers to get Wall Street level analyst help with their deals on a success-fee basis. Book a call with us below to learn more.

ANNOUNCEMENT

Get our new ebook, The 10 Commandments of a Sellable Business!

This ebook contains the main principles we’ve uncovered analyzing hundreds of broken deals.

In this new ebook, we’ll describe the 10 things you must avoid to close more deals, including:

• Why focusing on price is often a mistake and how to use it to your advantage to speed your deal to a closing

• How to manage your team through closing so your sales stay strong

• The mindset every selller must have to guarantee a successful exit (and why avoiding it can cost you millions)

• And more…

Click this link now to get the ebook (free).

BEST LINKS

Matt’s Favorites

• I’ve watched this three times and still can’t get enough! (Twitter)

• Anatomy of a Successful Independent Sponsor Deal on the McGuire Woods Deal-By-Deal Podcast (YouTube)

Finance & Capital

• The Independent Sponsor Council is holding free operator work sessions to help sponsors solve transaction problems (LinkedIn)

• A reminder that a well-placed “all hands” call can be rocket fuel for a deal. (Twitter)

Salability

• ULTIMATE PET PEEVES LIST FOR SELL SIDE BANKERS

   (Twitter)

• 4 lenses and 6 key questions Private Equity fund managers can use to drive exit value (LinkedIn)

THE GRAVEYARD

“Pretty Girl at the Party” Syndrome

 During the Broken Deal Newsletter, on the Rhapsodi Social Media Accounts, and in our most recent eBook - The Ten Commandments of a Sellable Business, Matt and I have had a consistent theme which I’d like to make very explicit with you:

 Your Personal Mindset around deals is almost as big, if not as big, of a factor in whether or not you will successfully sell your company as the business facts surrounding the company itself.

 Put another way:

 Our professional experience after tens of millions of dollars of transactions tell us the following - The Seller is often his own worst enemy when it comes to the transaction.

 He loses the most money, the most time, and the most effort of anyone on the deal team. The stress and high stakes of the deal environment get to Sellers in a way that they are often uniquely unprepared for, and many… I won’t say “wilt” under the pressure, but rather often “boil over” like an overheated batch of rice in a cookpot.

 So, this article will give some specific advice about handling certain parts of the deal process, but much of it you’ll have probably heard before -

 The difference is that as opposed to just giving you a list of good advice, I’m going to try to take a look behind the curtain of why so many Sellers seem to violate these rules in the first place, when, from the outside looking in, they amount mostly to common sense.

Responding to Diligence Requests with a Positive, Service Minded Attitude

 The bulk of the suggestions in this piece can be summarized in a few clear directives:

1. When diligence requests come in, respond to them as fast as is reasonably possible.

   • If there will be a delay, let the Buyer know.

   • If the request is difficult or impossible (for example, if the data requested simply doesn’t exist), try to provide something adjacent to the request which could still help the Buyer with his decision.

2. During negotiations, meet most (though not egregious) statements with a neutral emotional state.

3. When bad news must be discussed (there will absolutely, always be bad news during a deal), maintain that same neutral emotional state, and focus on solutions, not blame.

4. When doing Seller’s diligence on the Buyer (ability to pay, any fraud concerns, etc.), be extremely discrete.

 There are an infinite number of variations on this same theme of providing excellent “service” to the Buyer, but they all coalesce into something I’ve called being “The Dutiful Shopkeeper” or “The Gracious Host.”

 If you can maintain that kind of positive, good energy attitude that you find in a high-touch service business like a fine hotel, you’ll be on your way towards the best possible resolution to your deal.

Enter Pretty Girl at the Party Syndrome

 So what gives? Why are we even discussing something so banal, so obvious?

 Because most Sellers do not act this way.

 Instead, in at least 85% of all cases we’ve been exposed to, a Seller, at least minimally, sometimes in a full blown manner, adopts the opposite mindset:

            -Aloof

            -Difficult

            -Slow to respond, slow to agree

            -Why are you talking to me again?

 Truly, what is going on here? Why would someone who has built their whole career on satisfying customers in their own company suddenly change their tune so totally on the biggest sale of his or her life?

 In short, it’s because they aren’t just wanting to make a sale, to get a fair deal for their business, to retire with the knowledge that they have done right by their employees and their community.

 No, they want an emotional experience.

 The same kind of emotional experience that a Pretty Girl at a Party receives -

            -Pursuit

            -Compliments

            -Little Favors

 Far be it from her to lift a finger, you can hang up your own jacket, thank you. She will not be buying that drink, pardon.

 When a business Seller has it in his mind that, at long last, it’s time for others to chase him, things can start to spiral very quickly.

 Diligence requests can seem very burdensome.

 Delays become personal attacks, not business issues to resolve.

 Random, throwaway comments become reason enough to shut down effective communication for days

 During a recent client call with a Seller who has lately been acting very strange, drawing certain parts of the negotiations out and casting dispersions on the character of the Buyer, I received the following comment as we ended the call.

 “I just want to be wooed.”

How to resolve the Syndrome

 There are two factors towards resolving this issue:

 The first is to understand that the emotional experience you desire is simply not a part of the deal. In the literal sense. While a savvy Buyer may handle the personal side of the transaction in a more tactful manner, you’re selling a company, not getting married. 

 If you’re having difficulty with this, I do have a certain amount of understanding for the viewpoint. It would be nice, pleasant, fun, if the last action you took in your career had a fairy tale ending. I certainly coach my Acquisition Clients to be much, much better at giving Sellers the kind of experience that they’d like. If not perhaps the Pretty Girl at the Party, at least make them feel like a solid 8 at the company cookout.

 But ultimately, it just requires some introspection and “putting yourselves in the shoes of the customer” to realize that the Buyer has their own reservations and difficulties as well. We’ve talked other places about the emotional turmoil that a Buyer goes through when acquiring - all the risk of operating the company is about to be on them, and that can be a heavy burden. Take stock of where you are in your life, and give the grace the other side required to keep business business, and your emotions and personal desires independent of that. 

 The second factor is to eliminate from your mind an argument I often hear from clients when I bring up that they are acting like a diva, and advise them to be “The Dutiful Shopkeeper” instead:

“Won’t that put me in a bad negotiating position? Won’t it look like I am “trying too hard,” that there must be a “catch” - something that is off about the company if I am not acting aloof and difficult to work with - like a luxury brand? I want them chasing, not the other way around!”

 The claim here is that their behavior is tactical, designed to improve the flow of the deal and keep the Buyer “hooked” on what must be a “hot” opportunity with a lot of action from other Buyers already. 

 It’s a fair idea - Some premium businesses like Rolex have made a name for themselves by being famously difficult to interact with (and if you’re unsure about that, just YouTube some “Rolex Authorized Dealer” videos to see what I am talking about. There is a feeling that they give where they are too good to take your money).

My counterpoint to this idea is the following:

 Luxury Goods exist in an alternate universe - Many wealthy people want nothing to do with the whole industry, and isn’t for lack of cash. It speaks more to a certain kind of person - one concerned primarily with image and “vibes” compared to true quality and product.

 There actually seems to be a certain relationship between how useless a given product really is in reality (watches that are constructed with 1700’s technology, paintings that could now be done with AI, etc.) and how “exclusive” the industry has to act in order to maintain its image.

 Contrast this with a related industry, High-End Restaurants, and the experience is very different. No High-End Restaurant allows people in without adhering to strict rules - you must have a reservation, you must be dressed appropriately, and you must act in a manner befitting the environment of that restaurant - but after that, you’re the king or queen of the whole place.

 Multiple waiters assisting you with every detail of the experience, small delicacies given away as a part of the experience, any issue with the food taken care of immediately. And no one would think to not pay a very high price for such service, or think that the business was “low quality” because the service was of such high quality.

 It’s simply Reciprocation - they bring themselves to the game putting their best foot forward, and they expect absolutely the same from you. If you slip up - for example, by trying to come in in shorts and a T-Shirt, you’re out.

 This is the right mindset for a business sale - you are a Michelin starred restaurant. Yes, we expect you to play by our rules… but if you do, you’ll feel like you’re the king of the world.

 Forget the reverse psychology, playing “hard to get” idea entirely.

Conclusion

 When it comes down to it, selling a business is about striking the right balance between professionalism and personal detachment. Sure, it’s natural to want recognition for everything you’ve built, but in this high-stakes environment, emotional distance is your ally. Sellers who succeed don’t lean on charm or play mind games; they bring focus, clarity, and a service-oriented mindset to the table. So leave the party tricks behind and show up with the discipline and commitment that makes your business truly stand out. In the deal world, there’s nothing more attractive than a seller who knows exactly what they're worth—and proves it by their actions.

THAT’S A WRAP

Before you go: Here are 2 ways we can help

Is your deal stuck? We may be able to help. Get a free 30-minute deal assessment here — LINK TO SCHEDULE ASSESSMENT CALL

Are you an M&A Advisor or Broker looking for Wall Street-level financial analysis support for your CIMs and client financial info? If so, we offer a success fee-based program to help you close more deals with less overhead. To learn more, schedule a call here — LINK TO LEARN ABOUT SUCCESS-BASED FINANCIAL ANALYSIS