A valuation isn’t a rubber stamp.

It isn’t supposed to “make the deal work.”

It’s supposed to answer one question:

What is the business worth, based on the economics it has demonstrated?

When a valuation comes in below the purchase price, the most revealing thing is the first reaction.

Some buyers say:
“Okay. What does this tell us?”

Others say:
“How do we fix the valuation?”

That second response is the start of risk blindness.

Because if the business can’t support the price, the problem isn’t the valuation.

The problem is the price.