A common pattern when valuations come in low: Buyers don’t challenge the economic reality.They challenge the methodology. They argue multiple selection, capitalization rates, discount rates, adjustments, weightings, comps, assumptions. Sometimes those are fair discussions. But many times, the buyer’s real complaint is simpler: “This result doesn’t match what I want.” If the business truly supports … Continue reading Arguing Methodology Instead of Economics

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 … Continue reading The Valuation Isn’t There to Bless the Deal

Some deals don’t get done because they’re bad businesses. They get done because the buyer loves the story. The turnaround story. The rescue story. The “I’ll take it to the next level” story. Stories are powerful. They’re also dangerous. Because stories can turn a valuation into an obstacle instead of a signal. And when a … Continue reading When Buyers Fall in Love With the “Before/After” Story

First-time buyers often believe they can “outwork” risk. They think: “I’ll improve operations.” “I’ll grow sales.” “I’ll modernize marketing.” “I’ll hire better people.” “I’ll fix what the seller didn’t.” Maybe they will. But that’s not the point. The point is this: A plan to improve performance is not the same as proof of historic performance. … Continue reading The Illusion of Control

Most due diligence problems don’t happen because people skip due diligence. They happen because the due diligence becomes confirmatory. Everyone is busy. Everyone is professional. Everyone has checklists. But the questions shift from: “What could hurt us here?” to: “How do we justify moving forward?” When that happens, data stops being evidence and becomes a … Continue reading Confirmation Bias in a Suit

Here’s something buyers rarely admit: They start counting money they already spent as a reason to spend more. Legal fees, deposits, inspections, travel, diligence consultants, time off work, negotiation fatigue… And then they treat those as “investments that must be recovered,” rather than what they actually are: Sunk costs. A valuation comes in light, and … Continue reading Sunk Costs Create Bad Math

One of the most underrated risk factors in acquisitions has nothing to do with the business. It’s social. By the time many buyers reach the valuation step, they’ve already told people. Their spouse Their friends Their current employer Sometimes their employees Their lender Their broker Their inner circle At that point, backing out isn’t just … Continue reading The “I’ve Already Told Everyone” Trap

I’ve watched many smart buyers do something that sounds subtle but changes everything. They go from wanting the deal… to needing the deal. Wanting is healthy. Wanting means you’re motivated. Needing means your judgment is now compromised. Because when you need something, you stop asking, “Is this a good decision?” and start asking, “How do … Continue reading Wanting a Business vs. Needing a Business

There’s a subtle shift that happens in acquisitions, and it’s usually the beginning of the end of objectivity. At first, the buyer is evaluating a business. Then one day, without realizing it, they’re evaluating their future. They start picturing the first day as owner. The “after” picture. The new identity. The family conversations. The lifestyle … Continue reading The Moment the Deal Becomes Personal