An anti-guide to selling a company — the mistakes nobody talks about openly.
Most conversations about M&A focus on the upside. How to position. How to negotiate. How to maximize price.
Fine. Important. Necessary.
But after 25 years and 300+ transactions, I’ve come to believe that the more useful conversation is the opposite one.
Because in many transactions I have observed over the years—and, unfortunately, in a few I have personally been involved in—value wasn’t lost because the company was bad.
It was lost because of the process.
Not through one catastrophic mistake. Through a series of small decisions that gradually weakened positioning, reduced leverage, and quietly eroded everything that had been built.
So here it is — the anti-guide. The mistakes I’ve seen destroy value in M&A. The ones nobody puts in a pitch deck.
Key takeaways
- Value is rarely destroyed by weak companies. It is destroyed by poor process decisions.
- Confusing interest with competition, and granting exclusivity too early, shift power to the buyer.
- Structure, risk allocation and certainty of closing matter as much as the headline price.
1. Starting the process before you’re ready
This is the most common one. And the most damaging.
A founder decides to explore a sale. Assumes preparation can happen along the way. It rarely does.
Here’s what happens instead: buyers form impressions early. Quality of information. Financial consistency. Whether management knows their own numbers cold. Whether the story is clear.
And once confidence is lost — really lost, not just bruised — it is extremely difficult to recover inside an active process.
Poor preparation creates delays. Additional diligence. More perceived risk. Lower credibility. And all of that translates, eventually, into lower price and worse terms.
In M&A, first impressions are often valuation anchors. They stick.
2. Confusing interest with competition
Many founders believe that having ‘a lot of conversations’ means having a competitive process.
It doesn’t.
A long list of passive contacts is not competition. Real competitive tension comes from credible interest, strategic fit, genuine buyer engagement, and a process that is synchronised enough to create real urgency.
Ironically, contacting too many buyers can reduce tension rather than create it. If the market feels flooded with the opportunity, buyers stop feeling privileged to access it.
And when perceived uniqueness disappears, urgency usually disappears with it.
3. Choosing the wrong buyer
Not every buyer who can buy your company is the right buyer for your company.
This mistake almost always comes from over-focusing on headline price. And I understand why — the number is tangible. Everything else feels abstract.
But transactions are also defined by certainty of execution, cultural fit, decision-making dynamics, financing risk, and integration capability.
I’ve seen this happen more times than I’d like.
A seller receives multiple offers. Chooses the highest bidder. Grants exclusivity. Assumes the deal is now on track. Then, six weeks later, the buyer comes back: the investment committee didn’t approve, financing fell through, something else came up.
The process has to restart. Six weeks lost. Competitive tension gone. Negotiating power weakened. And both sides carrying the emotional fatigue of a deal that almost happened.
The highest offer is not always the best offer. In M&A, certainty of execution can be worth more than price.
One of the most underestimated skills in this profession is understanding who is truly capable of closing — and why.
4. Granting exclusivity too early
Exclusivity changes the balance of power immediately. The moment it’s granted, competitive tension weakens, buyer urgency decreases, and negotiating leverage shifts.
This doesn’t mean exclusivity is always wrong. In some situations it’s necessary and perfectly rational.
But granting it too early — before critical terms are sufficiently advanced — is one of the fastest ways to weaken your position.
Because once competition disappears, processes slow down. And renegotiations begin.
5. Underestimating due diligence
Many founders see due diligence as a technical verification exercise. Something to get through.
Buyers see it differently.
Due diligence is where confidence gets reinforced — or where risk perception increases. Unexpectedly discovered issues rarely stay isolated. They trigger price adjustments, additional protections, longer negotiations, and structural distrust.
One unresolved issue often creates doubts about areas that have nothing to do with the original problem.
That’s why preparation matters so much. And why anticipating potential concerns — through a Vendor Due Diligence process, for example — can significantly reduce friction later.
In M&A, surprises are expensive. Almost always.
6. Letting the process control you
This one is subtle. And more common than people think.
A process starts strategically. Then, gradually, it becomes reactive. Buyers start dictating timing. Momentum gets lost. Information flow becomes inconsistent. Decisions become emotional rather than intentional.
At that point, the seller is no longer managing the process.
The process is managing the seller.
And once that happens, value erosion accelerates.
7. Focusing only on price
This may be the most dangerous mistake of all. Because headline valuation is seductive.
But deals are not defined only by the number. They are defined by structure, risk allocation, earn-outs, rollover conditions, closing certainty, and governance dynamics after the transaction.
Two offers with the same price can produce radically different outcomes.
I said it in a previous newsletter and I’ll say it again:
Only a fool confuses price with value.
A final thought
One of the great paradoxes of M&A is this: companies that create enormous operational value don’t always capture that value when they sell. Because creating value and preserving value during a sale process are two very different disciplines.
The first is about building a great business.
The second is about not giving it away.
M&A is not simply about finance. It’s about preparation, process design, psychology, negotiation, timing, and judgment.
Charlie Munger said it better than I could:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
The same applies here. Many great M&A outcomes are not created through brilliance.
They are created by avoiding the mistakes that destroy value.
The ones on this list.
These mistakes, and how to avoid them, are covered step by step in the M&A Training Program and in my book Mergers & Acquisitions: Strategy, Execution, and Decision-Making.
FAQ
What destroys the most value when selling a company?
When should a seller grant exclusivity to a buyer?
Is the highest offer always the best one?
Financing, execution certainty, deal structure and the buyer’s ability to close can make a lower headline price the better deal.
