Keep Running the Business Until the Deal Is Closed
Why founders should keep their foot on the gas until Sign and Close
A common mistake by business CEOs is getting overexcited when a potential acquirer approaches them — often leading them to lift their foot off the business gas pedal, because they already assume the company will soon be sold.
M&A is like a marriage. The first expression of interest is like an invitation on a first date — it's a long process to the altar, and at an early stage the probability of ultimately sealing the deal is pretty low.
The probability of a sale rises with each milestone
As you move further into the process, the likelihood of selling increases approximately according to the following rates:
| Path to selling a business | Approximate probability of converting to sale |
|---|---|
| Potential acquirer expresses interest in your business | ~10% |
| Send an initial info pack for a non-binding offer | ~30% |
| Sign a non-binding Letter of Intent, with exclusivity | ~60% |
| Sign a binding offer | ~90% |
| Sign the Sale and Purchase Agreement and close the deal | ~100% |
Each milestone materially increases deal certainty — but nothing is final until completion.
It's never over till it's over
Don't get distracted by cash-out hopes after the first call with an acquirer. Keep yourself fully focused on business as usual all the way through to Sign and Close — a deal that slips while the business drifts can leave you with neither the sale nor the momentum you started with.
Originally published by our Chief M&A Adviser David Abashidze, CFA on LinkedIn