For every seller who’s made a mistake in a deal, there’s a buyer who made one bigger.
Most founders assume buyers hold all the cards: they have the capital, the advisors, and the leverage. But as anyone who’s spent time in the deal trenches knows, plenty of transactions fall apart not because the seller got cold feet, but because the buyer mishandled the process.
With founder-led companies, especially in the lower middle market, a deal is about more than spreadsheets and synergies. When you’ve spent years building something you’re proud of, you want a buyer who builds trust through clarity, conviction, and character.
After reviewing more than 30 closed transactions with MSPs, VARs, ISVs, and other technology service providers, these are the 10 most common buyer mistakes that derail deals…and the ones you’ll want to be able to recognize and steer around as a smart, strategic seller.
(Note: You won’t find “lack of financing” on this list. Most of my transactions involve private equity–backed buyers who have capital readily available. The real friction points happen not in raising funds, but in how those buyers conduct themselves during the deal.)
This is how sellers operate when they’re leading the deal, not reacting to it.
1. The Last-Minute Holdback
It’s the week before closing, everyone’s exhausted, and suddenly the buyer announces a “small escrow” or “temporary holdback” for “peace of mind.”
To the seller, it doesn’t feel small, it feels like betrayal.
After months of good-faith negotiation, this eleventh-hour surprise signals mistrust or unease from the buyer. Even if the deal still closes, goodwill evaporates along with post-close cooperation.
You’re not just selling a company, you’re selling a relationship. Confident sellers recognize that if there isn’t respect for the process now, there might not be respect for your team post-close.
2. The EBITDA Add-Back Game
Nothing undermines credibility faster than adjusted EBITDA calculations that somehow only adjust in one direction…down.
Buyers sometimes re-interpret the purchase price equation after due diligence, claiming that certain add-backs don’t qualify or that recurring revenue should be defined more narrowly. There are times when this is justified; for example, when the seller has been overly aggressive, can’t substantiate an add-back, or has misapplied a normalization. It’s also fair for a buyer to reduce EBITDA if they must add overhead or personnel to operate the business post-close.
But too often, those justifications are stretched thin and sellers see them for what they are: a re-trade in disguise. Once a buyer crosses that line, trust is nearly impossible to rebuild, and deals either reprice or die entirely.
Sophisticated sellers have already run clean numbers and either avoid this back-and-forth or can confidently back them up.
3. Culture? What Culture?
Integration isn’t a line item; it’s an art form. Some do it well. Many don’t.
Buyers often assume the acquired team will simply adapt to new systems, new reporting, and a new boss. But founder-led businesses run on loyalty and identity, not hierarchy. Overlooking culture or dismissing it as “soft stuff” almost always guarantees employee departures and customer churn.
Smart sellers vet this early. Talk to past sellers about what changed post-close and how quickly. If turnover followed the deal, there’s your red flag.
4. The Vanishing Communicator
Before the LOI, the buyer is all charm and communication. After the LOI, emails slow down. After the close, the tone shifts entirely.
When founders go from daily engagement to radio silence (or whiplash-inducing policy changes), they feel duped. I’ve experienced this firsthand in my own company sale, and I can tell you, it leaves a lasting impression.
In the lower mid-market, where sellers are emotionally invested and often stay on for a transition, consistent communication is the difference between a smooth handoff and an implosion.
Avoid surprises by speaking with past sellers the platform has acquired. If you’re intended to be the platform, talk to other CEOs of portfolio companies to understand how often the fund communicates and how transparent those conversations really are.
5. The Reluctant Bidder
Some buyers think holding back their best offer is smart negotiating. They want to “see where the market lands.” But that tactic often backfires, leaving sellers with a “too little, too late” impression.
When a buyer only improves their offer after another buyer tops it, you lose confidence in their conviction. It signals hesitation or, worse, undervaluation.
You’re not just selling for price; you’re selling for belief. If you sense a buyer is lukewarm, trust your gut and gravitate toward the buyer who leads with strength.
I recently saw a seller walk away from over a million dollars more because they preferred the buyer who showed genuine conviction from the start.
6. The FUD Factory: Overzealous Buy-Side Advisors
Not every buyer mistake is self-inflicted; sometimes it’s outsourced.
When a buy-side M&A advisor enters the scene, their mandate is simple: get the best deal for their client. But too often, that translates into sowing FUD (fear, uncertainty, and doubt) with the seller. They’ll question the financials before seeing the data, nitpick immaterial risks, or lob in an opening offer so far below market it borders on insulting.
Case in point: I was recently brought into a transaction after the seller had advanced through several offers, all supported by a pre-sale QofE report. The buy-side advisor made two huge blunders: first, insisting the owner’s salary couldn’t be added back even though the owner was transitioning out, and second, completely undervaluing a direct Microsoft CSP relationship. Both were rookie mistakes. We parted ways with that advisor, found another buyer, and closed for $2 million more.
These tactics might look clever on paper, but they backfire with founder-led businesses. Founders aren’t institutional, they’re emotional stakeholders. When a buy-side advisor leads with gamesmanship instead of respect, confident sellers walk and the buyer’s reputation takes the hit.
7. The Discount QofE
A Quality of Earnings (QofE) Report is not the place to cut corners.
Some buyers try to save money with a “lite” QofE or an internal review, thinking they’re being efficient. Instead, they end up missing key adjustments: deferred revenue misclassifications, normalization errors, and under-accrued liabilities that come back to haunt them.
I always tell buyers: spend the money now or spend six figures later fixing it. While most PE firms get this, I once saw a buyer outsource a “QofE-like review” to a junior firm. The PEG they came up with? Let’s just say it was pulled out of someone’s behind. The true-up never happened and ironically, that mistake ended up benefiting my seller.
This mistake can backfire on the buyer and the seller. So, successful sellers understand their financials intimately enough to speak up if something isn’t looking right.
8. The NWC Curveball
One of the most common late-stage surprises comes from “revisiting” the net working capital target or PEG.
Maybe the buyer didn’t model seasonality or suddenly claims deferred revenue shouldn’t count. Sometimes, the QofE firm itself misreads the business model and hands down a new PEG just days before the close…one conveniently higher than before.
Whatever the reason, a last-minute change feels like a bait-and-switch. The easiest fix is to ensure it is modeled correctly up front and communicated early. Buyers changing the rules in the ninth inning guarantees a fight where no one leaves happy.
If you end up in that situation, it’s a judgement call on whether the deal is worth a compromise or it’s time to walk.
9. Lawyer-Led Negotiations
Lawyers are vital, no question, but when they start driving strategy instead of protecting it, deals slow down or stall.
Overly complex indemnities, endless redlines, and nitpicky reps and warranties often signal inexperience rather than sophistication. The best buyers set tone and direction, then let their counsel implement, not dominate.
If it starts to feel like overzealous legal strategy is running the show, smart sellers step back and reassess who’s actually in control. And sometimes, let’s be honest, you just need your counsel to tell the other side they’re being assholes.
And finally, what I consider to be the most important point of all…
10. The Reputation Blind Spot
Word travels. Fast.
Private equity firms and strategics sometimes forget how tight founder networks are, especially in verticals like MSPs, ERP VARs, and SaaS. When a buyer retrades, delays payments, or reneges on promises, other founders hear about it.
And when CEO after CEO is terminated within a year of selling, that gets around too. Reputational damage doesn’t just cost one deal; it costs the next ten, especially in this space, where we all still see each other at vendor events and tradeshows.
So, utilize that network. Without being obvious, wise sellers keep their ears to the ground for red flags (or green flags) about buyers, and make note for when it’s time to go to market.
The Bottom Line
Great deals aren’t won on leverage, they are won on credibility.
The best buyers understand that trust is currency, and transparency is a differentiator. In the lower mid-market, where every seller knows someone who sold before them, the buyers who behave well not only close more deals, they get first calls on the next opportunity. At least, that’s how it works with me.
So, sellers, remember to operate like a founder that buyers pay a premium for. Prepare well. Know your value. Lead with conviction. And remember: you are interviewing them, too.
What Are M&A Advisor Fees in 2024–2025?