A few months ago, a founder came to me after spending nearly two years listed with another advisor. Two years on the market. Two years of conversations. Two years of waiting. And yet, there had never been a structured process, no meaningful competitive tension, and no serious buyer movement.
During those two years:
- Customer concentration increased.
- Strong employees left.
- Major contracts with multi-year MSAs came up for renewal.
- Buyer appetite narrowed.
The window he once had quietly closed.
His company hadn’t deteriorated. Revenue was stable, even growing. Customers were strong. The business was still good.
But the process had been weak.
Not long after that, when catching up with a buyer, they said something about a completely different transaction that I haven’t forgotten: “It seemed like asking the seller for addbacks was a surprise,” even though he was represented by an M&A advisor.
Different deal. Same pattern.
Businesses rarely lose value because they are poorly run. They lose value because the transaction is poorly led. And leadership shows up in very specific places.
Where Leverage Actually Begins
Founders often believe that once they hire an M&A advisor, they’ve checked the box. They assume the heavy lifting is now someone else’s responsibility. In reality, hiring an advisor is the beginning of a process that either preserves leverage or slowly erodes it.
Leverage starts with preparation.
By the time a company goes to market, there should be nothing surprising about EBITDA adjustments. A serious advisor walks through the P&L line by line long before the first buyer conversation. Interest expense. One-time legal fees. Owner compensation normalization. Non-recurring costs. Transaction expenses. All of it should be analyzed, supported, and defensible.
Add-backs are not accounting theory. They are valuation leverage. If $200,000 in legitimate adjustments are overlooked in a 6x deal, that is $1.2 million in enterprise value left behind.
When those discussions happen for the first time in front of a buyer, the seller is no longer leading the conversation. They are reacting. And once you are reacting, leverage begins to slip.
Process Control Is a Discipline
The same pattern continues throughout the deal.
A professional sell-side advisor is not simply someone who sends documents and schedules meetings. They are the common thread in every critical conversation. They protect consistency in messaging. They manage tone. They recognize when a founder is over-explaining or inadvertently conceding ground. They keep the narrative aligned with value.
When the advisor steps back too early (whether because they are uncomfortable with complexity or because they claim regulatory constraints limit their involvement) fragmentation begins. Conversations happen without context, buyers quietly recalibrate risk, and small issues grow.
Yes, M&A advisors must operate within FINRA and SEC boundaries. They cannot provide legal advice or accounting opinions. But compliance does not prevent leadership. It does not prevent preparation. It does not prevent coordinating the right professionals or pressure-testing working capital assumptions before they become negotiation leverage.
There is a difference between respecting regulatory limits and hiding behind them.
The Final Exam: Working Capital and the True-Up
Every deal ultimately comes down to reconciliation.
Net working capital, indebtedness, PEG alignment, AR and AP support, management adjustments: the true-up that takes place 90 to 120 days after closing is where all of these details come together one last time. It is not administrative cleanup; it is where dollars move.
If an advisor cannot defend the working capital build or disappears once the LOI is signed, the seller is left exposed at the exact moment precision matters most.
This is where sophistication shows. Not in the teaser. Not in the pitch deck. But in the final numbers.
The Question Every Founder Should Ask
The founder who came to me after two years on the market did not lose value because his business was weak. He lost value because no one had been leading the process with discipline, and his ideal window to sell had passed. It will now take at least a year or two to rebuild that positioning.
If you are working with an M&A advisor and they are not walking you through your EBITDA adjustments in detail, that is not a minor oversight.
If they do not understand how your revenue is generated and what drives its durability, that is not a small gap.
If your M&A advisor is not present for initial buyer calls, disappears after the LOI is signed, cannot clearly explain how net working capital will be calculated, or is not there helping you navigate the true-up after closing, those are not inconveniences; they are warning signs.
And sophisticated buyers can tell immediately when a process is being led and when it is simply being managed.
Selling your company may represent decades of work and a significant portion of your net worth. The advisor you choose should be leading the transaction, not merely coordinating it.
If that leadership is absent, it is worth asking a very direct question:
Who is actually protecting your leverage?
Alright. I will step off the soapbox now.
But I’ll tell you why I care so much about this: when I sold my last company, I chose an M&A advisor who hid behind “FINRA rules” instead of leading the process. I learned the hard way what that costs.
I just don’t want you to make the same mistake.
Success Has an Expiration Date (and That’s Not a Bad Thing)