7 Times You Know Your Deal is Dead

November 30, 2021

by a professional from Harvard University - Harvard Business School in Atlanta, GA, USA

Don’t waste your time on a deal that’s bound to die! Here are 7 scenarios that you should look out for:

1. The seller repeatedly presents a good alternative to selling

2. The seller still has not engaged a lawyer or CPA halfway through diligence

3. You spot a malicious integrity issue with the seller or company

4. The seller is already competing with the business you’re buying before the deal is done

5. The seller attempts to raise the price a second time during due diligence

6. You cannot see a path to proficiently running the business on day one after close

7. You see a cliff coming in that industry or in that company

DM me for a copy of my white paper that goes into more detail.

When have you spotted a deal was going south? What tipped you off?

Reply by a searcher
from HEC School of Management, Paris in Gold Coast QLD, Australia

Thanks Elliott, always enjoy reading your insight (and great workshops). Though I'm still in the early days, I've encountered #6-7, where a business saw a nice spike in revenue during the pandemic, and I felt that the owner was just looking to sell high. A potential drop just became too risky, and I unfortunately had to let it go.

Reply by a searcher
from University of Pennsylvania in Tucson, AZ, USA

one that was a bit counterintuitive was the seller agreeing to a pretty significant reduction in price without disputing too much... made us nervous. turned out that the deal wasn't what it appeared and we had to walk anyway. Sometimes tough negotiations are a good sign...

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