redactedMost buyers feel like they have earned the deal by the time an LOI is signed. That feeling is one of the things that gets them into trouble. The signed LOI has a specific weight to it. Months of outreach, one owner who decided you were the right person, terms both sides could live with in writing. By the time it arrives, the instinct to exhale is understandable. It feels like the moment a search becomes real. It isn't. redactedWhat the failures have in common is simpler than it sounds. The information was usually there. The problem was in how buyers looked for it, or whether they were prepared to act on what they found. Risk Factor 1 The Diligence That Gets Skipped There is a version of due diligence that is mostly paperwork: pulling tax returns, reviewing financial statements, verifying revenue trends. Most buyers do some version of this. The diligence that actually surfaces risk is harder to do, harder to quantify, and easier to skip when you are excited about the deal. It shows up in questions like these: redactedredactedThe deals that fall apart post-LOI are often ones where the buyer knows enough to feel comfortable but not enough to see clearly. The gap between those two things is where deals die. Risk Factor 2 Owner Dependency: The Problem That Doesn't Show Up in the P&L The single most common post-LOI surprise is not fraud or hidden liabilities. It is owner dependency, and it does not show up anywhere in the financials until it is too late. The business looks profitable because the owner is working 60 hours a week, personally managing the key customer relationships, and carrying most of the operational knowledge in their head. Industry practitioners who track this consistently identify it as the most prevalent valuation risk in small business transactions, and one of the top reasons deals restructure or collapse during diligence. redactedThe buyer who misses this problem is not necessarily negligent. The information is usually there if you ask the right questions. redactedHow this plays out in practice If 30 percent of your revenue lives in two customer relationships that are personal to the owner, and the owner leaves after closing, you are not buying the business you thought you were buying. That scenario has played out in real acquisitions, where both customers moved their business within six months of the previous owner's exit. Risk Factor 3 Emotional Commitment Is Its Own Risk Factor There is a third thing that kills post-LOI deals, and it is rarely discussed in the ETA community because it implicates the buyer rather than the seller. By the time most searchers sign an LOI, they have already decided this is the deal. They have pictured themselves running the business. They have mentioned it to people. The commitment is emotional before the diligence is complete. And when diligence surfaces concerns, declining margins, customer concentration, a lease dispute, a key employee who is already half out the door, the emotionally committed buyer rationalizes rather than adjusts. redactedWhy This Matters Before You're in the Room Most content about post-LOI failures is written for people who are already in due diligence. But the value of understanding these patterns comes earlier than that. It is found in how you evaluate an opportunity, how you structure your initial conversations with an owner, and what questions you are already asking before you ever put a number on paper. Knowing that owner dependency is the most common source of post-LOI surprise changes how you run the first few owner conversations. Knowing that emotional commitment clouds diligence changes how you build your process before you are attached to any particular deal. The LOI gets signed when both sides agree that there is enough here to pursue seriously. Everything that happens after it determines whether they were right.