redactedWelcome to Edition 2 of my monthly Deal Nightmare newsletter. Deal life is all about solving problems and obstacles, and the objective of these newsletters is to give you real issues we encountered this month and how we solved them, so that when you encounter them, you have a reference point to move forward. Our story today is about "When Fully Protected Is the Wrong Goal": A Deal Readiness Lesson for Brokers The instinct to negotiate complete protection into every agreement is logical, and usually the right one. But sometimes the commercially reasonable move is to accept a less protective document, with real gaps in it, in order to clear an immediate hurdle. That only works if the risk being accepted is understood and deliberately chosen. Here's a recent file that shows exactly why that distinction matters, and why it's a deal readiness issue brokers should be watching for. No sale was being planned in this story. But it's exactly the kind of file that shows why deal readiness matters long before a business ever lists. The gaps that sink deals rarely get created in the weeks before a sale. They get created years earlier, sitting quietly in a contract nobody has looked at since it was signed. In this story, a software company loses its developer relationship abruptly. The original development agreement had some good protections, but it was missing a transition plan, a code escrow, and clear handover terms, and those gaps turned into a full standoff. The developer withheld the code and data over a dispute about amounts owing, and with no transition terms to fall back on, the business couldn't service its own clients because it didn't actually control its own code and data. Every day without access was a day the business couldn't operate normally and a day its value was quietly eroding. This is one of the most common and most underestimated risks sitting inside software and SaaS businesses, whether or not anyone is thinking about a sale yet. Here's why this matters to brokers now rather than later: this kind of gap doesn't cause a problem the day it's discovered. It causes a problem the day a buyer's diligence team finds it, often months after a broker has already invested time bringing that client to market. It can also cause a problem the moment the developer catches wind that a sale is happening and locks up the code over money they say they're owed, suddenly using leverage they always had, right when the business can least afford the disruption. By then, there's no room to fix it quietly. It shows up as a valuation hit, a delay, a standoff that has to be resolved under pressure, or a deal that falls apart. The instinct in that standoff was to hold out for a complete, fully protective agreement before handing anything over. That instinct felt responsible. But insisting on full protection at that moment would have kept the company locked out of its own code indefinitely. The business didn't need a perfect agreement. It needed access now, so the decision was to sign a short, narrow agreement covering only what was necessary to get the code back, deliberately leaving broader protections for later. Any software or SaaS client, whether they're thinking about a sale next year or not at all, either has a real answer for what happens if their developer relationship ends tomorrow, or they don't. The ones who don't are carrying a problem that gets more expensive the longer it goes unnoticed, and a lot cheaper to fix now than it will be mid-diligence later. If you have a software or SaaS client, whether or not a sale is on the horizon, this is worth a conversation before it becomes their problem to solve under pressure.redacted