Welcome back to the Mid Market Insider!

Today, I’m diving into why the most dangerous part of a business sale often begins after the LOI is signed.

We’ll talk about how small performance dips during diligence can quietly reopen negotiations, and what disciplined owners do to protect value all the way to closing.

Most business owners assume the hardest part of selling a company is getting to an LOI.

Negotiations. Valuation. Deal terms.

And once the Letter of Intent is signed, it can feel like the finish line is in sight.

In reality, that’s often when the most dangerous part of the process begins.

Something interesting happens once an LOI is signed.

The number feels “locked in.”

After months of uncertainty, owners finally feel like the outcome is clear. Naturally, attention starts drifting back to other priorities or even life after the sale.

In some cases, owners mentally check out of the business.

The problem is that buyers haven’t checked out at all.

In fact, this is when their attention becomes the most intense.

Once the LOI is signed, the buyer enters full diligence.

They’re reviewing financials, validating assumptions, and testing the story behind the business.

But they’re also watching something else very closely:

Current performance.

Even small changes in the numbers during diligence can raise questions.

A slight EBITDA dip.

A missed forecast.

A customer delay.

An operational hiccup.

None of these things need to be catastrophic to cause problems.

They simply change the buyer’s perception of risk.

And buyers price risk aggressively.

If performance softens during diligence, buyers start asking a different set of questions.

Was the business stronger earlier in the process than it is now?

Were the projections too optimistic?

Is something changing beneath the surface?

Sometimes nothing significant is actually wrong.

But perception matters.

When perceived risk increases, negotiations reopen.

That can mean:

And suddenly a deal that felt “done” starts moving again.

Not in the seller’s favor.

The owners who navigate this phase well understand something important:

An LOI is not the finish line.

It’s the start of the most scrutinized phase of the deal.

The best sellers keep running their businesses exactly the same way they did before the LOI.

They stay focused on:

They treat diligence as background noise rather than the main event.

Deals don’t close because of the LOI.

They close because the business continues performing while diligence confirms the buyer’s assumptions.

That requires discipline.

The ability to stay focused on running the company even when lawyers, accountants, and bankers are pulling you into deal conversations every day.

Owners who maintain that focus usually close on the terms they expected.

Owners who lose momentum often find themselves renegotiating under pressure.

And the difference between those two outcomes can be substantial.

Sometimes millions.

That’s all for today’s newsletter! Thanks for reading!

In next week’s edition, I’ll break down how buyers actually think about key employee risk, and why loyalty alone doesn’t reduce it. We’ll look at the systems, documentation, and role clarity buyers expect to see.

Keep building,
Nick