Welcome back to the Mid Market Insider!

Today, I’m breaking down why selling a business is much more than agreeing on a price… and how deal structure and terms often matter more than valuation alone.

We’ll talk about the layers owners overlook, and how understanding them early gives you leverage and prevents deals from unraveling later.

If you think selling your business is as simple as picking a number and finding a buyer, think again.

The sale process has layers. And most deals don’t fall apart because of one big mistake… they fall apart because owners underestimate those layers until they’re already deep in the process.

That’s usually when leverage is gone and stress is high.

One of the biggest misunderstandings I see is around deal structure.

A sale isn’t just a price. It’s often a mix of cash at close, earnouts, seller notes, and sometimes rollover equity. Valuation gets all the attention, but structure often matters just as much.

A “high valuation” doesn’t mean much if a large portion of the proceeds are deferred, contingent, or exposed to risk.

Two deals with the same headline number can produce very different outcomes for the seller.

Working capital is another area that trips owners up.

Buyers want confidence the business can operate on day one without scrambling for cash. Misalignment here often leads to last-minute negotiations or tension right before close.

Legal concepts matter too. Representations, warranties, and indemnities aren’t just legal formalities, they’re tools to allocate risk between buyer and seller.

When owners first encounter them late in the process, they often feel adversarial, even when that’s not the intent.

To be clear, the goal here isn’t to fully educate anyone on every technical detail of a transaction in one newsletter.

It’s simply to make you aware that these components exist, and that they matter.

Too many owners don’t encounter deal structure, working capital mechanics, or risk allocation until they’re already in a live deal. At that point, options narrow and pressure increases.

Understanding the basic building blocks of a transaction before you list your business gives you control. It allows you to ask better questions, set realistic expectations, and reduce friction throughout the process.

That early awareness and preparation is often the difference between a smooth sale, and a stressful scramble that leaves money on the table.

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

In next week’s edition, I’ll walk through the 5 red flags buyers spot almost immediately, often in the first meeting or facility tour, long before diligence even begins.

These aren’t subtle issues, and even one of them can quietly kill a deal before it ever gets started.

Keep building,
Nick