When negotiating the sale of your company, remember that it is precisely that: a negotiation. Upon receipt of an LOI that’s within range of your expectations, it’s important to get on the phone with the buyer to review the T&Cs. Your goal is to understand the term sheet and set a positive tone for further discussions, but be careful not to imply agreement to certain buyer conditions.  Even a passive or inferred suggestion that you’re “OK” with unattractive terms, or complex and unusual frameworks, will only cause problems later.

And the inverse is equally true; that is, be clear when you don’t agree with issues that seem unreasonable, and explain why. You don’t have to argue the case at this point, but it helps to put preliminary concerns on the table for further discussions once your M&A counsel is fully engaged. Once the negotiation progresses, it can be costly to bring up issues that could have been addressed when the offer was initially presented.

​This approach saves backtracking, streamlines the LOI process, and sends a clear message to the buyer that you’re a competent negotiator. Stay tuned here for more tips on becoming a master negotiator.