Beyond the Handshake: Debunking 4 Common M&A Misconceptions

A few years ago, I met two brothers—business owners aged 68 and 71—who came to me with a request: they wanted to be out of their business in the next 60 days. They were burnt out, tired, and ready to prioritize family time.

I’ll never forget the look of disappointment when we sat down to discuss how an M&A process actually unfolds. The reality of continuing involvement and the timeline of finding the right suitor was a far cry from the “quick exit” they had imagined.

It made me reflect on a major industry misconception: the idea that you can put your business up for sale and transact as quickly as if it were a house. Below are four common misconceptions I’ve encountered over the years, the reality behind them, and a tip for navigating these dynamics.

1. Misconception: I must walk away immediately after the sale.

  • The Reality: If your buyer is a financial suitor (Private Equity, a Family Office, etc.), they will likely want you to “roll” equity into the new company. This ensures “stickiness” in the deal, allowing you to help grow the company to the next level and participate in a “second bite of the apple” during the next liquidity event. Understanding the true meaning of equity in an M&A transaction is vital to protecting your long-term interests.
  • The Tip: Ensure your process targets investors who align with your personal goals. The breadth and depth of options—from stepping back completely to staying on as a consultant—are vast. Our team of advisors can help you navigate these complex deal structures.

2. Misconception: I’m not ready to sell, so I don’t need an M&A process.

  • The Reality: An M&A process isn’t always about a 100% exit. It is a powerful tool to monetize a portion of your business, bring on a growth partner, and eliminate personal guarantees on debt. You can de-risk your life while staying in the CEO chair. Many owners find that bringing on a growth partner provides the fuel needed to scale without the same level of personal liability.
  • The Tip: Consider a growth partner if you want to execute aggressive initiatives but need added capital and expertise to reduce your personal risk.

3. Misconception: I don’t need to plan until I’m ready to walk away.

  • The Reality: A standard transaction can take 6–9 months, and even then, most owners are required to stay for a transition period. There are legal and operational obligations that often extend well beyond the closing date.
  • The Tip: The best time to plan your exit is years before you actually want to leave. Don’t wait until you’re 60 days from checking out to start the conversation. Learn more about the structured, multi-stage approach we use to ensure owners are prepared.

4. Misconception: The highest offer is always the best deal.

  • The Reality: Price is only one lever. You must find a suitor whose internal capabilities align with your post-close expectations. Factors like employee benefits, company culture, and the potential value of the “second bite” often outweigh minor differences in the initial purchase price. When you receive multiple offers, evaluating the “soft elements” of the deal is just as important as the valuation.
  • The Tip: Review multiple offers. This allows you to gauge the market valuation while ensuring your non-monetary needs—like the legacy of your team—are protected.

“The best time to plan your exit is a few years before you want to fully walk away. Don’t wait until you’re 60 days away from checking out.”

Selling a business is a marathon, not a sprint. By understanding these realities early, you can move from a position of burnout to a position of strength. If you are ready to explore your options, feel free to contact us today for a confidential consultation.