28 Aug When Sellers Get Cold Feet: Staying Confident Through M&A
EPISODE 227. This episode of Shoot the Moon explores the emotional and practical challenges sellers face during the M&A process. Matt Lockhart and Ryan Barnett discuss why sellers often experience “cold feet,” what triggers uncertainty, and how advisors can guide them through preparation, diligence, and negotiation. The conversation highlights the importance of clear expectations, advisor support, and maintaining confidence through every stage of a deal.
Episode Notes:
- Seller Hesitation: Common due to identity tied to business, timing doubts, and emotional strain.
- Preparation Stage: Proper financial, marketing, and buyer prep helps set realistic expectations.
- Valuation Shock: Sellers often question decisions after seeing valuation numbers—advisors help manage expectations.
- Diligence Process: Demanding, sometimes invasive; advisors keep momentum, filter excessive requests, and provide clarity.
- Definitive Agreement: Overwhelming but manageable if focus stays on critical deal terms (e.g., reps & warranties).
- Final Stretch Fatigue: Negotiations often leave both sides slightly dissatisfied—a sign of balance in deal-making.
- Advisor Role: Part deal-maker, part counselor, part “bartender” listening ear; critical in sustaining motivation.
- Managing Fear of Unknown: Build certainty through qualified buyers, realistic valuations, and clear legal terms.
- Wellness Tip: Sellers should take breaks (vacations, weekends) post-LOI to recharge and avoid burnout.
- Outcome Vision: Keep focus on strategic fit, cultural alignment, and long-term financial reward
RELATED EPISODES:
- Episode 219: Seller Readiness: What To Do When a Buyer Comes Knocking. Listen now >>
- Episode 217: How to Keep a Level Head During an M&A Process. Listen now >>
- Episode 201: Restarting the M&A Journey: Strategies for Sellers After a Failed Combination. Listen now >>
Listen to Shoot the Moon on Apple Podcasts or Spotify.
Buy, sell, or grow your tech-enabled services firm with Revenue Rocket.
EPISODE TRANSCRIPT
0:18 — Matt
OK. Hello and welcome to this week’s edition of the Shoot the Moon Podcast, brought to you by Revenue Rocket—the M&A people for IT services companies worldwide.
Thanks for joining us today. With me is my partner, Ryan Barnett. We’re missing our fearless leader, Mike Harvath, but he should be back shortly. I’ve got an interesting—and important—topic today. Ryan, how are you doing?
0:56 — Ryan
Hey, Matt—thanks for having me. I’m doing really well. Here at Revenue Rocket, we’re M&A advisors for IT services companies, and we work with buyers and sellers every week.
A couple of things popped up recently: sellers who are mid-process suddenly asking, “Wait—is this the right time? Is this the right deal?” They’re getting cold feet. Selling a business is complicated—emotionally and legally—and getting everyone aligned to get a deal done is a big lift.
At some point sellers will say, “Am I doing the right thing?” You’ve been working with a lot of buyers and sellers lately. How common is cold feet in the M&A process, and where do you see it show up?
2:12 — Matt
Great topic. Let’s set the stage: a lot of firms we work with, especially in IT services, are founder-led or partnerships. Owners have poured themselves into the business; much of their net worth is tied up in it. They’ve built great teams and relationships.
So when it’s time to sell—whether you’re selling in (joining a larger platform) or selling out (starting a new chapter)—it’s a distinct end of a chapter. It’s natural to ask: Is now the time? Is this right for me, my team, and my customers?
That emotional response can pop up at various times. Today we’ll talk about how to manage it and stay the course.
4:47 — Ryan
Right—your identity is tied up in your company. When that “baby” may no longer be yours, you have that moment: “Do I really want to do this?” Most sellers go through this—maybe multiple times.
If you break the process apart, first there’s the decision: is it time? Having data helps—do you have a number in your head? Is the business positioned to achieve it? Do you have the right people and processes in place?
I’m curious about the triggers. Some are emotional—letting go. Others are practical—fatigue with the process. Have you seen sellers get tired and say, “We haven’t found the right deal; I’m tired of searching”? How do you help them see the light at the end of the tunnel?
6:53 — Matt
Part of it is clarity and managing expectations from the start. This process takes time.
First, preparation: marketing materials, financials, ideal buyer profiles, and who’s involved on the seller’s side. Being well-prepared is critical to finding the right buyers and maximizing value.
Then the marketing phase: lining up and engaging interested buyers—also time-consuming. It can feel like there’s lag in both stages. So we set realistic timelines and are transparent about progress—at least weekly.
We also check in on how sellers are feeling. After the LOI (letter of intent), diligence begins—that can be arduous. You’re “baring the soul” of your company. We keep the eye on the prize: you started this for a reason; we found a strong option; let’s focus on the outcome.
Contract negotiations can be hard too—terms, risk, ongoing role. We work to bring buyer and seller together relationally so they get comfortable and start discussing post-close strategy for team and clients. Throughout, we manage expectations, stay transparent, and keep everyone focused on the finish line.
12:42 — Ryan
Early on—in packaging—you help shape the story; we don’t see much cold feet there. The valuation moment is real: “This is my number.” Having realistic expectations of what the market will bear is critical, and a good advisor helps.
Next, you’re meeting buyers, seeking strategic and cultural fit—and someone who meets valuation expectations. There’s a lot of back-and-forth. Having an advisor by your side is critical.
14:28 — Matt
Absolutely. You want a team with experience. An old lawyer friend said a dealmaker is part counselor, part dealmaker, part bartender—the “bartender” being an ear for the seller.
That advisor relationship is critical not just to getting the deal done, but to keeping people motivated throughout.
15:48 — Ryan
You mentioned unknown timelines and many people involved. How do you help sellers get over fear of the unknown—post-sale outcomes, the closing table, where the deal could go?
16:22 — Matt
We identify the ideal buyer profile early and then demonstrate traction against it as we qualify buyers—building certainty that goals can be met.
Financially, we set valuation expectations based on experience and then validate them. Finally, we manage deal terms to protect the seller. That’s where our work intersects with legal—ensuring the right counsel is in place and timelines are managed.
19:02 — Ryan
Fast-forward: we find the right buyer and sign an LOI. Then diligence. It can be burdensome and feel invasive—customer contracts, employee agreements, deep dives into sales/marketing and metrics.
What advice helps sellers get through diligence and keep eyes on the prize?
20:50 — Matt
Lean on your advisor’s team. Set expectations for the level of detail required (e.g., service-line revenue by customer). Be prepared and let analysts help organize and present information.
We also ensure clarity on what’s appropriate to request—sometimes buyers ask for “everything,” including irrelevant items. We manage scope and momentum, which should matter to both parties.
24:24 — Ryan
After diligence, definitive agreements arrive and sellers often think, “Whoa—what is this?” It’s a lot of legalese. What should they expect, and how do you help separate real risk from boilerplate?
25:15 — Matt
These documents are long, but only a few sections are truly critical. One example: reps and warranties—personal representations about the business. We prepare sellers on what’s typical and what they must be comfortable representing.
We also help manage the legal teams to a timeline, highlight likely friction points, and keep momentum. As you near the finish line, the picture of “what it means after closing” becomes more real.
28:01 — Ryan
Keeping the client engaged and translating between legal risk and practical reality matters. Papering can feel counter to getting a deal done.
28:44 — Matt
It comes back to confidence—start with it, keep it, end with it.
29:09 — Ryan
Almost every deal reaches a point where everyone’s a little unhappy and exhausted—usually right before close. How do you help sellers get over that final hump?
30:00 — Matt
We set expectations early: negotiation brings people to the middle. You’ll give on some things and get others. Some asks you won’t like—that’s normal.
Remember: it’s business, not personal.
31:39 — Ryan
With the right partner at your side, it’s easier. Keep momentum, address doubts, visualize the future, and remember the “why”: strategic 1+1>2, cultural fit, and a rewarding financial outcome—maybe even generational wealth.
When you reach the finish line—whether selling in to build something bigger or selling out to start a new chapter—confidence and clarity make it easier. Any wrap-up thoughts?
33:03 — Matt
Great topic, Ryan—always a pleasure. One more thing: take breaks. After you sign an LOI is a great time for a short vacation. Take mini-breaks throughout the process. That’s why you’ve hired a team so you don’t burn out and you hit your goals.