How were these ten mistakes chosen?
Each is a decision the seller makes in a sale, and each comes from a chapter of the FNDRS Playbook, the twenty-eight frameworks we use with founders, published in full. They are not ranked, because what each one costs depends on the business and the deal.
None is a flaw in the business. What a buyer finds in the business itself, from customer concentration to a pending claim, is a list of its own.
1. Going to market before the business is ready
The business goes out to buyers while its financials, its dependence on the owner, or its diligence answers are still unfinished. A buyer reads every gap as risk and prices it with a lower multiple, more of the price deferred, or a longer transition, and some businesses that are not ready do not sell at all. A valuable business that a buyer cannot take without you is what the exit readiness matrix calls a trapped asset.
The fix
Go to market when the business is both valuable and transferable: it runs without you, its numbers are clean, and its licenses and contracts move. Too early means going to market before that, never talking too early: the conversation can start now, and the Go-To-Market Analysis tells you which side of the line the business is on before a buyer does.
2. Not knowing the number you need
A founder goes into a sale knowing what the business might fetch, but not what the next chapter costs after tax, or what would be left after debt, fees, structure, and tax. Without the first, no offer can be judged good enough; without the last, a high headline can look like a yes when it is not.
The fix
Know three numbers before the first conversation with a buyer: what you need, what the market will pay for the business as it stands, and what you would keep. The gaps between them are the strategy: build or combine before you sell if the market will not pay what you need, and choose the structure if it will.
3. Treating the first offer as the market
A buyer calls with an unsolicited offer, and the founder negotiates it alone. The buyer chose the timing, the framing, and the absence of competition, so the offer may be good, but it is rarely the best available, and the founder is often not ready for the diligence that follows.
The fix
Test it with two questions: is it at least what a competitive process would produce, and are you ready for diligence today? Where the answer to either is no, use the offer as a floor for a real process, not as the price.
4. Negotiating with one buyer at a time
Talking to buyers one after another lets each set its own pace and terms, and lets the fastest buyer close the door before the slowest has made an offer. A single buyer is a negotiation; several buyers is a market.
The fix
Run a process that starts wide and narrows on purpose, with set dates for indications of interest and letters of intent, so several credible buyers reach their offers together. In a roofing sale in Missouri, advised by members of the FNDRS M&A team, including at prior firms, that meant eight letters of intent and five groups through to management meetings; the company sold at 7.2x EBITDA, against the 4.5x to 6.0x roofing usually trades at.
5. Comparing offers on the headline price
Two offers with the same headline can leave very different amounts in your account. Between the enterprise value in the press release and the money you receive sit debt, transaction fees, working capital adjustments, escrow, seller notes, earn-outs, rollover equity, and tax, and the offer with the higher headline can deliver less at close because more of it is deferred, contingent, or held back.
The fix
Walk every offer down from the headline to cash at close, line by line, and compare what you would keep, how certain each part is, and when it arrives. The tax lines are your CPA's to advise on.
6. Granting exclusivity before the terms that matter are settled
A seller's leverage peaks when several letters of intent are on the table and falls the moment one buyer is given exclusivity. From then on the buyer has the diligence period, the purchase agreement, and time on its side, and every term still open is negotiated with the leverage on its side too.
The fix
Negotiate price, structure, the working capital peg, escrow, the indemnity cap, employment terms, and the scope of the non-compete while several letters of intent are still on the table, and grant exclusivity only once the offers are in and compared.
7. Accepting an earn-out you cannot influence
An earn-out pays part of the price later, if the business hits targets after the sale. It is dangerous when the founder leaves at close and the metric is EBITDA under the buyer's accounting, because the result is then in the buyer's hands.
Most earn-out money goes unpaid. In SRS Acquiom's 2025 update on earn-out achievement, which covers 100 private-target deals with an earn-out that closed since 2021, life sciences left out, 21 cents of every potential earn-out dollar had been paid to sellers to date, and about 50 cents in the deals that paid any of it. The same update notes that deals with an upfront value of $50 million or less generally see lower achievement.
The fix
Accept an earn-out only on a metric the buyer cannot easily move, revenue or units rather than EBITDA under its accounting, while you stay in a role that influences the result. Have the accounting rules defined in the agreement, integration charges capped, and the earn-out accelerated on a change of control, and keep any earn-out you cannot influence a minor part of the price.
8. Rolling equity because the buyer asked
Rolling equity into the buyer's company is a bet on the buyer: part of the price stays in the business, and is paid only when the buyer sells it again. It makes sense when you believe in the buyer's plan and cash at close already covers the number you need; it is a mistake when you roll because the buyer asked, or because the headline looked better with it in.
The fix
Size any rollover from two things: how much of the number you need cash at close covers, and how much you trust the buyer's plan. When both are high, a rollover of 20 to 40 percent with governance rights can make sense; when only one holds, roll a token amount, or less than the buyer asks. In a roofing sale in Texas, advised by members of the FNDRS M&A team, including at prior firms, the founder rolled 40 percent and continues as CEO with a board seat.
9. Choosing the buyer on price alone
Every buyer scores your business before it offers; few founders score the offer with the same discipline. A buyer that needs financing it has not arranged is less certain to close, one whose plan you do not believe in is a poor home for rolled equity, and one that will change everything you built may matter to your people and your name in ways a few points of price do not cover.
The fix
Score the deal as a buyer scores the business: cash at close against the number you need, the certainty of the rest, your role after close, your people and your name, and your belief in the buyer's plan. Choose on all five, with several offers in hand to weigh.
10. Hiring an advisor without asking how they are paid
Advisors are paid in ways that shape their advice. A pure success fee rewards closing, not the best outcome; a pure retainer rewards time, not results; and anyone paid by the buyer is not your advisor.
The fix
Ask any advisor two questions before you hire them: how are you paid, and what happens if I do not sell? An advisor paid by you alone, with a retainer for the preparation and a success fee for the outcome, the retainer credited against the success fee, has incentives that match yours. That is how FNDRS is paid, and a buyer pays us nothing.
Is it a mistake to start talking about a sale too early?
No: the mistake is going to market too early, never starting the conversation too early. How far out you feel is a poor guide to when to start, and a founder with a number in mind may reach it in two steps: a first sale of a majority stake that takes risk off the table now, with equity rolled into the buyer's company for a second sale later. The second sale may be worth more or less than the first.
In UBS's Investor Watch survey of US business owners, published in July 2023, 81 percent of the 123 owners who had recently sold a business said they wished they had spent more time preparing for the sale. More time does not mean waiting: it means starting the conversation now, so the work is finished before a buyer reads the business.
The ten mistakes at a glance
| The mistake | The fix | The chapter |
|---|---|---|
| Going to market before the business is ready | Go when it is valuable and transferable; start the conversation now | The exit readiness matrix |
| Not knowing the number you need | Know what you need, what the market pays, and what you would keep | The three numbers |
| Treating the first offer as the market | Test it against a process; use it as a floor | The inbound offer test |
| Negotiating with one buyer at a time | Bring several buyers to their offers on the same dates | The tension funnel |
| Comparing offers on the headline price | Walk each offer down to cash at close | Headline vs. take-home |
| Granting exclusivity before the terms are settled | Negotiate what matters while several offers are on the table | The leverage curve |
| Accepting an earn-out you cannot influence | A metric the buyer cannot move, a role that moves it | The earn-out design grid |
| Rolling equity because the buyer asked | Size it on the cash you need and your trust in the plan | The rollover decision matrix |
| Choosing the buyer on price alone | Score the deal as well as the business | The founder's two scorecards |
| Hiring an advisor without asking how they are paid | Ask how they are paid, and what happens if you do not sell | The advisor alignment matrix |
What this list leaves out
The flaws a buyer finds in the business itself, which are the red flags of diligence, and the tax on a sale, which is your CPA's to advise on. Legal terms are your attorney's. This list is the decisions in a sale that are yours, and the frameworks behind each one.