JD Merit M&A Axioms

Reading Time: 2 minutes

Time and time again we see M&A Axioms coming into play for business owners.  We hope this list helps you ask some timely questions of your organization and your investment banker as you contemplate liquidity options.  Enjoy!

  • Time kills all deals
  • If you have one buyer, you have no buyers
  • Think, Know, Prove / Trust but Verify
  • There are only 2 buyer emotions: Fear & Greed
  • Sell on the way up, not on the way down
  • You cannot time the market, but you can be prepared for market moves
  • After you sign the LOI the negotiating power goes to the buyer.
  • 99% of pre-emptive offers are offered at a discount to the market
  • If a buyer does not sell by age 70 – high likelihood, they will not sell
  • On average. sellers overvalue their companies by 59% (Mass Mutual Study)
  • Every deal dies 3 times!
  • 4 D’s – death, disability, divorce, & disagreement (partner)
  • Deal is not done until the deals done! Do not count your chickens or take foot off the gas
  • Buyer and seller are never truly aligned until the check clears (escrow and earn-out released)
  • Selling to a strategic is like turning and battleship – On their time, not yours
  • Businesses are bought not sold
  • Due diligence is Difficult – How difficult? Twice as much as you imagined – unless well prepared
  • An entrepreneur who tries to sell their company his / herself has a fool for a client 
  • Due diligence is a two-way street
  • Customer concentration kills deals
  • Deal killer in M&A is a seller’s value expectation vs. what the market is willing to pay.
  • Deal killer is weak, vague or inaccurate financial reports and controls
  • Financial Buyers can be unimaginative – Give them a path forward and proforma, way to say yes.
  • Best Time to sell? Trifecta of M&A – Personally ready, Business is ready and market Hot!
  • What is the definition of a valuable company? One that does not need you to run it!
  • We all leave our companies one way or another. Horizontally or Vertically – You Decide!
  • When to sell – on the way up!
  • When to sell – 55 years old when achievement and risk aversion are in line
  • Your acquirer will likely fall between 5x – 20x your revenues – “The 5x – 20x rule” 
  • Always leave a little squeeze in the orange for the next guy when selling your company

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email
Scroll to Top

Receive industry insights, news, and more.

Sign up for the JD Merit newsletter below.


1313 Broadway, Suite 350
Tacoma, WA 98402


Seattle/Tacoma WA:
(253) 327-1490

Denver, CO:


Contact Us

Download the Financial Checklist