The terms that didn't make it into the agreement

The letter of intent is signed. You're in exclusivity. You've stopped talking to anyone else, and now the real work starts.

Most owners think of diligence as a document request — a long list of things the buyer wants to see, and your job is to produce them. That's part of it. But running alongside the document production is something less visible and considerably more consequential: negotiation.

It doesn't happen at a table. It happens in pieces, scattered across weeks, in emails and calls that don't announce themselves as negotiations. And it gets heavier as the quality of earnings analysis comes back, because the QofE is where the buyer's accountants tell them what your business actually earns — and every adjustment they make becomes a reason to revisit something.

You know how to negotiate. You don't know how to negotiate this.

Here's the trap I walked into.

I had negotiated contracts for my business for years. Service agreements, subcontracts, leases, supply terms. I knew that vocabulary. I knew where the risk sat in those documents and which points were worth fighting over.

None of that transferred.

Negotiating the sale of a company uses a different vocabulary with different consequences, and it is very likely something you will do exactly once in your life. Competence in the first kind of negotiation feels like competence in the second kind. It isn't.

About the brokers

I'm going to speak poorly of some people here, so let me be clear up front: they are not all like this. There are good brokers and good investment bankers, and you may well find one. The problem is that when it's your first time, you have almost no way to tell which kind you have.

Mine were not very good.

What I got, repeatedly, was some version of well, that's market. Or do you want to sell your business or not?

Both of those are conversation-enders dressed up as answers. And I accepted them, because I had no independent basis to push back. I didn't know what "market" was. I couldn't tell whether I was being informed or managed.

Looking back with what I know now, the buyer wanted my business. They wanted it more than I understood at the time. I had leverage sitting right there and I didn't use it, because nobody told me I had it — and the people positioned to tell me had their own reasons to keep the deal moving.

Leverage you don't know about is leverage you don't use.

The working capital problem

The worst of it involved working capital.

Most deals include a mechanism where the parties agree on how much working capital the business should have at closing, and the price adjusts up or down depending on where it actually lands. It sounds technical. It is not small — it can move real money, and it gets settled after you've already signed.

We negotiated some of these terms. We reached what I thought was a decent agreement on a few of them. And I believed my broker would make sure that agreement found its way into the purchase agreement.

It did not.

I didn't know to go check. I especially didn't know to check because the final documents didn't arrive until the day before closing — which is not enough time to discover a problem, let alone fix one.

If I had understood how much those particular terms mattered, I would have been asking about them weeks earlier. Repeatedly. In writing.

Why this is worse in Texas than you'd guess

This is general background rather than advice about your deal, and your own attorney is the person to talk to about your documents. But it's worth knowing the ground you're standing on.

Texas courts take the written agreement seriously. When a contract is integrated into a single final document — and purchase agreements essentially always are, via an "entire agreement" or merger clause — prior negotiations on the same subject are generally excluded from consideration. Written or oral. Courts stay within the four corners of the document unless something in it is ambiguous.

Which means the email chain where you and the buyer agreed to something is not a backup copy of your deal. If the term didn't make it into the purchase agreement, then in a very practical sense it isn't part of the transaction, and pointing at the negotiation history afterward is a much harder road than most sellers imagine.

The document is the deal. Everything else is history.

What I actually needed

I didn't need someone to tell me this once, in a meeting, as a piece of general education. I'd have nodded and forgotten it, the same way I nodded at the attorney who told me to start preparing two years out.

I needed someone in my corner who understood the specific deal I was negotiating and who would have raised it over and over — weeks ahead of closing, then again, then again — until I had confirmed with my own eyes that those terms were in the document I was about to sign.

That's an unglamorous job. It's mostly nagging. But it's the difference between the deal you negotiated and the deal you actually signed.