The Seller's Power Shift: How to Defend Valuation After the LOI
Praveen Ghanta, Founder and CEO of DevHawk
Twenty-four hours before diligence expired, the buyer's board came back and cut the offer by almost 50%.
Praveen Ghanta bootstrapped HiddenLevers to over $8M ARR at 52% EBITDA and signed an LOI at 16x ARR. Then a $2M enterprise contract with TD slipped, and the private equity owners behind the buyer, Orion, took an ax to the price. Praveen walks through three rounds of renegotiation, setting a walkaway number, and landing around $130M with a small earn-out.
He also covers what to define in the LOI before exclusivity, how he cut a $600K sales tax…
The skinny
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