Reading an Offer for Your Business
Work this with the Deal Structure tool.
An Offer Is Three Numbers Wearing One
The letter in your hands leads with a price, and the price is the least decided part of it. Every offer is really three things: the headline number, the terms that say how much of it is cash and when the rest arrives, and the probability this particular buyer actually closes. Sellers who rank offers by the first line routinely pick the wrong one, because a full-price letter from an unfinanced buyer is a five-month exclusivity lesson, while a slightly lower number, mostly cash, from someone a lender has already read, is money in an account. Read all three before you feel anything about the number.
The Terms Under the Price
Take the price apart before comparing it to anything: cash at close, any seller note with its rate and standby terms, any earnout with its triggers, and the working-capital peg that decides how much of the balance sheet travels with the business. Each line moves real dollars. A note is part of your price handed back to you as the buyer's creditor; an earnout is price you only see if the business performs after you leave; a peg set carelessly gives back a quiet slice at closing. The deal-structure tool on this wing prices a note and an earnout against cash so the comparison is arithmetic rather than mood.
The Certainty Read
Signing a letter of intent takes your business off the market while the buyer spends weeks verifying it, so their ability to close is worth real money. Ask what financing conversations have already happened and whether a lender has seen the numbers; a buyer with a prequalification letter and a diligence plan is weeks ahead of one with enthusiasm. Ask what they still need to learn, and how they will fund the equity injection. The exclusivity you grant should match the certainty you see: a prepared buyer can have a normal window, while a vague one earns a shorter clock with milestones that lapse it.
When the Buyer Asks You to Carry a Note
A seller note is normal in deals this size, and lenders often expect one, sometimes on full standby where nothing is paid until the bank is comfortable. Normal does not mean automatic. You are being asked to stay invested in a company you no longer control, so price the ask like the lender you are becoming: how much, at what rate, standing where in line, secured by what, and personally guaranteed or not. A modest note from a strong buyer can bridge a real gap and spread your tax bill across the years the payments arrive; a large note from a thin buyer is your sale price at their risk.
Counter, Accept, or Wait
Counter on terms before you counter on price: cash at close, the peg, the note's standing, and the calendar often move further than the headline will, and they cost a serious buyer less to give. Make one honest counter rather than a series of nibbles, because process discipline reads as a business that runs well. And remember that no offer has to be accepted this season: if every letter arriving is structured thin, the when-to-sell reading on this wing is the honest next page, since a business that does not need to sell negotiates from a different chair entirely.