The Most Expensive Cheap Decision You'll Ever Make
Nobody ever lost four million dollars by overpaying their advisor.
However, I do know a founder who built a twenty-million-dollar business and saved thirty thousand dollars on his M&A fee. He then negotiated the rate down from two percent to one and a half. He felt like he’d won the grand prize, and got on with running his business while the process ticked along in the background.
The deal closed four million below its expected value.
There were reasons. There are always reasons. But the one that mattered happened in week nine of exclusivity, when the buyer got cold feet. It’s a move I’ve seen in roughly a third of all deals. It looks serious. It usually isn’t. What it almost always is, is a test: the buyer applying pressure to see whether the seller will move on price if the discomfort gets bad enough.
The advisor took it at face value and advised his client to move.
Someone who’d been through this a hundred times would have recognised it in the first ten minutes of that call. They would have told the founder to hold firm, say very little, and wait a week. The buyer would have found their way back. They almost always do.
Instead the founder had someone working it out in real time. On the biggest deal of his life.
Thirty thousand saved. Four million gone. I tell this story not because it’s unusual.
I tell it because I’ve watched versions of it more times than I’d like. And because the founder in question was smart, well-prepared, and had built a genuinely good business. He just made one bad decision early in the process, in the bit that felt administrative, before anything important had yet happened.
The fee conversation always feels administrative, which is the trap.
A sale process is probably the only high-stakes situation in a founder’s professional life where they walk in as the least experienced person in the room. The buyer’s deal team has done this multiple times. Their lawyers have done it hundreds of times. They know how deals die. They know exactly which levers to press and when. They’ve spent their careers learning to read sellers, and one of the things they’re reading in the early weeks is whether you know what you’re doing.
You’ve probably done this once. Maybe never.
Your advisor is the one person on your side of the table whose job is to match what’s coming at you. Not to process paperwork. Not to manage a timeline. To have been in enough of these that nothing that happens in yours is actually a surprise to them. The structured parts of a deal – the NDA, the management presentations, the information memorandum – that’s all choreography. Both sides know the steps. That’s not where you need experience.
You need it in the gaps.
The late-night call when the buyer’s lawyer introduces a new condition and you have about ten minutes to decide whether it matters. The negotiation where price and structure are both in play at the same time and your advisor needs to know which one to hold and which one to give. The final three weeks when deal fatigue sets in on both sides and momentum either holds or it doesn’t, and you can’t always see which way it’s going until it’s gone.
I’ve been in those rooms. I know what they feel like. I also know what it feels like to look across the table in one of those moments and see someone who’s uncertain. Not incompetent. Just uncertain. Working through something they haven’t quite seen before.
That uncertainty has a price. It showed up in my deals and I wasn’t even the one paying it.
Most founders approach the deal team decision the way they’d pick a plumber. Someone competent, a fair price, comes recommended, doesn’t take the mickey. Which is fine for a boiler. The problem is that a boiler going wrong costs you a few thousand dollars and a cold shower. This is a different kind of decision.
The question isn’t whether the fee is reasonable. The question is whether this person has done your deal before. Not something like it. Not in a related sector. This size, this buyer type, this structure. And if the answer is yes, what does their track record look like in the final stretch … not the deals that ran cleanly, the ones that got hard and still closed.
A senior partner at a firm that knows your space costs more. That’s true. It is also, in my experience, genuinely nothing compared to what the gap in outcome looks like when you get this wrong. The founders I’ve watched handle exits well almost never led with the fee. They led with fit. They found someone who’d been here before, who knew the buyer landscape, who had relationships on the other side of the table that changed how the whole process felt. Then they negotiated the terms sensibly.
The ones who started with the fee mostly regretted it later. Usually at a point when there was nothing left to do about it.
I’ve seen the other side of this too. A founder I worked with had an advisor who’d done forty transactions in his sector. In the final week of negotiation, the buyer pushed hard on a working capital adjustment that would have knocked six hundred thousand dollars off the price. It looked technical. It was designed to. His advisor had seen the same move three times before, knew exactly what it was, and pushed back with enough precision that the buyer dropped it inside twenty-four hours. The founder didn’t even fully understand what had happened until it was explained to him afterwards. That’s what you’re buying. Not hours. Not process. That.
I spent a large chunk of my career inside deals before I started advising founders on them. And the thing that still surprises me, even now, is how late in the process most founders realise what they actually needed from the person sitting next to them. Not organisation. Not process management. Someone who has been in that room before and knows what it costs to get the next hour wrong.
Your business is the most valuable thing you’ve built. You don’t want to find out what it’s worth on the day someone with more experience than your advisor decides to test you.
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