The case for selling your business for slightly less
Every so often a valuation lands on our desk that is technically defensible and commercially reckless. The multiple has a footnote, the comparables are real, and the number — if actually paid on schedule — would leave the company unable to replace a van without a board discussion.
Here is the pattern we have watched play out across a decade and a half of transactions. Owners who priced their EOT sale at what the business could comfortably pay got paid — on time, in full, and usually with warmth. Owners who priced at the top of the defensible range spent years watching every management account with their stomach tight, renegotiated at least once, and arrived at the end of the schedule with the relationship strained precisely where it was meant to be proudest.
The uncomfortable arithmetic is that in a vendor-funded deal, the seller holds the risk either way. A lower price paid reliably is not generosity; it is the seller buying certainty with money they were unlikely to see on the optimistic schedule anyway. We have come to think of roughly ninety percent of the defensible maximum as the price of sleeping well — and we notice the sellers who take that view are also the ones invited back for the barbecues.
None of this argues for underselling. It argues for pricing against the bad year, not the good one — because over a five-to-seven-year payment period, the bad year will attend.