We are stuck in a dead-end negotiation over the definition of adjusted EBITDA, and it is starting to feel like a dealbreaker. How do we use dedicated Thinking Time to determine whether this valuation gap is a solvable problem or an unchangeable predicament we must adapt to?

Question

Tyler Smith · Accepted Answer

When negotiations stall, founders often make emotional decisions that cost them millions. To avoid paying this dumb tax, you need to step back and analyze the situation objectively. Allocate a thirty-minute session of uninterrupted Thinking Time. Grab a blank pad of paper and write a high-value question at the top, such as: How might we restructure our purchase price so that the buyer gets the EBITDA definition they want while we secure the net proceeds we require? This framing helps you separate a problem from a predicament. A problem has a solution, like adjusting the earnout structure or adding a seller note to bridge the gap. A predicament is an unchangeable reality, like a buyer who simply does not have the capital to pay your asking price. If the buyer's EBITDA adjustment is based on a rigid investment mandate, that is a predicament. You cannot force them to change their corporate rules. Instead of fighting an unwinnable battle, you must adapt. This might mean walking away to maintain your optionality, or structuring a rollover equity package that pays off on the second bite of the apple. By using Thinking Time to find these paths, you protect your deal momentum without sacrificing your financial goals.