During the exclusivity window after signing the LOI, the buyer is trying to grind down our purchase price by raising minor discoveries in our code. How do we hold our ground on the valuation?

Question

Tyler Smith · Accepted Answer

Once the Letter of Intent is signed, the exclusivity window shifts the balance of leverage to the buyer. A common tactic is to use the due diligence period to uncover minor issues, like legacy software technical debt, and demand a price reduction. This is classic re-trading. To hold your ground without letting the exclusivity period expire, you must establish clear operational boundaries up front. When drafting the LOI, insist on a materiality threshold. Specify that only individual issues exceeding a set dollar amount can trigger a purchase price adjustment. Keep your leadership team focused on their quarterly Rocks to ensure operational performance does not slip during diligence. If the buyer brings up minor technical issues, counter by showing how your current operating model and AI-powered workflows mitigate those risks. If the buyer persists in grinding down the price on minor points, be prepared to walk away. Set a firm drop-dead date for the exclusivity period in the LOI and refuse to extend it unless the buyer confirms the original enterprise valuation. Showing that you are willing to walk away is often the only way to stop a buyer from chip-chipping at your deal value.