The buyer wants a ninety-day exclusivity period in the Letter of Intent to perform due diligence, but we are worried they will use this long window to drag out negotiations and wear us down. How do we structure the LOI-to-close timeline and milestone triggers to keep the pressure on the buyer?

Question

Tyler Smith · Accepted Answer

A long exclusivity window shifts all the leverage to the buyer. Once you sign that Letter of Intent, you cannot talk to other interested parties, and the buyer knows it. They will use deal fatigue to make you accept unfavorable terms right before closing.

To prevent this, never agree to a blanket ninety-day exclusivity period without conditions. Instead, structure the exclusivity in shorter, milestone-based blocks.

Start with an initial thirty-day period. This window should be contingent on the buyer completing their Quality of Earnings report and delivering a drafted asset or stock purchase agreement.

If they meet those specific milestones, they earn a fifteen-day extension to finalize their legal and insurance due diligence. If they fail to meet any milestone, the exclusivity automatically terminates, allowing you to walk away or talk to other buyers.

Make it clear in the agreement that the clock is ticking. Use your internal leadership team meetings to assign responsibility for due diligence requests as Rocks. This keeps your team focused on delivering requested files within forty-eight hours, removing any excuse the buyer has to delay.

By structuring the exclusivity around performance, you keep the buyer focused, shorten the transaction timeline, and protect your valuation from late-stage price chipping.