Our leadership team holds minority equity stakes, and the buyer's LOI requires unanimous consent, which is giving one dissenting team member veto power over the sale. How do we handle this internal friction to prevent a complete deal breakdown?

Question

Tyler Smith · Accepted Answer

Internal shareholder misalignment can destroy a deal faster than any external buyer. When a minority shareholder threatens to veto a sale, you must address the issue immediately using your standard conflict resolution framework.

Bring the core issues to light. Is the dissenting member concerned about their post-close role, the valuation of their equity, or their future career path? Have a direct conversation to understand if they possess the GWC for the transition and whether their personal goals align with the company's long-term V/TO.

Review your existing shareholder agreement. Check if you have drag-along rights that allow a majority of shareholders to force a sale of the company. Even if you have these legal rights, it is always better to reach a consensus rather than forcing a transaction, which can lead to post-close litigation or operational disruptions.

If the issue is financial, consider adjusting the allocation of the transaction proceeds or structuring a separate retention bonus pool for key leaders. Show them how the sale benefits the entire team and provides new growth opportunities. By resolving this internal friction constructively, you present a united front to the buyer and protect the deal.