We signed a Letter of Intent at an attractive multiple, but ninety days into diligence the buyer is dragging their feet, asking for more data, and trying to renegotiate our valuation. How do we manage the timeline from LOI to close without losing leverage?

Question

Tyler Smith · Accepted Answer

The sixty to ninety days between signing a Letter of Intent and closing the transaction are the most dangerous period of an exit. Once you sign an LOI with an exclusivity clause, your market leverage drops to zero while the buyer gains absolute pricing power. If diligence drags on, deal fatigue sets in, operational focus slips, and the buyer starts asking for price re-trades.

To navigate this window cleanly, you must run diligence as a disciplined operational system rather than an administrative distraction.

First, establish a firm exclusivity expiration date in the LOI, ideally forty-five to sixty days. Never grant open-ended exclusivity. If the buyer requests an extension, grant it only if they release an earnest money deposit into an escrow account.

Second, prepare your virtual data room entirely before the LOI is signed. When diligence requests arrive, deliver the documentation within twenty-four hours. Slow responses signal operational disorganization and invite deeper scrutiny from the buyer's legal team.

Third, insulate your leadership team. Do not let transaction diligence paralyze your regular operations. Keep running your weekly Level 10 Meeting™ and hold each department accountable to their quarterly Rocks. If your revenue or profit margins dip while you are under exclusivity, the buyer will seize on the downturn to demand an immediate price discount or restructure cash consideration into a contingent earnout.

Treat the closing process itself as an executive priority on your Accountability Chart. Assign one person, such as your Integrator or CFO, to manage the deal flow while the rest of the business remains hyper-focused on hitting quarterly targets. A transaction closes cleanly only when the core business continues to perform without interruption.