We signed a Letter of Intent with a forty-five-day exclusivity period, but the buyer is dragging their feet on due diligence and requesting non-essential data. How do we keep them on track to close without losing our leverage?

Question

Tyler Smith · Accepted Answer

The period between signing the Letter of Intent and closing is the most dangerous phase of any transaction. Your leverage drops the moment you sign exclusivity, and buyers know that deal fatigue works in their favor. They will slow-walk the process to see if your business performance dips, which gives them an excuse to re-trade the price.

You must establish tight boundaries from day one. First, never agree to an exclusivity extension without a financial penalty. If they want to extend the diligence window past forty-five days, require a non-refundable deposit that is released directly to you. This immediately tests their seriousness and compensates you for the extended market risk.

Second, run the transaction as a major strategic Rock. Assign one person on your leadership team, typically your Integrator, to own the diligence checklist. Do not allow diligence requests to flood your entire leadership team and distract them from daily operations. Use your weekly Level 10 Meeting™ to track diligence progress against a strict timeline.

If the buyer requests non-essential data that is outside the scope of the current diligence phase, push back. Politely inform them that those detailed inquiries are post-close integration matters. Keep the focus on the primary closing conditions. By maintaining operational discipline and showing willingness to walk away if they miss deadlines, you preserve your leverage and force a timely close.