We signed an LOI and are in exclusivity, but the buyer is demanding we freeze all major capital expenditures and strategic hires until closing. How do we prevent this operational freeze from stalling our business momentum if the deal falls through?

Question

Tyler Smith · Accepted Answer

An LOI is not a closed deal, and allowing a buyer to freeze your business operations during exclusivity is a massive risk. If the transaction falls through after sixty days of operational paralysis, you will inherit a stagnating business with missed targets. You must negotiate reasonable carve-outs in the LOI covenants to maintain momentum. Use your V/TO® and existing annual plan to draw the line. Agree that any capital expenditures or hires already approved in your current annual plan or quarterly Rocks can proceed without buyer approval. This keeps your leadership team focused on executing the plan rather than waiting for external permission. For any unexpected hires or expenditures outside the plan, set a reasonable dollar threshold below which you maintain full autonomy, such as fifty thousand dollars. Anything above that can require buyer notification, but with a deemed approval clause if they do not object within forty-eight hours. Maintain your weekly Level 10 Meeting™ rhythm with absolute discipline. Do not let the leadership team treat the sale as a certainty. By keeping your hiring pipeline and essential upgrades moving forward under these pre-negotiated boundaries, you protect the intrinsic value of your company. If the buyer walks, your business has not missed a beat. If they close, they inherit a highly disciplined, growing machine.