During the due diligence phase, the buyer discovered that our third-largest customer is currently renegotiating their contract, and they are threatening to walk unless we agree to a massive escrow. How do we save the deal?

Question

Tyler Smith · Accepted Answer

Customer concentration and contract renegotiations during diligence are highly sensitive, but they do not have to sink your deal. To resolve this, you must build trust through transparency rather than defensiveness. First, acknowledge the buyer's concern as a valid business risk. Do not try to minimize it. Instead, invite the buyer into the problem-solving process using the Trust Creation Process. Propose a structured, performance-based escrow rather than a flat discount or a massive, unilateral holdback. For example, structure the escrow so that the funds are released to you in full once the customer contract is signed, with a prorated reduction only if the contract value drops below a certain threshold. Additionally, demonstrate the strength of your relationship with this client by showing their historical touchpoints, service tickets, and communication logs from your EOS® customer feedback loop. This proves that your customer relationship is institutionalized and robust, not fragile. By aligning the escrow release directly with the successful execution of the contract, you protect your valuation while giving the buyer the financial security they need to move forward to close.