Why Terms Win Deals
In every sale or acquisition, there’s a point where numbers stop mattering and structure decides the outcome. The best buyers and sellers know a deal’s real value lives in its terms, not the headline price.
Core Insights
Working capital can hide surprises. The purchase price can stay fixed while post-closing adjustments can quietly swing the money significantly. Precision here puts real money back in the right pocket.
Definitions decide dollars. Words like debt, cash, or working capital sound standard, but the fine print determines where the last dollar lands.
The first draft wins. Whoever sets the opening structure defines the field. Most negotiations are just edits to the first drafter’s framework.
Taxes rewrite the deal. Two identical prices can yield very different after-tax outcomes. Structure decides what you actually keep.
Post-close obligations are the hidden price. Non-competes, consulting, and transition services carry hidden costs. They’re just paid in time instead of cash.
Indemnities and survival set the risk horizon. These clauses define how long a deal can echo after closing. Shorter survival buys freedom; longer survival buys comfort.
Escrows and holdbacks are leverage disguised as security. Roughly ten percent of the deal often sits in escrow to cover claims. A smaller holdback signals confidence; a larger one signals caution.
Takeaway
Great deals don’t fail on price, they fail on structure. CEOs who treat legal terms as business terms close cleanly and move on. Those who don’t, keep negotiating long after closing.
Ink LLP is a business law firm with focused expertise in venture capital, mergers & acquisitions, and complex commercial transactions.
This information is provided for informational purposes only, is highly generalized, and is not legal advice.