Hi Reader,

Buyer competition is fierce this year. Everyone’s fighting over the same deals with the same playbook.

Last issue I introduced the 6C Deal Operating System. Today we’re going a step deeper into deal psychology — because this is where the real edge is. This is your secret weapon.

Here’s what I’m going to cover:

Why sellers behave the way they do. Why the most common approach to negotiation backfires. And how the 6C system handles what most buyers get wrong.

The problem: sellers are not rational actors

If you built something — poured decades into it, missed weekends, worked late nights, fought through the hard years — you’re always going to think it’s worth more than someone who didn’t put in that work.

That’s not greed. That’s human nature. The seller sees the story of their business. You see the numbers. Those are never the same thing.

And selling isn’t just a financial event. It’s a catalog of losses — income, routine, status, identity, purpose. Losses hit twice as hard as gains feel good. So from the seller’s chair, every conversation about price is a conversation about what they’re giving up.

This is the landscape you’re operating in. An emotionally attached owner making one of the biggest decisions of their life. If you don’t account for that, nothing else you do will land.

What most buyers do (and why it fails)

Most buyers show up with credentials and a sharp offer. They think the money does the talking.

And in big corporate deals — $20M+ transactions with boards of directors and officers — that’s exactly right. Corporate buyer comes in, big check wins.

But that is not what this is.

In the deals we’re talking about, the business is the seller’s baby. They want to know they can trust who they’re handing it to. They need the connection. Money is still the reason they’re selling — don’t let anyone talk you out of that — but warmth builds trust faster than corporate speak or dollars ever will.

Lead with credentials and you trigger threat. Lead with warmth and you open the door to everything else.

This is what the 6C system calls Connection — and it’s the stage most buyers skip entirely. They jump straight to the numbers and wonder why the seller goes cold. Connection is the foundation. Without it, every conversation after it is harder than it needs to be.

But even buyers who build a good relationship with the seller make another critical mistake: they punt.

The Punting Tax

Most buyers save the hard conversations for later. Get close enough on price, write the LOI, figure out the complicated stuff after.

Here’s what that actually costs.

Take net working capital. Without it, you’re buying a car without fuel to run it. You buy the business but need to inject your own money just to operate it. For deals north of $3M, it’s standard for sellers to include the working capital — the cash and receivables needed to keep the lights on.

But lots of buyers find this to be an uncomfortable conversation. So they leave it vague at LOI. Or leave it out entirely, thinking “we’ll discuss it later.”

I’ve seen what happens when “later” arrives.

Sixty days into diligence. Everyone has spent over $40K in legal and accounting fees. Buyer thinks he needs $400K in net working capital. Seller thinks that number is closer to $150K.

That is a $250K gap. Sixty days and $40K too late to bridge it.

Now the buyer has two options. Close the deal massively short on working capital — meaning you’re injecting your own cash on day one just to keep the business running. Or walk away and eat the $40K.

Both options are terrible. And both were completely avoidable.

Your leverage is highest on day one. It decays from there. Every week of diligence, every dollar spent, every conversation where you get more excited — your leverage drops. The seller can feel how invested you are. And a seller who knows you won’t walk doesn’t need to give you anything.

Have your hard conversations early. When walking away is free.

In the 6C system, this is Convergence — aligning on material deal terms before the LOI, not after. Most buyers treat the LOI as the starting line. The 1% buyer treats it as the finish line of a conversation that’s already happened.

Your LOI is a virtual contract. Treat it that way.

I hear it all the time from buyers: “It’s not binding anyway” or “We can just change things later.”

Big mistake.

Here’s the reality. Humans are wired so that when we sign something, we act consistent with it. An LOI is what I call a virtual contract — the moment it’s signed, both sides treat it as the deal.

Don’t believe me? Try this. When a seller starts to take a different position later in the deal, say: “Hey, let’s be consistent with the LOI.”

I have never heard a seller respond with “it’s not binding anyway.” They get right back in line.

It works both ways. If you as the buyer try to deviate from the LOI, the seller pulls the “don’t retrade” card. Fast.

So if both sides treat the LOI as binding in practice — even when it’s technically not — why would you treat it casually?

The more detailed and aligned your LOI is, the harder it is for either side to walk it back. That’s not a legal technicality. That’s a deal asset.

This is Commitment in the 6C system. A well-built LOI doesn’t just memorialize terms — it locks in psychological momentum. Walking away from it feels like loss and inconsistency. That feeling works in your favor.

Why fully seller-financed deals almost never close

100% seller financing sounds good in theory. Horrible in practice.

First, you’re asking the seller to hand over their business to someone they regard as not having saved up enough money to buy it. You’re already behind the eight ball.

But here’s the bigger problem.

Even when everyone’s aligned at the beginning, there are guaranteed to be hurdles. Friction. Annoyances. Things that make the seller question whether this deal is worth it.

In a typical deal, the cash at closing is a huge motivator. It’s a big part of what I call Deal Conviction — the thing that keeps the seller pushing through the rough patches. Getting a $2M check at close is concrete. It’s real. You can see it.

Getting a stream of potentially uncollectable — or at least dubious — income in the future? Not even in the same realm.

So when things get rough — and they always get rough — the seller’s motivation wanes. And then it disappears. The deal dies not because of a blowup, but because the seller quietly stops caring enough to push through.

That’s the part of seller financing that the gurus don’t talk about.

In the 6C system, this is Conviction. The 1% buyer keeps the seller’s reward visible throughout: regular financing updates, milestone confirmations, consistent reinforcement that closing is coming and the payday is real. Conviction is what carries the deal from LOI to wire transfer. Without it, deals die in the gap.

What to do this week

Look at whatever deal you’re working right now. Ask yourself two questions:

First: am I building real connection with this seller, or am I leading with credentials and hoping the offer speaks for itself?

Second: are there hard conversations I’m avoiding? Terms I’m planning to “figure out later”?

If the answer to either one is yes, fix it now. Before the LOI if you can. Before diligence spend locks you in. When walking away is free and your leverage is at its peak.

If you’re saving the hard stuff for the purchase agreement, you’re not negotiating. You’re paying the Punting Tax.

Next issue: I’m breaking down the five seller types and how to read each one in the first conversation. If you’ve ever walked away from a meeting thinking “I have no idea what that seller actually wants” — that one’s for you.

Stay safe.

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