Hi Reader

Picture this:

You’ve done the hard work. Found the business. Pitched your offer. But your Letter of Intent (LOI) still got rejected. Why?

Most buyers assume it’s the price. It usually isn’t (sellers usually will negotiate if it is). In fact, it’s often about something far less obvious—but entirely within your control.

Today, I’ll break down the real reasons LOIs get rejected. Four, to be exact. By the end, you’ll know how to avoid the mistakes that cost deals.

Let’s get into it.

1. Sellers Don’t Like You. Yes, it’s that simple. Business sales are emotional. Sellers are passing on something deeply personal—years of work, risk, and sacrifice.

They want to trust the person taking over. If you come across as too corporate, overly aggressive, or (worst of all) disinterested, you’ll lose.

Think about it: Would you sell your business to someone you didn’t like? Neither will they.

How to fix it: Be likable. Build rapport. Take the time to understand their story, not just their P&L. Sellers remember how you make them feel—so focus on making a good impression.

2. Your Terms Are Too Complex. Most sellers aren’t M&A experts. They’ve never heard of "forgivable note" or "Net Working Capital" much less navigated the fine print of a detailed LOI.

When the deal structure feels overwhelming, sellers will default to a simple answer: “No.”

How to fix it: Keep it simple. Structure your offer in clear, straightforward terms. Avoid excessive jargon. And if you must include complex terms, explain them in plain English.

3. Too Much Risk of Non-Payment. Seller financing is common in today’s market. But here’s the catch: Sellers need to believe they’ll actually get paid.

If your offer signals too much risk—minimal down payment, lack of guarantees, or unclear terms—they’ll see it as a gamble. And sellers don’t gamble with their retirement.

How to fix it: Make them feel secure. Offer personal guarantees. Be clear about repayment terms. And show them you’re financially capable of honoring the deal.

4. Too Much Hassle After Closing. Most sellers are looking for a clean exit. They’re ready to retire, travel, or start their next chapter.

If your LOI hints at long-term commitments, excessive handholding, or ongoing responsibilities, you’re creating friction.

How to fix it: Respect their need to move on. Avoid overly burdensome post-closing requirements. And if you need their involvement after the sale, make it easy, clear, and time-limited.

The Bottom Line: Price gets the attention, but it’s not what seals the deal (or what usually causes a flat out LOI rejection). Sellers care about trust, simplicity, and a smooth transition.

So, before you send your next LOI, ask yourself:

Am I likable? Is this deal easy to understand? Does the seller feel secure? Have I minimized post-closing headaches? Get those four things right, and your chances of having your LOI accepted, and eventually actually closing, just went way up.

Hope this helps you with getting better traction with your LOIs.

Happy hunting!

Eric

M&A Lawyer,

Publisher, Freedom Through Acquisition Newsletter

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