When negotiating for an acquisition, we always recommend you, as the buyer, try to match the seller’s negotiation team. Many owners are selling their company for the first time and in most cases their company will be smaller than yours. Arriving to the negotiation table with a swarm of lawyers can be overwhelming and may immediately put the seller on the defensive, especially when they are unfamiliar with the acquisition process.
Matching humans from the buyer’s and seller’s teams helps put everyone at ease, but it’s not always easy to do. You may not know who is on the seller’s team and even if you do, you may not be sure of what their roles are and determining the best counterpart at your organization can be complicated, especially if your companies use different titles. To help you get past these hurdles, here are a few tips we’ve used with clients to help match their team to the seller’s:
1. Do your homework ahead of time
Before any discussions on in-person meetings with the prospect, take some time to research the other side. Send out agendas ahead of time so you can see who will be participating in the meetings. If you can, do some sleuthing on your own to find more information on the company’s website, through LinkedIn, or just a quick Google search. You may not be perfectly matched on the first conference call, but it’s a good start. At least if you see there are three people attending the meeting you won’t bring 10 folks from your team.
2. Ask questions
Throughout your conversations with the prospect, don’t be afraid to ask questions to gain better insight. Find out who is reviewing certain documents that are being shared and talk about decision-making and who is involved on their negotiation team. For example, if their VP is reviewing all the projected cash flow statements they may be fulfilling the role of CFO at your company.
3. Adjust as needed
After meeting with the prospect for the first time, you’ll find you have a better understanding of their organization and of their team members. Don’t be afraid to make adjustments as you learn more.
While it’s not always possible to match buyer and seller negotiation teams, it is a helpful technique that can make for smoother negotiations. Follow these three tips to make sure you bring the right team to the negotiation table.