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Why A Single Offer Is NOT A Good Thing

When selling a business, receiving a single offer from one buyer may initially seem appealing, but it can often be a trap. A single offer means limited negotiation power and no competition to drive up the price. Without multiple potential buyers, sellers are at a significant disadvantage, leaving money on the table. The solution? Bring in more buyers. While this approach may require more effort, it’s essential for achieving the best deal and maximizing the business’s value.

A competitive auction process is the key to getting the highest enterprise value. With multiple buyers competing, the seller can take advantage of bidding wars that drive up both the price and favorable deal terms. These competitive dynamics place the seller in a strong negotiating position, unlike a single offer situation where there’s little room for improvement. By attracting multiple buyers, the seller ensures they’re not leaving money on the table and improves their chances of securing the most advantageous deal structure.

Furthermore, a competitive auction offers the seller protection against deal risks such as re-trading, where a buyer attempts to renegotiate the terms before closing. With backup options available, the seller is less likely to be forced into accepting unfavorable conditions. Additionally, a competitive process allows the seller to choose the best buyer, not just the first one, ensuring a good fit both operationally and financially. This strategic approach maximizes the seller's return and secures a strong long-term partnership.

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*At founder M&A we employ a competitive auction environment for all of our deals and we've never put a price tag on a business.  Additionally, our goal is to be a resource for business owners. We'd love to connect to discuss our competitive auction process or perhaps a complementary valuation for your business in greater detail.

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David Broussard, CMAA

Partner

Founder M&A

817.881.1493