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The Psychology of Exits

by Basil Peters on September 12, 2012 · 4 comments

When a saleable company fails to sell, it’s often the seller’s psychology that kills the transaction. Most of the time, the seller doesn’t even know that they were the reason their company failed to sell. This talk describes the seller psychologies that can kill exits.

The Psychology of Exits
Presented at the Alliance of Merger and Acquisition Advisors Summer Conference
July 10, 2012 in Chicago

Highlights:

  • What percentage of M&A transactions close after an M&A Advisor has been engaged?
  • According to a speaker from a large multi-national M&A Advisory firm, only 8% end up closing
  • Why do ‘saleable’ businesses fail to sell?
  • Is the fault most often with the Buyers? Or the Sellers? Or the M&A Advisors?
  • Two reasons the Sellers are the most likely cause of an M&A failure:
    1. The business becomes un-saleable
    2. The Seller’s psychology – including some of these common psychological pitfalls:
  • Unrealistic value expectations
  • “It Feels Like I am Selling my Child”
  • “My Business is Me”
  • “I am Still Having Fun”
  • Fear and Greed
  • “I am the Smartest Guy in the Room”
  • Approach Avoidance
  • Cloaked Decision Makers

This is the Powerpoint for The Psychology of Exits.

The Psychology of Exits – AM&AA Summer Conference 2012 from AM&AA on Vimeo.

{ 4 comments… read them below or add one }

Merger and Acquisition Advisors October 3, 2012 at 4:10 am

Thank you for sharing this very informative blog with us.

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Basil Peters November 5, 2012 at 1:37 pm

Glad you found it informative.

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Paul Cronin March 13, 2013 at 6:12 am

Great presentation! To help business owners, at Successful Transition Planning Institute, we suggest that advisors focus on helping the owners to focus on what they are really trying to accomplish. Each person has to recognize that they WILL leave their business someday. They have two choices: prepare for it on their terms, or let others plan it for them. If you help a person define a future they can’t wait to start living, they will listen to advice about transitioning themselves out of their business. Jack Beauregard speaks at length about this in his book, “Finding Your New Owner: For Your Business, For Your Life”.

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Mel November 20, 2013 at 3:56 am

Superb video Basil.
I would love to welcome you to our offices, on your next London visit and have a exploratory discussion.
Thank you.
Best wishes,
mel

Melwin Mehta * 41, Cheval Place, London, SW7 1EW * +44 20 75812782

El Oro is a family office based in London, with roots going back to 1886 (same year that Dr Pemberton invented Coca-Cola)
Our pursuit is to invest in businesses run by good teams. If of interest, there is more on http://www.eloro.com

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