The Seller's Power Shift: How to Defend Valuation After the LOI

The sell-side M&A process often shifts power from the seller to the buyer immediately following the signing of a letter of intent (LOI). Praveen Ghanta, founder and CEO of devhawk.ai, details his experience navigating a high-stakes exit where a critical enterprise contract delay triggered a mid-diligence valuation collapse. This scenario highlights the necessity of maintaining leverage by standing firm during negotiations and thoroughly preparing for the scrutiny of due diligence. Key lessons include the importance of defining specific financial terms like ARR in the LOI, the risks of in-sourcing legal and accounting tasks without adequate preparation, and the challenges of cultural and operational integration post-close. Ultimately, successful exits require balancing strategic fit with disciplined negotiation to protect valuation against aggressive repricing tactics often employed by buyers during the exclusivity period.