Buy-Side vs Sell-Side M&A Cage Match

Ramzi Daklouche

Alright, Claudia, cage match time. Let’s start with the big one: valuation. Why do buyers think sellers are, frankly, a bit off their rockers when it comes to price?

Claudia Luquerna

Because, Ramzi, every seller is convinced their business is special. That future potential, the blood, sweat, all the things we talked about back in our Q4 valuation episode? To them, it’s priceless.

Ramzi Daklouche

Yeah, but let’s be real—the buyer has to look at risk, not just potential. When we see a price based on sweat equity, sure, there’s pride in that work—but I can’t underwrite pride, you know? If the numbers don’t add up and I’m staring at a list of “add-backs” that reads longer than War and Peace, what do you expect?

Claudia Luquerna

But see, that’s just it. Sellers aren’t crazy, they’re just, well, human. I had this Georgia business owner—pet care company—who genuinely thought all those midnight vet visits, her connections with clients, they bumped her price way up. For the buyer, it looked nuts. But selling a lifetime of midnight calls for a formula? That’s tough.

Ramzi Daklouche

Right, but sweat equity and relationships don’t always translate to value once the seller walks. Buyers get stuck with risk: what if the relationships aren’t as sticky as the seller believes? If I overpay, my downside is real—cash flow, key employees, all that. Sellers love to say “oh, but you’ll see, it runs itself.”

Claudia Luquerna

And sellers always say, “But you’re just scared.” Look, I get it—buyers want a discount for every risk, but sometimes it’s just negotiation. There’s emotion, and there’s, you know, letting go of an identity after years. It’s messy.

Ramzi Daklouche

It is. That’s why valuation tugs both ways—buyers anchor on risk, sellers on legacy. Nobody’s right, nobody’s wrong, but someone’s gotta blink first. I’m just saying it shouldn’t always be the buyer!

Claudia Luquerna

Oh, you dream of bargains, Ramzi. But hey, if both sides stay flexible—maybe we meet halfway. Even if it’s after a little drama.

Claudia Luquerna

Speaking of drama—let’s talk due diligence. This is the phase where sellers start questioning, “Did I really sign up for this?” Buyers roll in with a microscope, right?

Ramzi Daklouche

Yeah, but for good reason! I mean, we’re about to sink seven or eight figures into a business. If there are cracks in the foundation, I want to know before closing, not after. Look, I once had a $12 million manufacturing deal in Atlanta nearly go down in flames over a tiny, I mean tiny, contract discrepancy in the customer list. One clause, wrong renewal date, and suddenly—big red flag for our bank.

Claudia Luquerna

It’s exhausting for sellers though, Ramzi. They get these lists—like, “show me every signed order from the last decade, and oh, explain that spike in office supplies during Q2.” Sometimes the documentation just isn’t there, or it’s buried in a box three owners ago. It starts to feel more like an audit than a negotiation.

Ramzi Daklouche

Well, yeah, but as we discussed when buying remote businesses, if things aren’t documented, how do I trust what I’m seeing? Surprises kill deals. Even what looks like a minor omission can be the tip of the iceberg, especially if there’s owner dependence or, you know, obscure tech holding things together.

Claudia Luquerna

You want everything tied up in a bow, but not every seller’s got perfect files, Ramzi. And every new diligence request feels like a test. Some deals die from sheer exhaustion—the seller’s burnt out before closing. It’s a balance, isn’t it? How deep is too deep?

Ramzi Daklouche

I’ll admit, sometimes diligence gets over the top. But if we find out later that a “locked-in customer” hasn’t signed a contract since 2019, well, whose side should I be on? Diligence might feel invasive, but it’s protection for the buyer, making sure they’re not stepping into a mess. And honestly, it’s what keeps deals alive in Georgia and beyond.

Claudia Luquerna

So, sellers—get your ducks in a row before you list. Buyers, don’t wear out your future partners. Otherwise, all that good will you built in the valuation stage just, well, evaporates.

Ramzi Daklouche

Alright, last round—earnouts and deal structure. Claudia, you know I’m a fan. Earnouts make sense; they bridge gaps in valuation. Seller says, “this business will soar.” Buyer says, “prove it.” Tie payout to results—problem solved, right?

Claudia Luquerna

Oh, you make it sound dreamy, Ramzi. But earnouts? For sellers, they’re emotionally draining. You hand over control, but your future payday depends on what the buyer does next. I’ve seen deals where buyers change strategy, shift resources, maybe even mess up on purpose—then, oops, targets missed, earnout vanishes. That’s not risk-sharing, that’s a recipe for resentment.

Ramzi Daklouche

Wait, hold on—it’s not always like that. Look, sometimes earnouts are mis-structured, I’ll admit. But if there’s real uncertainty, what else are we supposed to do? Pay the whole price up front and hope the numbers hold up? We need something to align interests, especially if a lot of value is in the future.

Claudia Luquerna

Yeah, but the alignment only works if both sides play fair. I’ve seen tech deals in Atlanta where the earnout hinges on “growth”—buyer takes over, changes product direction, and the targets become unreachable. The seller gets nothing extra, even though they did all the heavy lifting pre-close. It affects people, not just numbers.

Ramzi Daklouche

That’s a fair callout. Deal structure is more art than science at times. Maybe the best deals are crafted when both sides walk through the what-ifs together—scenario planning, clear metrics, mutual trust. It’s not about winning the negotiation, it’s about making sure the story continues after closing, and that folks still talk at the next Georgia dealmakers brunch.

Claudia Luquerna

That’s the hope, right? Sellers get paid and move on—not spend years chasing an earnout payout that depends on someone else’s decisions. Buyers get their value, but everyone’s legacy gets protected. We argue about terms, but at the end of the day, it’s about people’s livelihoods.

Ramzi Daklouche

Couldn’t agree more, Claudia. If there’s one lesson we keep repeating—it’s that great deals happen when everyone leaves the table with a handshake and, uh, maybe reunites for a podcast episode to tell the story.

Claudia Luquerna

That’s it. For listeners in the thick of M&A, remember: structure isn’t just about money. It’s about relationships, legacies, and sleep. Or, you know, lack of it. Ramzi, as always, thanks for keeping it real—and occasionally spicy!

Ramzi Daklouche

Always, Claudia. And for everyone listening, hit subscribe for more behind-the-scenes on deals in Georgia—and beyond. Until next time, keep those negotiations friendly, and your due diligence even friendlier. See you, Claudia.

Claudia Luquerna

See you, Ramzi. Thanks, everyone—and don’t let those earnouts steal your peace of mind. Catch ya next time!