Ep 501 Mastering the Deal: Andres Lares on Avoiding the Rookie Mistakes That Kill M&A Outcomes

·1 hr 2 min·5 clips

Andreas Lares explains how buyers use early conversations to slash your company's valuation without you knowing.

This episode of Built to Sell Radio features negotiation expert Andres Lares, Managing Director of the Shapiro Negotiation Institute and author of "Persuade." Host John Warrillow interviews Lares to help business owners avoid critical mistakes during the sale of their company. Lares has coached complex deals for clients like Boeing and PwC, as well as sports contracts for teams including the San Antonio Spurs and Cleveland Browns. Lares explains that negotiations often begin informally, like when an owner networks more actively at industry events, long before formal talks start. He emphasizes the importance of preparing a business for sale years in advance, potentially using advisors to identify value gaps, similar to the Value Builder Score system Warrillow mentions. A key tactic is consciously framing your company within an industry that commands higher multiples, such as presenting a service-heavy business as a software company. Lares advises creating a comprehensive list of all potential acquirers, from competitors to private equity firms, to build psychological leverage and avoid feeling dependent on a single buyer. The discussion warns against accepting "proprietary deals" or letters of intent with no-shop clauses too early, as they eliminate competitive tension. Lares recommends probing such offers by asking direct questions about the buyer's motivations and using analogies, like comparing the process to buying a house without seeing other options. A surprising insight is that the most likely acquirer is often not the obvious candidate, illustrated by a Canadian company that expected to sell to banks but was ultimately bought by an insurance company. Lares stresses that even with a skilled M&A advisor, the owner must remain deeply involved because no one cares about the outcome as much as they do. He draws a parallel to athlete negotiations, noting that intermediaries help manage emotions and provide strategic separation, which is crucial during a lengthy, roller-coaster process. To combat emotional decision-making, Lares suggests owners privately write down their ideal price, acceptable price, and walk-away number before negotiations begin. He outlines a decision-tree response strategy for handling initial offers, where a bid significantly below your walk-away should prompt a polite but firm pause in discussions. The tone is educational and conversational, blending structured advice with real-world anecdotes and analogies. Warrillow and Lares engage in a practical dialogue, focusing on actionable strategies rather than abstract theory. Business owners actively planning or considering a sale within the next few years will find this episode immensely valuable for its tactical preparation and negotiation frameworks. Listeners who are not business owners or are in the very early stages of company building might find the content too specialized and prematurely focused on exit planning.

As heard by us

A clear, tactical look at leverage, pressure, and negotiation in a company sale.

Built to Sell Radio keeps its eye on the point where a sale turns into negotiation, and that is where the episode has the most weight. Andreas Laras stays practical, with the sports-contract comparison giving the discussion a little more bite.

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Need to protect leverage before the buyer thinks the deal has started?

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