Don't Get Burned By a Bad Deal Structure

Welcome back to another edition of The Wise Exit newsletter. This week, we’re covering:

• Why your deal structure matters just as much as the sale price (if not more)

• 5 negotiation questions that will pressure-test your business priorities

• 3 steps to help you land a better outcome at the deal table

Let’s dive in.

💡 One Big Idea

Why a $5M Exit Can Feel Like a $2M Exit if the Deal is Structured Wrong

It's ironic how many founders and business owners love to talk about their valuation but miss something much bigger:

More often than not, the structure of your deal is far more important than the actual number itself.

For example, you could sell your business for $5M tomorrow.

But if $2M of that is tied to an earn-out, $1.5M is seller-financed, and taxes eat another big chunk?

You’re not walking away with $5M. You're walking away with far less.

That’s why the smartest founders don’t just negotiate their exit number. They negotiate the terms of the deal.

Founders and business owners often don't understand the important levers in a deal. Levers like:

• What’s upfront vs. deferred

• What happens if the earn-out falls short

• How much risk they carry after the close

• What protections they have if something goes sideways

The truth is, every term in your purchase agreement shapes how the deal actually feels once it’s done.

And if you haven’t mapped out your personal and financial goals in advance, it’s easy to say “yes” to a deal you’ll regret later down the line.

Your Action Items:

1. Get clear on what “success” really looks like in your exit: Do you want an all-cash offer? Tax efficiency? A quick close? Minimal post-sale involvement? Rank your non-negotiables and narrow them down from there.

2. Prepare your walk-away points now, not while you're in the room: Know the terms you can flex on and the ones you can’t. This will make you more confident and more persuasive in the deal room.

3. Loop in your legal and financial team early on: Your lawyer isn’t just there to draft the paperwork. They’re your partner in protecting your downside.

Preparing for an exit and want help thinking through your deal structure options? Reply to this email, and I'll send over a few example term sheets that might help.

❓ 5 Key Questions to Ask Yourself Today

Before you even think about an exit or talk to a buyer, there are several important questions you should be asking yourself.

The five questions below are anything but easy to answer. In fact, they'll challenge you to think about things you may never have before. But they could be the difference between a clean and confident exit, or one you wish you could take back:

1️⃣ If you received your “target number,” but 50% of it was tied to an earn-out, would you still take the deal?

This reveals whether you’re just chasing a headline or a real outcome.

2️⃣ What would make a deal feel like a failure, even if the valuation was high?

Maybe it's a misaligned culture, a long earn-out, or zero upside. Whatever it is, know your hidden non-starters.

3️⃣ How much post-sale involvement are you truly willing to commit to, both emotionally and logistically?

A 12-month earn-out can feel like a second job if you’re not aligned on expectations.

4️⃣ Have you reviewed tax implications and payout timing with your CPA?

The wrong deal structure can cost you 6–7 figures in taxes alone.

5️⃣ What protections do you have in place if something goes wrong post-transaction?

Think indemnities, reps and warranties, or clawbacks. Don’t overlook these.

📋 3 Action Items For This Week

☑️ List your top 3 deal priorities and 3 walk-away terms: Be honest with yourself now so you’re not negotiating emotionally later.

☑️ Ask your advisor or lawyer to review 1–2 sample term sheets: Understand how different deal structures impact your risk, taxes, and timeline.

☑️ Review your “life after exit” plan: Make sure your deal structure supports what’s next for you, not just what looks good on paper.

That’s all for this week.

Remember that in every negotiation, the best outcome isn’t just the highest number. It’s the one that lets you walk away feeling confident, protected, and proud of the deal you signed.

Until next time,

Brian Dukes

Managing Partner at Exitwise