The Real Reason Buyers Raise Their Bids

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

• Why a formal competitive process unlocks more value

• How to think about buyer investment in a deal

• 3 actions for this week to map out your buyer strategy 

Let’s dive in.

💡 This Week’s Big Idea

The Real Reason Buyers Raise Their Bids

When the time comes to sell your business, most founders fixate on the price of the deal.

But in an M&A process, the price always follows the process. It’s about creating a competitive environment where buyers are forced to invest time, money, and effort at every stage. Because the more they invest, the harder it is for them to walk away, and the more they want to win.

Here’s a simple process you can follow to get buyers to increase their bid:

1. Start wide: Cast a broad net with initial indications of interest, and get as many indications of interest as you can. Don’t be afraid of volume early here. You’re gathering data and building competition.

2. Tighten quickly: Once you've determined who the serious buyers actually are, only they get access to management. 

3. Escalate commitment: To keep advancing, each buyer must increase their bid and engage legal and financial advisors if they want to stay in the race.

4. Add friction on purpose: The more work buyers do, the more value they assign, and the less likely they are to back out. 

Don't just stop at price, either.

In later rounds, you can even ask for markups of the purchase agreement alongside final bids. Because every term matters, not just the number. 

The reality is, when a process is designed this way, buyers stay engaged, bids rise incrementally, and you end up with multiple strong offers, not just one.

That’s how everyone walks away from a deal happy with the outcome.

❓ 5 Key Questions to Ask Yourself This Week

1️⃣ When was the last time I reviewed how my current sale process strategy builds buyer investment and effort?

2️⃣ Do my potential buyers have to work for increasing bids, or am I giving them a pass on effort early?

3️⃣ Is my current process opening the door to incremental bidding, or am I encouraging positional bargaining?

4️⃣ How many real, vetted buyers are in my acquisition universe right now, and do I know where to find them?

5️⃣ Where in the process am I unintentionally sending signals that reduce competition?

📋 3 Action Items for This Week

☑️ Map your acquisition universe and segment buyers by fit and firepower: Don’t just list names. Categorize them based on strategic value, ability to pay, and likelihood of investing effort. 

☑️ Outline your bidding rounds and signal structure: Decide in advance when you'll ask for revised bids, what information triggers escalation, and what qualifies someone for management meetings. 

☑️ Plan how and when you'll introduce drafts of legal documents: Price isn’t the only bid. Terms matter too. So start deciding when the purchase agreement feedback becomes part of the process.

That’s all for this week. Remember that a great exit isn’t measured by whether someone shows interest. It’s measured by how deeply buyers actually commit to what you've built.

If you want help thinking through your process design or buyer strategy, reply to this email or contact us here. We're always happy to walk you through your options.

Talk next week,

Brian Dukes
Managing Partner at Exitwise