Two tracks, one toolkit
Preventative
Protection built into the LOI for risks visible from day one. It feels like prudent risk management.
Corrective
Terms retrofitted for issues found in diligence. It feels like a retrade if mishandled. Same levers; timing and framing differ.
Map risk to structure
This is the literal handoff from Module 3 findings into terms.
Concentration and retention
Earnout tied to retention, plus an extended transition.
EBITDA below expected
Reprice, or bridge with a seller note or an EBITDA earnout.
Messy working capital
A tighter peg, an escrow for the true-up, a maintenance covenant.
High owner dependency
Extended transition, a consulting agreement, equity rollover, key-employee retention.
Non-transferable tech
A holdback until transfer, with paid migration support.
Diagnose the seller, then pitch to it
Three first-call questions reveal which of five types you are dealing with.
The five types
Wealth Maximizer (price above all, takes earnout risk), Certainty Seeker (heavy cash, simple structure), Legacy Protector (people and reputation, wants a real role), Tax Optimizer (installment sale and rollover to defer), and Reluctant Seller (high fragility, keep it simple, move fast).
Same lever, different pitch
One seller note is "gets you to your number" for a Wealth Maximizer, "short term, fast close" for a Certainty Seeker, and a Section 453 installment deferral for a Tax Optimizer.
Five levers and five moves
The levers
Seller note (10 to 30 percent, 5 to 7 percent, 3 to 7 years, subordinated), earnout (single metric, cap and floor, defined control), equity rollover (same class, vesting), holdback or escrow (5 to 15 percent, 6 to 18 months), and a hybrid explained component by component.
The moves
The Two-Paths framework, anchoring back to the LOI math, a risk-sharing trade that tests real confidence, "what would make this work," and silence after the offer.
Valuation Multiples Database
Support your structure conversation with independent market comp data.
Alignment, not punishment
A finding becomes a term, and the term is pitched as how both sides share a risk fairly. Re-anchor every adjustment to the LOI math so a price change reads as logic, not a retrade.
This course is operational guidance, not investment, legal, tax, or financial advice. SilverShore Partners is not a registered broker-dealer or investment adviser; in qualifying private-company transactions we may operate within the federal M&A broker exemption under Section 15(b)(13) of the Securities Exchange Act. Confirm specifics with your own advisors.