Due Diligence and Closing.

Taking diligence personally.

Buyers question your numbers, your customers, your processes, your contracts, your decisions from three years ago. Each question feels like an audit of judgment. The instinct is to defend, the discipline is to answer. The buyer writing a check this size has to make sure they're not overpaying. That's their job. It will feel personal anyway. Founders who push back on reasonable requests, who treat the diligence team as adversaries, who carry the bruise into the next conversation, slow the deal and damage trust. Answer the question plainly. Let the advisor flag what's worth pushing on. Save your energy for the questions that actually matter.

Deal fatigue.

What's been the most important thing in your life for years becomes something you just want over. By month four, you'll sign things you would have fought at month one. The fatigue is real and it changes how you make decisions. The advisor and the attorney are there partly to hold the line you can't hold by then. Knowing it's coming is half the fight. The other half is sleep, the days off you can carve out, the calls you say no to, and the people you let see you tired. Grind through it alone and you concede more at the end.

The re-trade.

Late in the process, after months of diligence, the buyer comes back with new information and wants to revise the price. The gut response feels like a punch. The advisor is in your ear about whether it's reasonable or whether you're being tested. Buyers sometimes lower the number because something real surfaced. Sometimes they lower it because they think you're too far in to walk. Reading which one is happening takes a clear head you don't have by then. The work is to slow down. Talk it through with the advisor and the attorney. Decide based on the structure, not the sting.

Reps and warranties.

You read the actual purchase agreement and you see the reps and warranties section for the first time, and what you understand is that closing isn't the end. It's the start of a different obligation. You're personally on the hook for what you represented about the business, sometimes for years. There's insurance you can buy that takes the edge off, RWI, and there are caps and baskets and escrows your attorney will negotiate hard. None of that removes the reality that the deal extends past the wire. The founders who read the agreement carefully in Phase 5, instead of letting the attorney summarize it for them, are the ones who don't get blindsided later.

Working capital, the second war.

You set the working capital target in Phase 3 and you thought that was the war. The second war is the actual closing calculation. Their accountants and yours disagree on definitions. Decimal points become hundreds of thousands. The number you thought you were getting moves while you watch it. The advisor and the attorney will fight this with you, but the math is yours to understand, because the dollar-for-dollar exposure is yours. Read every assumption in the calculation. Question every classification on the schedule. The day before closing is not the day to discover the calculation is off.

The lawyers.

Your attorney wants every protection. Their attorney wants every protection. You're paying for both attorneys. Bills mount, and the deal starts to feel like it's slipping out of your hands and into a process you don't fully control. The temptation is to either let the lawyers run it or to insert yourself into every clause, and neither posture works well. The right posture is to stay informed on the material points, defer to the attorney on the language, and protect a clear list of non-negotiables that came out of your why and your walk-away number. Everything else is expertise you're paying for, and the time to use it is now.

The home strain.

You're exhausted, short-tempered, distracted. The spouse who was patient through the run-up and through Phase 4 starts asking when this ends, and there is no honest answer. The diligence calendar doesn't care about anniversaries or birthdays or the long-planned trip. The household keeps running because somebody is carrying the things you used to. The work is to acknowledge it out loud. Thank them, and apologize when you need to. Don't pretend it's almost over when you don't know that it is.

The near-death moment.

Almost every deal almost dies at some point in Phase 5. The buyer goes silent for a week. A finding surfaces in diligence that wasn't expected. A re-trade comes in too far. The advisor calls and the call doesn't start with a smile. The emotional whiplash of pulling it back together, or of letting it go, is the hardest stretch of the entire arc for some founders. The deals that survive a near-death moment usually close stronger, because both sides have shown what they're willing to do. The deals that don't survive teach you something about what you actually wanted. Either way, the moment is not a sign that you did something wrong.

What does Phase 5 of the founder exit cover?

Phase 5, Due Diligence and Closing, is the stretch between the LOI being signed and the wire hitting. It's sustained pressure with no relief, in contrast to Phase 4's silence broken by bursts. The data room opens and stays open, requests come daily, every answer raises new questions. The mechanics belong to the sell-side advisor and the M&A attorney. What's less talked about is the interior weather. Taking diligence personally, deal fatigue, the re-trade, reps and warranties exposure, the home strain, and the near-death moment that shows up in almost every deal.

How long does due diligence usually take?

Sixty to a hundred and twenty days, sometimes longer if the buyer is large or the deal is complex. The calendar matters less than the pace, which is buyer-driven and rarely predictable. You'll have weeks where the requests are heavy and weeks where they slow down. The slow weeks aren't relief. They're the buyer working through their internal process or waiting on third parties. The pressure doesn't really lift until signing.

What is a re-trade and how should I handle it?

A re-trade is the buyer coming back, late in the process, asking to revise the price based on something they found or claim to have found. It can be reasonable or it can be a test. Reading which one is happening takes a clear head you probably don't have by month four. The work is to slow down, talk it through with the advisor and the attorney, and decide based on the structure of the deal and your walk-away number, not the sting of the moment. Walking away from a re-trade is on the table, but it's rare.

What are reps and warranties and why do they matter?

Reps and warranties are the statements you make in the purchase agreement about the business, what's true about it, what you're guaranteeing as the seller, and they survive closing. You're personally on the hook for what you represented, sometimes for years, subject to caps and baskets and escrows. Representations and warranties insurance, RWI, can take the edge off. Read the agreement carefully yourself. Don't let the attorney summarize. The first time you understand that closing isn't the end is the moment the deal stops being theoretical.

What is deal fatigue and how do I manage it?

Deal fatigue is the wear that builds over months of negotiation, diligence, and review. What's been the most important thing in your life for years becomes something you just want over. By month four, you'll sign things you would have fought at month one. Knowing it's coming is half the fight. The other half is the team around you. Your attorney and advisor are partly there to hold the line you can't hold by then. Sleep, days off, and the people around you knowing you're tired aren't soft items in Phase 5.

Why does almost every deal nearly die in diligence?

Because the buyer is paying a lot of money and they have to be sure. Sustained scrutiny over months will surface things. Some of the findings are real. Others are negotiating positions. Some are misunderstandings between teams. The near-death moment is more common than it isn't, and it doesn't mean the deal is wrong. The deals that survive often close stronger, because both sides have shown what they're willing to do.