What sellers often miss
Many business owners spend months negotiating valuation and very little time understanding post-closing exposure. Because escrows and indemnification provisions often appear near the end of the process, sellers sometimes treat them as legal details rather than financial terms. In reality, these provisions directly affect how much of the purchase price is truly secure.
The takeaway
Evaluate every transaction based on the proceeds you are likely to keep, not simply the proceeds you are promised. Work closely with your legal and transaction advisors to understand escrows, indemnification caps, baskets, survival periods, and other post-closing obligations. The best deals are not merely those with the highest purchase prices. They are the ones that deliver the greatest certainty of outcome.
Illustrative, not your deal. Where the book uses dollar figures, they are there to show how something works, not to describe your business. Your banker, your accountant, and your attorney will put real numbers to your own situation. Full note.
Terms this chapter uses
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