Is your ‘entrepreneur’s intuition’ secretly sabotaging your M&A deals?
No matter how open-minded we think we are, deal bias can blindside even the savviest entrepreneurs. Here’s why it matters – and how to outsmart it.
Deal bias is a silent killer in M&A. Here are but a few examples you might be familiar with:
• Overlooking perfect opportunities because they’re unfamiliar
• Excluding potential buyers based on preconceived notions
• Letting brand image unduly influence valuation
These biases are costly, leading to missed opportunities and expensive mistakes.
But they can be avoided. Here are three strategies I suggest to help clients side-step deal bias:
1. Make it personal: Take time to truly know the key players and teammates.
2. Embrace transparency: Share not just information, but give feedback openly and regularly with the other side.
3. Listen actively: Pay close attention to what the other side aims to accomplish.
Implement these strategies, and 9 times out of 10, you’ll avoid bias and uncover surprising insights.
In M&A, as in life, things aren’t always what they seem. Patience and open-mindedness reveal the best opportunities.
Looking to grow through transactions or planning an exit? We specialize in guiding owners as they buy, build, and exit their businesses.
