Why M&A deals fail, and how to make sure yours doesn't

A question founders who have decided to sell ask us a lot: "What could go wrong?" Or: "How can I maximise my chances of success?"

If we wrote down every little (or big) thing that can go wrong, the list would be endless. We have some wild stories we're always happy to share if we ever talk.

Why deals failMost failed deals come back to two things

Before the LOI

A weak start

The deal wasn't set up properly

After the LOI

A process that dragged on

Something changed along the way

Either they weren't set up properly at the start (before the LOI), or something unexpected happened while they dragged on. Our role is to help founders reduce those risks as much as possible, through preparation, alignment and execution.

Where things can go wrong, and why it matters

To make sense of the risks, it helps to think of your M&A journey in two phases:

• Before the LOI: you prepare the business for a sale, reach out to potential buyers (or get inbound interest), and negotiate one or several offers.
• After the LOI: once you've accepted an offer and signed a letter of intent, you enter an exclusivity period. The buyer runs detailed due diligence and, if all goes well, completes the acquisition.

Before the LOI

Building a strong foundation

After the LOI

Keeping the momentum

PrepareGo to marketOffersLOIDue diligenceFinal contractClosing

Exclusivity: only the buyer can walk away

Many founders assume that signing an LOI means the deal is basically done. Unfortunately, that's far from true, which is why the risks after the LOI are often underestimated. The LOI-to-close conversion is in the 25–30% range (though it's definitely higher with the right professional support).

Both phases carry their own risks. The good news is that many of the risks after the LOI can be reduced by managing the phase before it well. Here are the main ones, and how to manage them.

Unsurprisingly, a business that performs well and offers buyers a strong strategic opportunity has a better chance of attracting strong offers, and of a successful process.

But what "performing well" looks like to a founder can be very different from how buyers see it. Metrics or strengths that feel critical when running the business don't always translate into value in a sale, and what buyers prioritise can catch founders off guard. For example, many are surprised that revenue retention often matters more to buyers than growth rate.

We've seen many founders come to us ready to sell, only to discover areas that, if addressed a few months earlier, could have significantly improved their chances. Starting the process without this preparation often means leaving money on the table. That's why we like to start working with founders early, sometimes long before any formal process, to find areas for improvement before going to market.

Before the LOI: building a strong foundation

Beyond performance, success before the LOI usually comes down to three things: how well prepared you are (from materials to buyer selection), how well the process is run, and how aligned your shareholders are.

Failing to prepare is preparing to fail.

It's easy to underestimate how important it is to have your key data in order before starting a process, and especially before signing an LOI. That includes a clean P&L, proper tracking of key metrics (for example NRR and GRR), and other critical business data.

Going into a process with messy or incomplete data is a sure way to run into problems. Timelines drag, buyer trust erodes, and, most importantly, it often leads to unpleasant surprises after the LOI. In M&A, surprises are some of the worst things that can happen (more on that below).

During preparation, we work with founders to assemble all the key data buyers will want to see. We also help identify and assess any short-term risks to the business, so we can either reduce them or, at a minimum, frame them thoughtfully in early discussions with buyers.

A big part of execution before the LOI is how you manage discussions with buyers, so you're aligned on the key deal terms before signing an LOI and entering exclusivity.

It's not just about valuation. It's everything from deal structure, your role after the sale and earn-outs, to anything else that could become a sticking point later. Part of this work is also making sure all relevant information has been disclosed to, and acknowledged by, the buyer before the LOI. That limits the risk of them later presenting due diligence findings as new information to renegotiate the deal.

Done properly, this keeps surprises after the LOI to a minimum and helps the process run much more smoothly.

Before you even start preparing the business or reaching out to buyers, alignment on valuation and expectations is critical. Conflicting objectives among shareholders, or different views of what a good outcome looks like, can create months of frustration and wasted effort, even if the business is otherwise ready.

Getting everyone on the same page upfront sets the foundation for everything that follows: preparation, execution, and ultimately a smooth path to a successful sale.

After the LOI: keeping the momentum

The phase after the LOI is when deals are most vulnerable. The buyer has exclusivity, which gives them more leverage, while you're deeply invested in the process, which makes setbacks harder to handle, both strategically and emotionally. Due diligence is under way, timelines are tight, and unexpected issues can emerge, all of which can derail the deal if not managed carefully.

Once the LOI is signed, the focus shifts to closing. Moving fast and keeping momentum is critical: dragging timelines increase the risk of deal fatigue, shifting priorities, or issues nobody saw coming. More than anything else, time tends to be the greatest threat to closing.

This is why preparation matters so much. When materials are well organised and key terms were dealt with upfront, the phase after the LOI tends to run much more smoothly, with fewer last-minute surprises.

PreparedDue diligence confirms

• ✓Financials match what was shared
• ✓Contracts in place
• ✓Metrics checked

Closing

LOI signed

Closes on the terms agreed

UnpreparedDue diligence reopens

• ↻Documents requested again
• !New information surfaces
• ↓Terms adjusted

Closing?

LOI signed

Takes longer, and may not close

The phase after the LOI can feel like running your business while being constantly poked. Requests from the buyer come fast and furious (financials, customer data, operational details) while you're still responsible for keeping the business on track. It's easy to get pulled in a hundred directions.

Another common trap is founders mentally "checking out", thinking the deal is basically done. But you still need to run the business as if you'll be operating it for years to come: consistent performance is what protects value and keeps the deal on track.

Performance after the LOI matters just as much as before it, if not more. A slowdown in growth or unexpected churn can prompt the buyer to renegotiate, or even walk away. A trusted partner to manage and triage buyer requests makes a big difference, keeping the process organised and letting you stay focused on running the business.

Even with the best preparation, some risks are out of your control.

On the buyer's side, internal changes like a new CEO shifting strategy, poor results or trouble securing financing can derail a deal up to the last minute, even if you've done everything right. Remember: the LOI is non-binding, so a buyer doesn't need a formal reason to walk away. They can simply change their mind.

Unexpected events can also happen on your side: a key client going bankrupt, losing a major contract, or operational hiccups that hurt performance for a while. Do everything you can to anticipate and prevent these, but some things you just can't see coming.

The longer the phase after the LOI drags on, the higher the chance of one of these curve balls hitting. Speed, discipline and proactive execution go a long way to limiting their impact and keeping the deal moving.

Prepare early

The earlier you start, the more of these risks you can deal with before they matter. Performance issues can be fixed, data put in order and shareholders aligned while there's still time, rather than in the middle of a process.

If a sale is on your horizon, even a year or two out, that's the moment to start preparing.

Last updated October 2026 · Written by Aïda Aït-Ahmed, Co-Founder, Nextoria