As we enter 2026, the M&A market is seeing a wave of “re-entry” from founders who paused their exit plans during the high-interest-rate volatility of 2023-2024. If you are among them, I challenge you to prioritize a longer-term, sustainable partnership that preserves your own legacy over the highest offer.
And that could mean saying no.
Asking the hard questions and being prepared to say no allows you to identify red flags before they become deal-breakers—or worse–regrets you live with for years.
Make sure you are asking these questions in the process:
1. I’d like to speak with other founders you have worked with. Can you share their contact information?
If they are reluctant to provide references to other founders they’ve worked with, or if the references they provide are carefully curated and scripted, be very suspicious.
- Talk to founders whose company is still owned by the buyer you’re considering. They’ll give you the diplomatic version, but read between the lines. What are they excited about? What do they carefully avoid mentioning?
- Talk to those who have sold but are no longer owned by this buyer. This is where you get the gold. They’re free to share the good, the bad, and the ugly. They have no reason to sugarcoat it.
The buyer’s behavior post-close tells you everything you need to know. How did they treat the founder during the transition? Did they honor their commitments? How did they handle disagreements? Did they invest in growth or just extract value?
2. What’s your leverage strategy?
If they’re planning to leverage your business to the point where one bad quarter puts everything at risk, that’s a problem. High leverage means they’re extracting maximum value with minimum skin in the game. It also means less flexibility for growth investments and more pressure for short-term cash generation.
- Ask, “How does that strategy compare to your typical deal?”
If they’re evasive or dismissive, that’s your answer.
3. What rollover percentage will you offer me?
If a buyer doesn’t want you to roll over equity, ask yourself why. They likely believe in the upside, but they don’t want you to benefit from it. This was a red flag from the buyer that I walked away from—they tried to reduce the rollover percentage we had agreed to. They had a great deal, and they were greedy enough to want more of it.
4. Can I have a board seat?
The PE firm will control the board—that’s reality. But you should at least fight for a Board of Directors position and a vote. You want your voice heard and to be in the room where decisions are made.
If they refuse to give you a board seat when you’re rolling over significant equity and staying involved in the business, what does that tell you about how they value your input post-close?
5. What veto rights will I have?
Focus your negotiating energy on the areas that matter most. For me, and for most founders, these are the critical three: leverage (how much debt they put on the business), acquisitions (major strategic purchases), and divestitures (selling off parts of the business).
If they won’t give you veto rights on any major strategic decisions—especially these three—they’re telling you they don’t want your input when it matters most.
6. Do you want to learn about what makes this team special and sets my company apart?
If the buyer you are considering doesn’t ask about your team, your culture, or what makes your business special beyond the financials—that’s a red flag. If every conversation is about what they’ll change rather than what they’ll preserve and build on—that’s a red flag.
I needed a partner who aligned with my core values and the business culture. The brand had to be able to continue in my full-time absence. If they don’t understand or respect what you’ve built culturally, the financials won’t matter.
If any of these questions raise a red flag, you need to decide if it’s time to say no and walk away.
Here is the exact language for saying no to bad deal terms:
- “We need veto rights on leverage decisions. That’s non-negotiable for us given the rollover percentage.”
- “We’re not comfortable with this timeline. We need [X weeks] to complete proper due diligence on your firm and talk to your references.”
- “The rollover percentage doesn’t align with the ongoing role you’re asking me to play. We need to revisit this.”
For behavioral red flags:
- “I need to be clear: going around me to my team without my knowledge isn’t how we’re going to operate. If that’s how you approach partnership, we’re not aligned.”
The nuclear option:
- “After careful consideration, this partnership isn’t the right fit for us. I appreciate the time you’ve invested in this process.”
You don’t owe them more explanation than that.
Fight for meaningful rollover equity, a board seat and vote, veto rights on the big three: leverage, acquisitions, divestitures and respect for you and your team.
And if they won’t give you these things? Walk away.
The wrong partner will make your life miserable and destroy the value you’ve spent years building.
Your job isn’t just to get a deal done. Your job is to get the right deal done.
And sometimes the most powerful thing you can say is: “No, not like this. Not with you.”
Trust me—the right partner will respect that boundary. The wrong one will confirm why you needed it in the first place.
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