You Signed the Deal. So Where’s the Money?

Many founders assume that signing an acquisition agreement means immediate payment. However, in many transactions, an interim period exists between executing the contract and receiving funds—a gap driven by required regulatory approvals, private equity capital calls, or third-party consents. During this window, the deal remains vulnerable to falling apart while the seller operates under strict operational constraints.
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Key Protections for Sellers:

• Narrow Buyer Outs: Limit the buyer's ability to walk away, ensuring risks like failed financing fall on the buyer rather than the seller.
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• Maintain Operational Control: Keep "ordinary course" covenants realistic so standard daily business decisions don't require constant buyer approval.
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• Set an Outside Date: Enforce a hard drop-dead date to prevent the company from being trapped in limbo indefinitely if closing stalls.
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• Secure Reverse Breakup Fees: Require financial compensation if the buyer fails to close due to issues on their end.
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• Tighten Closing Conditions: Keep the list of covenants and closing requirements as minimal as possible to avoid giving the buyer easy exit routes.
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• Include Specific Performance: Retain legal remedies that force the buyer to complete the purchase rather than merely suing for damages.

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