Valuation
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What Happens to a Seller's Leverage After the LOI | Praveen Ghanta on M&A Science
Praveen Ghanta explains why sellers lose leverage the moment they sign an LOI, and what to lock down before a buyer can reprice the deal.
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Praveen Ghanta, Founder and CEO of DevHawk

Getting the LOI can feel like the hard part is over. For sellers, it may actually mark the point when their leverage starts disappearing. 

Praveen Ghanta experienced that shift firsthand when a key $2 million enterprise contract was delayed during diligence, undermining the $10 million ARR story behind his company's valuation. Twenty-four hours before the diligence period expired, the buyer came back with an attempted reprice that cut the deal nearly in half. Walking away was possible. So was accepting the haircut. Instead, the founders had to determine what the business was actually worth to them, where they were willing to compromise, and where they weren't.

What You'll Learn

  • Why leverage changes once exclusivity kicks in
  • What to nail down before signing an LOI
  • How to respond when diligence changes the valuation conversation
  • What buyers should understand about the company they're inheriting
  • What Praveen would undo about how integration handled the technical roadmap
  • How integration disrupted the sales model that made the business work

When diligence changes the deal, the hardest question is knowing what to defend and what to give up. DealPilot, powered by M&A Science, has the deal frameworks and negotiation playbooks practitioners have used to make that call themselves.

Praveen Ghanta

Praveen Ghanta is a five-time founder and CEO of DevHawk. Ghanta previously founded HiddenLevers, a wealth management risk analytics platform he bootstrapped to more than $8 million in ARR before selling to Orion Advisor Solutions in 2021. Earlier in his career, he founded SmartWorkGroups, which was acquired by Intralinks, and worked on Wall Street after graduating from MIT.

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