The Challenge
Our client was a bootstrapped, profitable Austin-based developer-tools SaaS with a small engineering team, a global customer base across mid-market and enterprise accounts, and no prior outside counsel on M&A matters. They had grown through product velocity, not corporate process. The first LOI they received came from a public strategic acquirer represented by AmLaw 50 counsel and demanded a 30-day exclusivity, a structure heavy on rollover equity, and a representation-and-warranty package that would have left the founder personally on the hook for years after close.
The founder's instinct was to slow down and bring in a banker. We argued the opposite: with the right counsel and a tightly run process, the founder could move faster than the buyer expected, generate competitive tension with a second strategic, and renegotiate the structural terms before signing exclusivity. The clock started on a Friday.
Our Approach
We ran the engagement in three parallel workstreams from day one.
Workstream one — LOI renegotiation. We rewrote the exclusivity to a 21-day window with no extension. We restructured the consideration mix to shift several million dollars from rollover equity into cash at close. We pushed the representation-and-warranty survival period down materially and introduced an R&W insurance backstop in lieu of an outsized indemnity escrow. The buyer accepted a marked-up LOI within nine days.
Workstream two — diligence readiness. Most of the friction in a sell-side process is not the negotiation; it is the documentary cleanup. We assembled the data room while the LOI was still being negotiated: cap-table reconciliation, every prior SAFE and side letter, IP assignments going back to formation, open-source compliance review, key customer contracts pulled and flagged for change-of-control issues, and a security and privacy package the buyer's CISO actually accepted on first review.
Workstream three — definitive agreement negotiation. Once exclusivity began, we negotiated the purchase agreement on a compressed timeline — fundamental reps survival, knowledge qualifiers narrowed to specific named individuals, a tight materiality scrape on the bring-down, and a transition services agreement that bounded the founder's post-close obligations to a defined scope and a specific termination date.
The Outcome
The transaction signed and closed eleven weeks after the original LOI landed. Final terms:
- $42M total transaction value, structured 88% cash at close and 12% rollover.
- 21 days of exclusivity, with no extension request from the buyer.
- 18-month R&W survival for general representations, with R&W insurance as the primary recovery source above a tight retention.
- Zero post-close indemnification claims filed in the eighteen months following close.
- Founder employment commitment bounded to a 12-month transition with defined deliverables, not an open-ended earnout.
Lessons for Similar Businesses
The single most consequential decision in any sell-side process happens before the LOI is signed. Buyers route the most aggressive language they think a founder will accept, and the structural terms — exclusivity, indemnity, rep survival, escrow, R&W mechanics — are vastly harder to renegotiate once you are inside an exclusivity period than they are in the days leading up to it.
The second lesson is that a clean data room is leverage. Buyers price uncertainty into their offers, and they widen the indemnity package when diligence surfaces unknowns. The hours we spent reconciling a six-year-old SAFE side letter and re-papering two contractor IP assignments returned themselves many times over in the final negotiation.
The third lesson is about process velocity. Strategic buyers run dozens of deals a year and have a default cadence they expect targets to follow. A target that can move faster than that cadence — because counsel has built the diligence readiness and the negotiation playbook in advance — preserves optionality, generates competitive tension, and tends to capture economics that a slower process would have left on the table.
"We thought we needed a banker. What we actually needed was counsel who could move at the speed of the deal and tell us, in plain language, which fights were worth having. Eleven weeks later we were closed, paid, and still talking to the buyer."
— CEO, Austin SaaS Company
