How a Searcher Beat 13 Other Offers to Win a Deal (Not Highest Price)

This Week in ETA:

Most investors can’t spare time for pre-LOI searchers (and we get it, it takes a lot of time!) but we want to support you in each step of your journey.

Our Chief of Staff, Peter Vaselkiv, is setting aside time specifically for these conversations. It’s 30 minutes, completely free, and there’s no agenda beyond getting to know you and being genuinely helpful. If you’re actively searching and we haven’t connected with you yet, grab time with Peter here.

Partner Perspective:

Introducing Baton 

This week, I'm excited to introduce Chat Joglekar and Dylan Gans, co-founders of Baton - a modern deal platform built to make the business buying process faster, cleaner, and more transparent.

The origin story is worth sharing. Dylan's grandfather spent 40 years building a thriving surgical practice - loyal patients, great staff, a real legacy. But when it came time to sell, he didn't have the tools to value the business or find the right buyer. So he simply shut it down. That's the problem Baton was built to solve, and while our community is mostly buyers, it's worth knowing that Baton works just as hard on the seller side, helping business owners get fair valuations and find the right buyer for what they've built.

As a searcher/buyer, I've used the platform personally and can attest to how refreshingly straightforward it is. The premise is simple: one NDA unlocks all of Baton's deal flow, which is made up of listings exclusive to Baton. You share your criteria and background, get immediate access to their full listing inventory, and from there the process is built to keep you moving - standardized data rooms, verified financials, clear next steps, and direct lines of communication with owners. 

What stands out is the structure. Instead of chasing down documents and waiting weeks for responses, Baton gives you everything you need to go from initial diligence to closing in 30 to 60 days — with the support of a full-service team covering analysis, loan approvals, diligence, and closing, without the fees you'd expect for that level of hand-holding.

For searchers who are tired of deals going dark or getting lost in process, Baton is worth a serious look. I'm thrilled that they will share their insights and expertise with our TWIETA community each month. 

Chat Joglekar, Baton: The Highest Offer Doesn’t Always Win

As a buyer, it pays to understand what the other side of the table is actually thinking. 

One thing most first-time buyers don't realize: your offer is more than a number. It's something I spoke about recently to the MBA executive program at Columbia Business School, and a deal we negotiated not long ago illustrates it well.

A 30-year-old digital creative agency in New York listed on Baton. They received 14 offers. We worked with the sellers to narrow the field to six. Here's what those offers looked like:

• Buyer 1: $6.0M total consideration. $500K cash at close, $3.7M in deferred payments, $1.2M in salary across the transition, plus healthcare and 5% equity. Strong ongoing economics, but heavily back-loaded.

• Buyer 2: $6.85M total consideration. The highest headline price. $4.9M cash at close, minimal deferred consideration, but no salary, no benefits, no equity offered to either owner.

• Buyer 3: $5.5M total consideration. $3.4M cash at close, moderate deferred payments, salary offered to both owners, but key terms still to be determined.

• Buyer 4: $6.25M total consideration. $2.8M cash at close, $1.9M deferred, healthcare offered, but equity and salary terms left open.

• Buyer 5: $6.0M total consideration. $3.6M cash at close, but the lowest total cash flows to the owners of any offer ($4.9M combined) and significant terms still unresolved.

• Buyer 6: $6.14M total consideration. $3.9M cash at close, clean deferred structure, salary offered, but no equity or benefits.

So which one do you think won?

By the time the field was down to three finalists, the financial differences were real but no longer decisive. What tipped it was something harder to put in a spreadsheet.

The sellers had spent 30 years building something in New York City. They cared deeply about what happened to it next. The buyer they ultimately chose was local: New York City-based, embedded in the same industry relationships and creative community the sellers had spent three decades cultivating. 

The buyer was also coming in as an owner-operator. Several other offers, including some at higher prices, assumed a management layer that didn't yet exist, effectively asking the sellers to solve the succession problem before handing over the keys. For people who had been the operators themselves, handing off to someone who would genuinely step into the role rather than delegate it was a meaningful distinction.

The offer that's pulled ahead comes from Buyer #1. Not the highest on the table.

This aligns with something we've come to believe pretty firmly at Baton: passive ownership, for most small businesses, is largely a myth. A lot of what drives the current wave of first-time buyers, the corporate exodus, the search fund content, the "buy a business and get your time back" narrative, undersells how present you actually need to be. Especially in a service business built on relationships, a big part of the role is being boots on the ground.

If you're looking to take on the legacy of a small business owner, go in with open eyes. Running remote is harder than it looks from the outside. The sellers in this deal knew that, and they chose accordingly.

As for the other buyers in this deal, they didn't walk away empty-handed. On Baton, one NDA gets you access to every active listing on the platform, so you can keep searching without the paperwork slowing you down. See what's available at baton.com.

Plus:

• We aggregated data on the last 200 deals we’ve seen, and the results back up what Chat writes about above: in this industry, it’s not always the most “market efficient” deal that gets done.

• Matthias Smith at Pioneer Capital Advisory talks through how to structure your seller note - and get his gold standard 10-year amortization - here.

• This might seem obvious, but doing your research before a first seller call is essential to the success of that conversation and relationship. If you come into a call that you requested with questions that could be answered by simple pre-work, it wastes valuable discovery time and tells the seller that you’re not serious (or passionate) about their business.

Question:

Hit reply and tell us - If you’ve gone up against multiple buyers in a business acquisition and won, what set your offer apart?