The Seller's Power Shift: How to Defend Valuation After the LOI

Praveen Ghanta, Founder and CEO of DevHawk

Twenty-four hours before diligence expired, the buyer's board came back and cut the offer by almost 50%.

Praveen Ghanta bootstrapped HiddenLevers to over $8M ARR at 52% EBITDA and signed an LOI at 16x ARR. Then a $2M enterprise contract with TD slipped, and the private equity owners behind the buyer, Orion, took an ax to the price. Praveen walks through three rounds of renegotiation, setting a walkaway number, and landing around $130M with a small earn-out.

He also covers what to define in the LOI before exclusivity, how he cut a $600K sales tax claim to about $100K line by line, and an integration lesson every buyer should hear: his team shipped at two to three times the acquirer's engineering velocity, and that dropped 70% after close.

Praveen's technical integration worked because it was mapped during diligence and tied to the earn-out. Sales integration wasn't, and his team lost control on day one. See how SPS Commerce uses DealRoom to carry diligence decisions through to integration: here.