Herringbone Digital Blog

When a buyer offers you a big number for your agency, it’s tempting to think:

“That’s it — I’ve won.”

But in M&A, the highest price doesn’t always mean the best deal.

In fact, I’ve seen plenty of founders who took the “biggest offer” and later regretted it — while others who accepted slightly lower bids walked away much happier (and often richer) in the long run.

1️⃣ Structure matters more than sticker price.
Let’s say two buyers both offer you $10 million.
Buyer A: $10M total — but $5M is upfront, and $5M is an earnout tied to hitting revenue goals over two years.

Buyer B: $8.5M all-cash, clean close, minimal post-deal obligations.

On paper, Buyer A’s deal looks better. In reality, Buyer B’s deal may be far safer and easier to execute — especially if the earnout terms are vague or dependent on variables outside your control.

In M&A, how you get paid is often more important than how much you get paid.

2️⃣ Terms can quietly erode value.
Beyond price, deals include dozens of details that impact your actual payout:
Working capital requirements

– Escrows and holdbacks
– Non-compete clauses
– Post-closing adjustments

A deal with complex or one-sided terms can chip away at your take-home value long after the headlines fade.

3️⃣ Cultural and strategic fit affect long-term outcomes.
If you’re staying on post-acquisition — and most founders do — the buyer’s culture will affect your happiness, your team’s morale, and your ability to hit your earnout.

If the buyer’s expectations, leadership style, or vision clash with yours, it doesn’t matter what the number says.

Misalignment will eventually cost you — in stress, turnover, and lost opportunity.

4️⃣ The “sure thing” is often the smarter play.
A slightly smaller offer from a serious, experienced buyer who’s closed similar deals before can be far better than a “record-breaking” bid from someone who’s never done an acquisition.

Deals don’t always die because of disagreements — they die because buyers can’t follow through.

Certainty of close is a value all its own.

So, before you jump at the highest number, take a step back.

Ask yourself:
– Is this offer realistic?
– Are the terms clean?
– Does this buyer feel aligned with my values and vision?

The best deal isn’t always the biggest — it’s the one that’s fair, clear, and built to last.

👉 If you had two offers on the table — one higher but complex, the other smaller but clean — which would you take?

Contact us if you’re and agency owner and have considered selling or joining something bigger.

Let’s bust one of the biggest myths in the agency world:

“M&A is for billion-dollar companies — not for small to mid-sized agencies like mine.”

I hear this all the time.

Founders assume M&A means Wall Street suits, billion dollar valuations, 1000-page contracts, and corporate jargon.

But here’s the truth: most M&A activity actually happens in the middle market — among businesses doing $2M to $20M in revenue.

That means agencies just like yours.

Why smaller agencies are prime for M&A
1️⃣ Strategic buyers want specialization.
Large agency networks and PE-backed platforms are hunting for niche expertise.
If you dominate a specific vertical (like legal, dental, home services, or healthcare), you’re far more valuable than a generalist.

2️⃣ Scale is faster through acquisition.
For buyers, acquiring an agency that already has clients, systems, and a team in place is far more efficient than building from scratch.
That’s why small-to-mid-size shops are attractive — you’ve already done the hard part.

3️⃣ It’s not just about selling — it’s about partnering.
M&A doesn’t always mean “selling out.”
Sometimes it’s about bringing in a partner who can help you grow faster: adding resources, cross-selling opportunities, or shared infrastructure.
Many founders who “sell” end up running much bigger agencies post-acquisition.

The real barrier isn’t size — it’s readiness.

Most agencies could be acquirable within a year or two — if they focused on clean financials, strong retention, and leadership depth.

Buyers don’t need you to be massive. They need you to be organized, predictable, and profitable.

That’s it.

So if you’ve ever thought, “We’re too small for that,” I’ll challenge you to reframe it.

M&A isn’t just a big-company game. It can be for you as well

Contact us if you’re and agency owner and have considered selling or joining something bigger.

When most agency owners start talking to buyers, they treat it like an interview — with them in the hot seat. But as a buyer, I enjoy it when sellers grill me. It shows (a) they are a serious seller and (b) they are an educated seller.

Because selling your agency isn’t just a financial decision — it’s a partnership. And I want both parties to enter that partnership with eyes wide open and 110% confidence that it’s the right decision.

So come at me bro. I’m ready and waiting

#️⃣ “Do you have committed capital or do you have to raise the money?”
Over the last 6 months, I’ve had three sellers come back to me after they signed an LOI with someone else because the buyer didn’t have the necessary funds. With so many search funds and independent sponsors out there, it’s worth understanding how likelihood the buyer is going to be able to close on the transaction.

#️⃣ “What’s your vision for my agency after the acquisition?”
Do they plan to integrate you fully into their brand? Keep you independent? Merge operations over time?Their answer reveals a lot about whether they see you as a strategic partner or just a transaction. If they can’t articulate a clear vision — or it doesn’t align with yours — that’s a red flag.

#️⃣ “How do you treat founders and teams post-acquisition?”
Ask about their track record. Have they done other acquisitions before? How did those founders feel afterward? You can even ask to speak with previous sellers — a good buyer will encourage it. If they hesitate, that tells you something too.

#️⃣ “What does success look like for you in 3 years?”
This question helps you understand their long-term goals. Are they aiming to grow and hold? Or grow and flip to another buyer? Neither is wrong — but you should know what you’re signing up for. If your earnout or equity rollover depends on their next move, alignment here is critical.

#️⃣ “What are your expectations of me after closing?”
Are you staying on for 6 months? 2 years? Leading integration? Helping with strategy? Clarity here prevents resentment later. You don’t want to discover mid-transition that you’re suddenly an “employee” of your own company.

#️⃣ “How will decisions be made after the deal?”
This one is often overlooked — and it’s huge. If you’re used to autonomy and quick decision-making, but your new partner operates through committees and slow approvals, frustration will set in fast. Ask how they make decisions today. If it doesn’t fit your rhythm, that friction won’t disappear after the ink dries.

Ask the questions. Good buyers will welcome them.

Contact us if you’re and agency owner and have considered selling or joining something bigger.

A successful acquisition doesn’t end on closing day.
In fact — that’s when the real work begins.

The way you manage the transition period after a sale can determine whether the deal is remembered as a success or a slow-motion train wreck.

Because here’s the truth: the ink may be dry, but your people, your clients, and your buyer are all watching how you handle the next 90–180 days.

1️⃣ Start with a clear transition plan.
Before closing, work with the buyer to define who will do what and when.
Who’s communicating with clients? Who’s announcing to the team? Who’s handling finance and HR handoffs?

Uncertainty kills momentum — clarity creates confidence.

2️⃣ Over-communicate with your team.
Your employees are nervous. They’ve heard horror stories about acquisitions. They want to know:
– What does this mean for me?
– Is my job safe?
– Who do I report to now?

Silence breeds fear. Over-communication builds trust.

Tell them early, tell them often, and tell them why the deal happened — not just what’s changing.

When founders frame the acquisition as an opportunity (“we now have more resources, stability, and growth potential”), it sets the tone for everything that follows.

3️⃣ Take care of your clients.
Your clients will be just as curious — and cautious — as your team.
They’ve built relationships with you personally, and any hint of disruption can make them nervous.
– Reach out directly. Reassure them that service continuity is the top priority.
– Introduce new leadership if relevant, but don’t disappear overnight.

Remember: the fastest way to lose post-deal value is to lose clients.
Retention is the heartbeat of a successful transition.

4️⃣ Stay engaged during the handoff.
Even if your plan is to exit, stay present during the agreed transition period.
Be proactive, responsive, and collaborative.

Depending upon your deal, you may not be running the business anymore — but showing that you care about its future earns you goodwill, protects your reputation, and strengthens your legacy.

And if you have an earnout or equity rollover, it also protects your wallet.

A smooth transition doesn’t happen by accident. It’s the result of preparation, empathy, and leadership.

When done right, it honors what you built and sets your team and clients up for success long after you’re gone.

Contact us if you’re and agency owner and have considered selling or joining something bigger.

I’ve been part of dozens of agency M&A deals — on both sides of the table.

And if there’s one thing I’ve learned, it’s that seller’s remorse is real.

Even when the money clears, even when the deal goes smoothly, many founders look back and say: “I wish I’d done a few things differently.”

The good news? You can avoid most of those regrets — if you know what they are.

1️⃣ “I wish I had started preparing earlier.”
Most founders underestimate how long it takes to get truly “sale ready.”
They get that first call from a buyer, feel flattered, and think, “Sure, we can talk. ”Then they realize they don’t have clean financials, their contracts are outdated, or key metrics aren’t tracked.

The result? They either have to rush, or accept a lower price.

Preparation isn’t just about spreadsheets — it’s about telling a confident, data-backed story about your business.
Start 12–24 months before you think you need to. You’ll thank yourself later.

2️⃣ “I wish I had been clearer about my role post-sale.”
So many founders get to closing day without fully understanding what their life will look like after the deal.

Are you expected to stay for six months? A year? Indefinitely? Who makes decisions now?

Those details matter — a lot.

When expectations aren’t aligned, frustration builds fast.
– The buyer feels like the founder is disengaged.
– The founder feels like they’ve lost controly
– Clarity upfront prevents resentment later.

3️⃣ “I wish I had understood the deal terms better.”
This one is huge. Many sellers get fixated on the top-line number and overlook the fine print.

Things like working capital adjustments, earnout conditions, and non-compete clauses can dramatically affect what you actually walk away with.

If you don’t fully understand every term in your LOI or purchase agreement, ask questions. Bring in advisors who do this every day. A good lawyer or M&A advisor doesn’t just protect you legally — they protect your economics and your sanity.

Selling your agency can be one of the most rewarding moments of your
career.

But it’s also complex, emotional, and easy to underestimate. So be prepared and pay attention to the details

Contact us if you’re and agency owner and have considered selling or joining something bigger.

If you’ve never sold a business before, it’s easy to picture the finish line like this: you sign the papers, money hits your account, and you ride off into the sunset.

Sometimes that’s true. But in most cases — especially in agency M&A — life after the sale is a transition, not a vacation.

And that’s not a bad thing. It’s just reality.

Three common post-sale paths

1️⃣ The Full Exit
You sell 100% of your agency, step away, and move on to the next chapter of your life.

This path can be incredibly freeing — especially if you’ve spent years grinding and are ready to focus on family, hobbies, or even a new business.

But it can also be emotionally complex. Many founders underestimate how much of their identity is tied to their company. The sudden quiet can feel strange after years of hustle.

2️⃣ Stay On Temporarily
In this scenario, the founder keeps running the agency, but with a view to transitioning out over a period of time ranging from 6 months to 24 months. This gives the founder an opportunity to slowly say goodbye to the business while helping the new owner transition into the role.

3️⃣ Stay On For A Longer Ride
This is the most common outcome in private-equity-backed roll-ups or strategic acquisitions. The founder keeps running the agency, but now with more support: new capital, shared resources, professionalized systems, and often, less personal risk.

In this scenario, the founder can often roll equity allowing them to take some chips off the table now, but still participate in the next sale when the combined group exits down the line.

When it works, this can be a wealth multiplier — a “second bite of the apple.”
But it only works well when you truly believe in the buyer’s long-term vision and execution.

The emotional reality
Even in great deals, selling your agency is a big life change.
Your calendar changes. Your role changes. Your sense of ownership shifts.
Many founders describe the first 3–6 months as a mix of relief, pride, and… weirdness.
You’ll suddenly have fewer fires to put out, but also less control over decisions.
Your employees might start reporting to new leaders. Your logo might sit under a new brand.

And that’s okay. The key is to go in with clarity about your role, your boundaries, and your goals for this next chapter.

Selling your agency isn’t the end of your story — it’s just the end of one chapter. But potentially the beginning of the next one.

Contact us if you’re and agency owner and have considered selling or joining something bigger.

When people talk about selling their agency, the conversation almost always starts with numbers — valuation, multiples, EBITDA, earnouts.

But here’s something I’ve learned after years of M&A work: the success or failure of most acquisitions isn’t determined by the financials. It’s determined by cultural fit.

You can negotiate deal terms. You can structure earnouts. You can model synergies.

But you can’t negotiate culture.

What “cultural fit” really means in M&A
Cultural fit is the alignment of values, decision-making styles, communication, and priorities between buyer and seller.

In practical terms, it shows up in questions like:

– How are employees treated and developed?

– Who makes the decisions and how fast are they made?

– What does leadership look like day to day?

If those things don’t align, friction shows up immediately — and it spreads fast.

What happens when it’s missing, I’ve seen great agencies lose their soul after being acquired by the wrong partner.

❌ Founders become frustrated because the new owners impose rigid systems.
❌ Employees feel lost as their culture of creativity turns into one of reporting and control.
❌ Clients sense the shift, and relationships start to erode.
Financially, those deals look fine on paper. Operationally, they struggle.

What happens when it’s right. When cultures align, it’s magic.

✔️ The buyer brings resources, process, and stability.
✔️ The seller brings energy, relationships, and deep client understanding.
✔️ Together, they scale faster than either side could alone.
✔️ The founder feels proud watching their team thrive with new opportunities.
✔️ The buyer gets what they paid for — and more.

How to test for cultural fit
– Spend real time with the buyer before signing the LOI.
– Ask about their post-acquisition track record — how do they integrate other teams?
-Talk to other founders who’ve sold to them.
-Observe how they treat people who aren’t in the negotiation room.

Trust your gut. Culture doesn’t show up in a spreadsheet, but you’ll feel it in every conversation.

When you sell your agency, you’re not just selling assets — you’re handing over your legacy, your team, and your reputation.

So don’t chase only the highest price.

Chase the right partner.

Because when the culture fits, everything else falls into place.

Contact us if you’re and agency owner and have considered selling or joining something bigger.

Let’s talk about one of the most misunderstood (and emotionally charged) parts of any deal: negotiation.

Most agency owners approach a negotiation thinking it’s all about one number — the price.
But that’s exactly where most sellers go wrong.

In reality, the purchase price is just one part of the deal. The structure — how that price is paid, under what terms, and with what obligations — often matters far more.

Here are a few common traps I see sellers fall into again and again:

1️⃣ Focusing only on the headline number.

A $10M offer sounds better than $8M… until you realize $4M of it is an earnout tied to performance metrics you don’t control.
Always ask: What’s guaranteed vs. what’s contingent?
A lower price with cleaner terms often beats a higher price full of conditions.

2️⃣ Assuming the first LOI is final.

The LOI (Letter of Intent) feels like a finish line — but it’s actually the starting line.
Everything that follows — due diligence, final agreements, working capital adjustments — can change the economics of the deal.
Smart sellers keep some flexibility and don’t emotionally “bank” the LOI number too early.

3️⃣ Ignoring working capital.

This one surprises a lot of founders.
Buyers expect a certain amount of working capital (cash, AR, prepaid expenses) to remain in the business at closing. If you haven’t planned for that, it can reduce your actual cash proceeds by hundreds of thousands.
Don’t find that out the week before closing.

4️⃣ Negotiating emotionally.

Selling your agency is personal — you built it. But emotion clouds judgment.
I’ve seen founders walk away from great offers because they felt “disrespected,” and others accept poor deals because they just wanted it over with.
Take a breath, get advice, and remember: this is a business transaction.

5️⃣ Not understanding post-closing obligations.

Non-competes, transition periods, consulting agreements — these can all shape what your life looks like after closing.
Don’t just focus on the check. Think about what you’ll actually be doing 3, 6, 12 months later.

Here’s my advice: don’t negotiate to win — negotiate to align.
Because when alignment is strong, both sides walk away happy, and the business you built continues to thrive.

Contact us if you’re and agency owner and have considered selling or joining something bigger.

Few words in M&A trigger as much emotion as “earnout.”

If you’ve ever talked to someone who sold their agency, chances are you’ve heard horror stories:

“We never got our earnout.”
“They changed the rules after closing.”
“It was just a way to shortchange us.”

And I get it. I’ve been on both sides of earnouts — as a seller and as a buyer — and I can tell you this: earnouts can be frustrating when structured poorly, but powerful when done right.

So what exactly is an earnout?
An earnout is a portion of the purchase price that’s paid later, based on the performance of the business after the sale. It’s typically tied to metrics like revenue, EBITDA, or client retention.

Here’s why earnouts exist:

• To bridge valuation gaps. Maybe you think your agency is worth $10M, but the buyer thinks it’s worth $8M. An earnout can close that gap if the business performs as you expect.
  
• To align incentives. The buyer wants to ensure you stay motivated after the sale. The seller gets upside if the company continues to grow.
  
• To manage risk. Buyers want to make sure that key clients or staff don’t vanish post-close. Earnouts reduce their downside if things change.
  

Now, the bad reputation comes from poor design — vague metrics, unfair control, or lack of transparency. If you’re staying on post-sale but the buyer controls the levers that determine your payout, you’ve just given them the ability to “move the goalposts.”

The key is to structure earnouts clearly and fairly:
✅ Define metrics precisely (e.g., “Revenue from existing clients” vs. “total revenue”).
✅ Agree on what’s in your control.
✅ Set timelines that are realistic (usually 1–3 years).
✅ Align reporting and visibility so you can track performance.

When structured this way, earnouts can actually be a win-win. I’ve seen sellers double their initial payout because the business exceeded expectations. In those cases, the earnout wasn’t a burden — it was a reward.

From a buyer’s perspective (mine included), nothing makes me happier than paying an earnout. It means the acquisition worked. It means the founder stayed engaged, clients were retained, and the company grew. That’s a win for everyone.

So before you write off earnouts as “bad,” understand what they really are: a tool. Like any tool, it depends on how it’s used.

👉 If you sold your agency tomorrow and had to choose — would you prefer all cash up front, or a lower upfront price with a chance to earn more later?

Contact us if you’re and agency owner and have considered selling or joining something bigger.

When most agency owners hear the words “due diligence,” their first thought is: “Oh no — this is where the fun ends.”

And to be fair, diligence can be intense. It’s the part of the process where the buyer starts verifying everything you’ve told them — from your financials to your operations, contracts, people, and even culture.

But here’s what many owners don’t realize: due diligence isn’t meant to “catch you out.” It’s meant to confirm confidence. Buyers are about to write a big check, and they want to make sure the story matches the data.

Here’s what a typical diligence process involves:

Financial Review: Buyers dig into your P&Ls, balance sheets, tax returns, AR/AP aging, and customer-level revenue. They’re checking for accuracy, consistency, and hidden risks.

Customer & Revenue Analysis: They’ll look at churn, client concentration (does one client make up 30% of revenue?), contract lengths, and recurring vs. project-based work.

Operational Review: How does your delivery process work? What tools do you use? How efficient is your team?

HR & Payroll: Who are your key employees? Are there employment agreements in place? What’s your compensation structure?

Legal: Corporate filings, intellectual property ownership, insurance, contracts, potential disputes — all get reviewed.

Sound overwhelming? It can be — especially if you’re unprepared. But the sellers who do best in diligence are the ones who start preparing months (or years) before they ever talk to a buyer.

They keep clean, up-to-date financials. They store contracts in one place. They can quickly show customer lists, renewal dates, and retention metrics. In short: they run their business as if a buyer could ask to see it tomorrow.

Here’s what that does:
– It keeps the process efficient (less time answering requests).
– It signals professionalism and transparency.
– And it keeps momentum — which is critical, because long diligence processes kill deals.

I’ve seen deals drag on so long that enthusiasm fades on both sides. I’ve also seen deals close in 45 days because the seller was buttoned up and responsive.

So if you’re an agency owner thinking about selling in the next few years, start treating your business like it’s already in diligence. You’ll be amazed how much smoother — and more profitable — your future exit becomes.

Contact us if you’re and agency owner and have considered selling or joining something bigger.