Business Owners, as Sellers, Be Aware of the “Proprietary Deal”

When selling your business, a proprietary deal may seem efficient and appealing, but this podcast explains why owners should approach these offers with caution. A proprietary deal grants one buyer exclusive access before the company is exposed to the broader market. While this can create a faster and seemingly simpler transaction, it often removes the competitive tension that drives higher valuations and stronger deal terms. For owners of high quality lower middle market businesses, that lack of competition can come at a significant cost.In this episode, we break down the hidden risks sellers must consider. Without multiple bidders, purchase price and structure may favor the buyer. Sellers may face less cash at closing, more restrictive terms, and limited flexibility. We also explore how proprietary processes can restrict exposure to other qualified buyers who may offer a better strategic fit or higher value. Additionally, sharing sensitive information in an exclusive setting can create competitive risk if a transaction does not close.Most importantly, this podcast highlights why a competitive bidding process or controlled auction often delivers stronger outcomes. Broader market exposure can maximize sale price, improve deal terms, and provide greater leverage throughout negotiations. With the right M and A advisory strategy, sellers can align the sale process with their financial goals and legacy objectives. Explore more insights, guides, and resources at www.Shaughnessy.GroupYou're listening to The Shaughnessy Group Podcast—insights on buying, selling, and growing Canadian businesses in the lower-middle market.Let's begin. This podcast is for informational purposes only and is not professional advice. Consult qualified advisors for your specific situation.Important Notice: These podcast notes are unofficial summaries created for personal reference and educational purposes only. They are not intended as a verbatim transcript, official record, or endorsement by the podcast hosts, guests, or producers of Shaughnessy Group. While every effort has been made to capture key insights, quotes, and discussions accurately, errors, omissions, or interpretations may occur due to the subjective nature of summarization. Listeners are strongly encouraged to refer to the original episode for full context, nuances, and original audio.No Advice Provided: The content discussed in Shaughnessy Group episodes, including these notes, does not constitute professional, financial, legal, medical, or investment advice. Any ideas, strategies, or opinions shared by guests are their own and should not be relied upon without independent verification and consultation with qualified professionals.Copyright & Usage: All rights reserved. These notes are derived from publicly available podcast episodes and are shared under fair use principles for non-commercial, transformative purposes. Reproduction, distribution, or commercial use without permission from the podcast creators is prohibited.For questions or permissions, contact the Shaughnessy team directly. Enjoy the learning, but always do your due diligence!