Have to Sell vs. Want to Sell — And Why Buyers Can Tell the Difference

Every PE firm has the same first question on every new opportunity. It isn't about revenue. It isn't about EBITDA. It's one word: why?

Why are you selling? Why now? Why this year instead of next?

The answer to that question is worth millions. Because the buyer isn't just trying to understand your motivation. They're trying to understand your leverage — and leverage is always a function of time.

A founder who wants to sell has time. A founder who has to sell doesn't. Buyers can tell the difference in 15 minutes, and they price the difference on page one of the term sheet.

The Last Flight Out

Think about buying the last seat on a flight home.

If you're running late for a vacation and you miss this flight, you'll catch one tomorrow. The gate agent sees you're mildly inconvenienced. You have time. The airline sells you the seat at the normal price.

Now imagine you have to be home tonight. Your mother is in the hospital. Your wedding is tomorrow. You're presenting to your board in 14 hours. There is no "catch one tomorrow." The gate agent doesn't have to ask why. She can read it in your face. The seat costs whatever she says it costs, and you're going to pay it.

Same seat. Same plane. Two completely different prices. The only thing that changed was whether you had somewhere else to go.

The Two Categories

Every seller walks into the market in one of two categories. The category is usually set by the calendar, not by the business.

The difference isn't who you are. It's when you started.

The Tells Buyers Look For

PE firms have done hundreds of these deals. They know what a "have to" looks like.

Life events in the data room. Divorce filings, health disclosures, a partner buyout. Any one of these answers "why now?" in a way the buyer will remember for the rest of the negotiation.

A timeline that doesn't breathe. When the seller says "we'd like to close by end of Q3" on the first call — and Q3 is four months away — the buyer knows something is driving that date.

No second buyer in the room. A founder who ran a proper process has three to five interested parties. A founder who has to sell has one buyer and prays they don't walk.

The business shows strain. Revenue is flat. A key customer left. A key employee left. The founder's energy on the call is tired instead of aggressive. All of these signal a seller whose window is closing.

The Desperation Discount

The same business with the same EBITDA closes at dramatically different prices depending on which category the seller is in. The "want to" seller gets 70–80% of total consideration as cash at closing, objective earnout triggers, narrow reps with RWI insurance, and a reasonable non-compete. The "have to" seller gets 50–60% cash, EBITDA-based earnouts the buyer controls, broad personal indemnification, and a five-year non-compete covering the entire industry.

The headline numbers might be within 10–15% of each other. The real economics — after earnouts, escrow, and indemnity — can differ by 30–50%.

The buyer isn't cheating. They're pricing the risk that the seller's timeline creates.

The Inversion

Most founders think about exit preparation as something you do before you sell. That's the wrong frame.

Exit preparation is something you do before you know whether you'll have to sell. It's the work that keeps you in the "want to" category regardless of what the next 36 months throw at you.

You don't prepare a business for sale because you're going to sell it next year. You prepare a business for sale because you don't know which year you'll need to.

The founders who get the best deals didn't decide to sell and then decide to prepare. They decided to prepare, and then — years later — decided to sell.

Those are the same business. One of them is worth a lot more than the other.

Notes

This post is part of the Transition Operators series on preparing founders for a successful exit.