Company Sale Courtship Process
Walk someone through the full psychological and tactical arc of selling a company — the courtship, the due diligence purgatory, and the close — using James Altucher’s framework from selling multiple companies and advising on dozens more.
When to Use
The user is in or about to enter a company sale process. They might say:
- “I have a buyer interested — what do I do next?”
- “We’re in due diligence and I’m going crazy — what do I do?”
- “How do I run a sale process for my company?”
- “A buyer wants to meet — how do I approach these conversations?”
- “How do I actually sell a company? I’ve never done it before.”
- “I’m freaking out during this waiting period — is that normal?”
The Core Principle
From James Altucher (GkNJbj5qbXM.md):
“Selling a company is very difficult. There are three skills: starting a company, building it, and selling it.”
And:
“People don’t realize selling a company is very difficult… Only four out of ten can be above the median, and only one out of ten is really good enough to sell a company properly.”
Most founders who can start and build a company treat the sale as an afterthought — a transaction that happens naturally once there’s a willing buyer. Altucher argues it’s a distinct skill that requires its own preparation, psychology, and tactics. The sale is as much about managing your own behavior under pressure as it is about negotiating the right terms.
Phase 1: The Courtship (Dating)
Company sales begin with a mutual discovery process that closely mirrors romantic courtship.
James Altucher:
“Your company’s up for sale, you meet a bunch of people, there’s this courtship, you kind of fall in love with each other. Just like in a real courtship. And then suddenly you move into a different period where lawyers take over.”
During the courtship phase, the work is relationship-building and vision alignment — not numbers.
What the courtship requires:
“You have to be sincere the whole way through. You have to have a vision that matches their vision very strongly, and it has to explain why you would sell. If your business is so great, why do you want to sell it? There’s that inherent contradiction.”
Altucher’s answer to the “why sell?” question:
“I was always aware that I would be better off with a better-capitalized partner. Maybe I would limit my upside, but the first time you sell a company for millions, and the second time, if you’re broke, you still need a few million. And then the third time, it’s okay to not sell for billions because you want that initial chunk.”
The answer must also articulate synergy — not just “I need cash” but why this buyer specifically unlocks more value than you could create alone:
“You have to say, look, here’s how one plus one equals three. You have to be really persuasive on why one plus one equals three — even for you personally. You have to be able to express that this vision is going to benefit you personally if you partner with this other company. And it has to really make sense.”
Ask the user: What is your genuine answer to “why sell?” — one that’s both honest and framed around the buyer’s value? What does one plus one equal three look like with this specific acquirer? Help them articulate that narrative.
Phase 2: Due Diligence Purgatory
The due diligence period is where most sales fall apart — not because of the numbers, but because of founder psychology.
James Altucher:
“Then suddenly you move into a different period where lawyers take over. It’s a waiting period. It’s a due diligence period. It’s a very painful period, because before you were in this massive selling-and-dating mood, but now you’re living together and getting to know each other.”
And his personal account of what it did to him:
“By the way, that’s when I started this podcast — during the due diligence period. I got so itchy because I was waiting and I was like, oh my god, I’m going to jeopardize this deal either because I’m going to push too hard or I’m going to go start another business, which is the worst thing I can do while trying to sell. I needed something to do.”
The two failure modes during due diligence:
- Pushing too hard — checking in too often, demanding answers, creating friction with the buyer’s team
- Going dark — disappearing into a new project and letting the deal drift
The correct posture: stay engaged, responsive, and visible — but do not push for faster movement than the buyer’s legal and finance teams can sustain.
Ask the user: What stage of the process are you in? If you’re in due diligence, what is the agreed timeline and what open items remain? Help them identify what they can control (responsive document delivery, clear answers to questions) vs. what they cannot (legal timelines, buyer committee approvals).
The side project trap: The worst thing a founder can do during due diligence is start visibly working on a new business. It signals that you’re already mentally out of the current company — which creates doubt about your earnout commitment and your team’s stability.
Phase 3: Surviving the Deal
The deal is not done until it is signed. Several things can kill it after the courtship phase:
Employee retention:
“You have to keep all your employees because usually there’s some back-end earnout.”
If key employees leave during due diligence, the buyer may reprice or walk. Manage your team’s anxiety during the process — which requires honest communication without premature disclosure.
Deal structure literacy:
“You have to understand deal structure so you’re not ripped off. It’s very easy to be ripped off by lawyers in a deal, and people don’t realize that.”
The most common traps: representations and warranties that are too broad, indemnification caps that expose you after close, earnout structures with metrics the buyer controls, working capital adjustments that erode the headline price.
Ask the user: Do you have an M&A attorney — not your general counsel, an actual M&A specialist? If not, get one before you go to LOI.
Phase 4: The Negotiation on Price
The “what do you want?” question is the hardest moment in the sale.
James Altucher:
“When they come to you and say, how much do you want for your company — that’s a very hard question to answer. You don’t want to sound greedy. You don’t want to sound desperate. You don’t want to underprice yourself.”
Tactics that work:
- Don’t anchor first if you can avoid it — make them put a number on the table
- Have a range ready based on your three valuation methods (see the Three-Method Company Valuation framework)
- Anchor high within a credible range — you can always come down, you can rarely go up
The core negotiating skill Altucher identifies:
“There are all sorts of negotiating techniques to help them answer that question in a way that works for both sides.”
The phrase “works for both sides” is key. The best M&A deals are not won — they are structured so both parties feel like they got what they needed. An adversarial negotiation produces a signed deal and a broken integration.
Phase 5: The Earnout and What Comes After
Most company sales include some form of earnout or equity rollover — the seller participates in future upside in exchange for staying engaged post-close.
Altucher on what this means structurally:
“You also have to say, look, here’s how one plus one equals three… you have to be able to express that this vision is going to benefit you personally if you partner with this other company.”
Suli Ali’s assessment of the Milk Road deal structure (from F-McXK-60BI.md):
“I love the deal structure that Milk Road ended up with — a bunch of cash up front and then a bunch of equity in the new company where those two guys want to grind it out for years and build a giant business. In my head, some percentage of the work they do is just creating value for you and Ben. I love that deal structure.”
Ask the user: What is the earnout or equity rollover structure being proposed? Walk through what it would take to hit the earnout — is that realistic, and do you have control over the metrics?
The Psychology of Multiple Sales
Altucher sold multiple companies — and noticed a pattern in both his wins and his losses:
“There were three skills: starting a company, building it, and selling it.”
Each sale teaches you something the next sale uses. The founders who sell multiple companies well are not necessarily smarter — they’ve internalized the process and the psychology. The first sale is the hardest because you have no model for what normal looks like during due diligence purgatory.
Quick Reference
| Phase | Timeline | Primary Risk | What To Do |
|---|---|---|---|
| Courtship | Weeks-months | Misaligned vision | Build relationship; articulate 1+1=3 |
| LOI and structure | Days-weeks | Bad deal terms | Get M&A counsel; understand every term |
| Due diligence | 30-90 days | Founder impatience / new ventures | Stay engaged; do NOT start new projects |
| Close | Days | Last-minute repricing | Document everything; hold on reps & warranties |
| Post-close | Months-years | Earnout metric manipulation | Negotiate metric definitions upfront |
Search the Archive
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grep -ri "one plus one equals three\|why.*sell.*company\|waiting period" transcripts/
grep -ri "James Altucher\|sold.*companies\|M&A.*psychology" transcripts/
Output
After working through this framework, deliver:
- Vision alignment narrative — why sell, and why this buyer specifically makes 1+1=3
- Due diligence readiness checklist — documents, dataroom, open items with owner and due date
- Anchor price range — based on three valuation methods, with the recommended opening position
- Deal structure red flags — the specific terms to push back on in the LOI or purchase agreement
- Earnout reality check — is the earnout achievable, and who controls the variables?
Source
Entrepreneur Who Lost Millions Breaks Down How To Come Back Financially — Sam Parr and Shaan Puri interview James Altucher, May 2020.