Exit Story: Deal Collapsed at LOI, Sold for 6x EBITDA Anyway

Jay Richards spent five months deep in an acquisition process. He had a letter of intent. He had mentally checked out. He was planning what came next. 

Then issues surfaced in diligence and the deal collapsed. 

This week on Built to Sell Radio, Jay walks John Warrillow through the full story of selling Imagen Insights, a qualitative research platform with clients like Visa, Google, and Amazon, and how you discover how to navigate two very different acquisition conversations and come out the other side with a deal you are genuinely happy with. 

You’ll learn why: 

• an LOI means far less than you think, and how problems in your books can kill a deal 

• founders who shop their company can signal desperation, and what Jay did instead 

• the eventual buyer valued the business on EBITDA instead of revenue, and why that worked in Jay’s favor 

• Jay accepted an earn-out worth more than half the deal, and why he was comfortable with it 

• handing out equity without vesting created a problem at the worst possible moment 

• a long-standing accountant relationship does not guarantee clean books, and how this nearly killed the deal 

• the moment the DocuSign came through did not bring relief, but a flood of new ideas 

Show Notes & Links

Connect with Jay on LinkedIn

Learn more about Imagen Insights

Jay’s pod

Definitions

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.

Roll Over Investor: A rollover investor, in the context of selling a business, refers to an individual or entity that rolls some of their proceeds from the sale with the buyer. This strategy allows the seller to defer capital gains taxes and potentially leverage their expertise or resources in a new venture.

About Our Guest

Jay Richards

Jay Richards is an entrepreneur and founder of Imagen Insights, a platform designed to give brands direct access to the opinions and behaviors of younger audiences. He built Imagen Insights to solve a core challenge: helping companies make faster, more informed decisions through real-time consumer feedback. His approach centers on identifying clear market gaps and executing with simplicity, speed, and long-term value in mind.