Many founders who receive a Non-Binding Offer consider it a big achievement. Especially after months or years of development, a potential acquirer looks like a sign that hard work is bearing fruit. But being excited sometimes may lead founders to make mistakes. There is no doubt that an NBO is an important step, but it’s not a done deal, and it doesn’t guarantee an outcome. We’ve compiled a list of the most common mistakes founders make when navigating an NBO:
This is probably the most frequent mistake. Founders often celebrate an NBO as if the acquisition is already completed. Investors may begin calculating returns, teams may start discussing future roles, and shift strategic decisions toward transaction preparation. The reality is that a significant number of potential transactions will never close as the due diligence will reveal factors that will make the buyer to stop the process. Until agreements are signed and the deal closed, the outcome remains unclear.
The value in the headline always gets attention, but it doesn’t show the whole story. If, let’s say, a $100 million offer includes aggressive performance-based pay terms, retention packages, performance targets, and/or a complicated payment structure, it can be less attractive than a lower-priced competing offer. Therefore, tech founders should evaluate the entire deal structure, not just the number in the first paragraph.
In software startups, due diligence often focuses on customers, growth, and financial performance. In deep tech, due diligence goes much deeper.
Acquirers want to understand:
Founders who wait until an NBO arrives to organize these materials often find themselves trying to gather critical materials at the last minute. Also the due diligence might highlight vulnerabilities in the growth that will turn off the potential buyer.
Many deep tech companies are built on patents, university startups, or licensed technologies from third parties. However, even one outstanding IP issue can significantly affect a transaction. So before getting involved in serious discussions, founders should have a clear understanding of:
It’s common for acquirers to request exclusivity after making an NBO. Exclusivity can be reasonable in some cases but agreeing too early or for too long can weaken a startup’s negotiating position. Once conversations with other potential buyers or investors stop, your leverage naturally starts to drop. That’s why founders should think carefully about exclusivity, and ensure they are receiving enough commitment in return. The use of door fees (or exclusivity fees) can be a tool to test the commitment of the buyer.
It seems surprising, but several startups slow down after receiving acquisition interest. Sales efforts get put on hold, recruitment slows, and product development loses momentum. And this is risky. Since typical attraction for buyers is growth and progress. A slowdown in performance during deal discussions can negatively impact how the company is valued. The best approach is usually to keep building as if no deal exists.
An NBO may look attractive to founders, but investors, board members, or key shareholders see things differently. Misalignment can lead to friction later in the process, especially when deadlines get tight and pressure increases. Getting everyone on the same page early around expectations, priorities, and outcomes usually makes negotiations much smoother.
Strategic fit often matters as much or more as price. As a founder, you should think about:
The highest offer is not always the best outcome. A Non-Binding Offer is an important signal that your company has created something valuable. But it is still the beginning of a negotiation, not the end.
The strongest founders approach an NBO with both optimism and discipline. They continue to focus on developing the business and carefully prepare for due diligence. And if any opportunity comes knocking, they evaluate it on more than just price alone. Because in acquisitions, the details matter far more than the headline valuation.
Many founders who receive a Non-Binding Offer consider it a big achievement. Especially after months or years of development, a potential acquirer looks like a sign that hard work is bearing fruit. But being excited sometimes may lead founders to make mistakes.
A successful deep-tech M&A transaction requires more than just buying and selling — it requires unique insights that no ‘typical’ advisor should have access to. The success of such a complex deal hinges on knowing how new technologies relate to other technologies, IP, and current & future market trends.
Many founders underestimate how different deep tech fundraising really is. Deep tech funding rounds don’t follow the same rules as software funding rounds. These rounds take more time, they are larger, and are validation-driven due to long-lasting R&D cycles and capital intensity. Imagine that each round answers the question, then what question would it be?