Why deals die
A sale can fail at any stage. In our experience, buyers walk away, or cut the price, when something they were told turns out to be uncertain. In our view, buyers price uncertainty more harshly than bad news.
The ten mistakes below are ones we see in founder-led Singapore SMEs. Each comes with the fix. Most fixes belong before launch. Three of them (judging offers on cash at completion, keeping several buyers in play, and limiting exclusivity) are decisions you make during the process: settle them with your adviser before launch, then hold to them when the offers arrive.
1. Going to market before the accounts are audit-ready
What happens: The buyer’s accountants ask for audited statements, reconciled management accounts and supporting records. If they are late, inconsistent or incomplete, diligence stops while the gaps are filled, and the buyer starts to wonder what else is missing.
The fix: Close the audit before the data room opens. In our experience, unready audited accounts are the single most common bottleneck in a sale process. Keep the records ready too: ACRA requires companies to keep accounting records for at least five years after the end of the financial year concerned, and a buyer will expect to see them.
2. A headline profit that does not survive scrutiny
What happens: Reported profit includes one-off gains, rental income, property gains or intercompany items. Once a buyer strips them out, the earnings the price was based on shrink, and so does the offer.
The fix: Build a normalised EBITDA before launch and show every adjustment. Owner add-backs, such as an above-market founder salary, only hold if that cost genuinely leaves with you. See what your business is worth.
3. “Recurring” revenue you cannot prove
What happens: The information memorandum says revenue is recurring; the data room shows invoices but no contracts, renewal history or retention figures. In our experience, unproven recurring revenue is one of the most common reasons a buyer hesitates to put in an offer at all.
The fix: Put the evidence in the data room before you claim it: contracts, renewal rates by customer group, and how long customers stay.
4. Depending on one customer
What happens: One customer is a large share of revenue, with no long-term contract. In our experience, buyers treat this as a yes-or-no risk to the whole business, and it can sharply cut the valuation multiple.
The fix: Diversify where you can, and where you cannot, secure the relationship: a longer contract, a minimum volume commitment, or evidence of many years of renewals.
5. A business that depends on the founder
What happens: Key customers, suppliers and staff deal with you personally. The buyer cannot be sure the business will keep its earnings once you leave, so it lowers the price, defers part of it, or both.
The fix: Build the team underneath you before you sell, introduce managers to key relationships, and offer a concrete transition plan with a fixed number of months and a named successor. In our experience, generic promises to “help with the handover” do not move a buyer.
6. Judging an offer by its headline
What happens: A founder accepts the highest headline number, then discovers how much is deferred, conditional or adjustable.
The deal that looks like S$8M on the headline is often S$3M on day one, with S$5M tied to targets you can’t control under a buyer you don’t trust yet.
Gwee Yi Chen, Growth Alliance Capital
The fix: Compare offers on the cash you receive at completion first, then on the risk attached to everything else. See earn-outs explained.
7. Losing confidentiality
What happens: Staff, customers or competitors hear the business is for sale before the deal is real. Staff worry, customers hedge, and competitors use it.
The fix: Non-disclosure agreements before names, staged release of information, and screened buyers only. Personal data needs care too: the Personal Data Protection Act lets a prospective buyer receive, without consent, only the employee or customer personal data necessary to decide whether to proceed with the transaction, under an agreement to use it only for purposes related to the transaction, and the data must be returned or destroyed if the deal does not proceed. In our view, the first data room, before indicative offers, should be lightly anonymised.
8. Only one buyer at the table
What happens: An unsolicited approach turns into a negotiation with a single party. With no alternative, the buyer sets the timetable and the price.
The fix: Run several qualified buyers on the same timetable. In our experience, three to five live buyers is the range that keeps competition real without losing control of confidentiality.
9. Open-ended exclusivity, then a retrade
What happens: Once a letter of intent is signed, other buyers stand down. If exclusivity has no firm end date, the chosen buyer can take its time, collect diligence “findings” and come back with a lower price. That is a retrade.
The fix: In our view, cap exclusivity at around 45 to 60 days. Disclose known issues before the letter of intent, so they are priced in. Answer diligence questions within two to three business days, and check every answer against the information memorandum and earlier answers: in our experience, a contradiction is the most common self-inflicted trigger for a retrade.
10. Housekeeping and legal surprises at the end
What happens: The deal is agreed and then slips on items nobody checked: a missing filing, a consent nobody asked for, a tax assumption that was wrong.
The fix: Check these before launch:
- Statutory registers and filings. Companies must keep a register of registrable controllers unless excused, and update it within seven days of a change (ACRA explains when that clock starts). Annual returns must be filed on time, with penalties of up to S$600 for lateness.
- Change-of-control consents. Landlords, licence holders and key customers may have to agree. Find out at the start, not the end.
- Employees in a business sale. The Ministry of Manpower notes that a transfer of assets only, or of shares, is not a transfer of employment; know which kind of sale you are running before you tell staff anything.
- GST on a business sale. For a business sale to fall outside GST as a transfer of a going concern, all the conditions must be met, including that the buyer intends to use the assets to carry on the same kind of business (it need not have been in that business before the transfer) and is, or immediately becomes, a GST-registered person.
- Tax on the gain. Singapore does not tax capital gains, but gains of an income or trading nature are taxable, and the capital or income question depends on the facts. Corporate sellers relying on section 13W need to meet its 20% holding for 24 months test and its conditions.
- Completion mechanics. Stamp duty on a share transfer is due within 14 days of signing in Singapore, and a private company share transfer only takes effect when ACRA’s register of members is updated. Appoint one person to own the completion checklist.
The common thread
A buyer doesn’t pay for what you earned. They pay for what they can confirm will continue after you leave.
Gwee Yi Chen, Growth Alliance Capital
Six of these mistakes (1 to 5 and 10) are about confirmation: numbers, revenue, customers, people and paperwork a buyer cannot confirm. Mistake 7, confidentiality, protects the business while that confirmation happens. Mistakes 6, 8 and 9 are about leverage: judging an offer on what you actually receive, keeping more than one buyer in play, and not handing over open-ended exclusivity. Competition is what makes buyers pay for what they can confirm.
If you would like these ten checked against your own business before you go to market, you can talk to us privately.
Key takeaways
- In our experience, unready audited accounts are the most common bottleneck in a sale.
- In our experience, unverifiable profit, unproven recurring revenue, customer concentration and founder dependence each cut price or kill offers.
- Keep several buyers in play, and cap exclusivity at around 45 to 60 days.
- Fast, consistent diligence answers are a strong protection against a retrade.
- Check registers, consents, GST, tax and completion filings before launch, not at signing.
This guide summarises official sources (ACRA, IRAS, MOM, Singapore Statutes Online) as at the date shown, together with Growth Alliance Capital’s own experience, labelled as such. It is not tax or legal advice. Drafted with AI assistance and checked against its sources. Questions: yichen@gacapital.com.sg or WhatsApp +65 8827 0381. Last reviewed 19 October 2026.