Selling a creative agency is a milestone moment, but it’s also unfamiliar terrain for most founders. The biggest surprise for first-time sellers is that some of the most meaningful negotiation doesn’t happen in the purchase agreement or during diligence. It happens in the letter of intent — the LOI.
Negotiating the LOI is where sellers often hold the most leverage they will ever have in a deal. Once the LOI is signed, you enter exclusivity, you become emotionally connected to the deal, your team begins expecting movement, and the buyer knows you don’t have alternatives. Leverage shifts quickly and decisively toward the buyer.
Strategic buyers understand this. They’ll often encourage you to sign a simple, high-level LOI and “sort out the details later.” They’ll reassure you that the LOI is nonbinding. But “later” is when your negotiating power is weakest.
Slowing Down Without Killing Momentum
When a buyer pushes for a quick signature, acknowledge the excitement while reframing the LOI details as a thoughtful business step.
“We’re really excited about the fit here, and we want to keep moving forward. Before we step into exclusivity, it’s important to us that the LOI reflects the key terms so the rest of the process runs smoothly for both sides. I’d hate for us to spend a bunch of money on purchase agreement negotiations only to find out we didn’t discuss a deal-killer”
This tone is measured and professional. It shows the buyer you are committed, but not desperate — and that you take the LOI stage seriously.
What You Must Lock In Before You Grant Exclusivity
Exclusivity is the buyer’s biggest ask in an LOI. Once you go exclusive, you lose the bargaining power that competing offers (or even the possibility of a competing offer) can create. Because exclusivity is valuable to the buyer, you should “charge” for it by insisting the LOI capture the terms that will be painful — or impossible — to negotiate later.
The LOI should clearly describe the basic economic structure of the deal, including the purchase price, the general form of payment (cash, note), the key terms of any earn-out, and details about rollover equity. Any significant debts that need to be paid or liens released at closing should be listed along with important consents that are required to close (e.g., landlords, key contracts, banks)
You should also address the founder’s expected role in the business after the sale. This includes key terms of any employment agreement (term, base salary, bonus opportunity, PTO), what happens if the founder is terminated without Cause (typically severance of some duration) and any major restrictive covenants.
The exclusivity clause also needs attention. Agency sellers often accept long exclusivity periods without asking why. Two to three months is typical, but a shorter period may be appropriate in some situations. A short exclusivity period is how the seller can keep the pressure on the buyer to move quickly once the LOI is signed. A buyer who expects you to move fast but is unwilling to do so themselves may indicate misaligned expectations.
Reverse Diligence: Know Who You’re Committing To
Most first-time sellers don’t realize they have the right to diligence the buyer before and after signing the LOI. A strategic buyer is buying your people, your culture, your process, and your reputation. You should feel comfortable asking about their history acquiring agencies, how prior founders fared post-close, and how integration decisions are made. If the buyer is using a promissory note or equity as part of the purchase price, you need to know that the buyer is creditworthy and that the stock has meaningful value.
While you might get some of these questions answered before the LOI, you may need an express clause in the LOI confirming your ability to investigate certain of the buyer’s books and records.
The Myth of Being ‘Too Difficult’
Some sellers worry that if they negotiate the LOI, they may lose the deal. That to appear as an attractive target, the seller needs to be conciliatory and agreeable. This is a mistake. A seller can be constructive and friendly while still negotiating hard on the points that matter. Being agreeable in a desire to build friendship or to “avoid conflict” can often lead a buyer, sensing little resistance, to push for more.
The key is tone. Make your rationale visible. Tie your requests to shared goals. Use questions instead of demands. And when a buyer interprets a request as friction, steer the conversation back to mutual benefit.
“I understand you want to move quickly. I’m excited to get underway as well. I’m hoping that a little effort on the LOI will make the purchase agreement process move quickly (and hopefully more cheaply!). Can we spend a little extra time now on the LOI to get this right so we have a smoother process later?”
This is being a thoughtful transaction partner. And gives you the time and space to ensure that the terms you need are reflected in the LOI.
Conclusion
As a seller, you have your greatest leverage before the LOI is signed; so use it. Sussing out deal-killers now is much cheaper than after you’ve spent months on diligence and purchase agreement negotiations. Slow down. Ask for clarity. Lock in the key concepts. Only grant exclusivity when the foundation is solid. This isn’t being too difficult and being deliberate won’t jeopardize a deal with a credible buyer. Your efforts to improve the LOI now will pay dividends throughout the transaction.
