Don’t get caught in deal quicksand

Marc Snyderman
2 min readMar 1, 2023


Photo by Luca Annoni on Unsplash

Virtually every merger or acquisition deal hits quicksand.

Will you get stuck in it or find your way through?

Some people call it seller’s or buyer’s remorse — but in deal terms — it’s the moment when things just go “sideways”. Typically, this happens when the closing is approaching, and the deal becomes super real to both parties. How the parties and their attorneys handle it is the difference between a successful closing and a broken deal. Once you’ve gotten into quicksand you can’t dig in too deep, or the deal will get swallowed up and die.

One area of an acquisition transaction that always seems to trip up sellers is working capital adjustments and work-in-process (WIP). So, what’s a working capital adjustment?

It’s an adjustment of the purchase price based on the working capital of the target company or business in the merger and/or acquisition. The parties agree to the target based on the financial needs of the business post-closing and it can either increase or decrease the purchase price accordingly. It can become a real matter of contention and a quicksand moment even with a well-drafted letter of intent.

Another quicksand discussion arises around indemnities and escrow holdbacks — how much money does the seller need to have placed into escrow at closing and for how long to back up its representations and warranties about the business? While average deals have 10% of the purchase price placed in escrow to cover pre-closing liabilities for 12–18 months, some may require a greater percentage of funds to be placed in escrow for a longer period of time. This can drastically change the deal economics.

Contrary to popular belief, humans can’t drown in quicksand — it’s physically impossible due to density. So, your deal won’t die in quicksand either.

How? Don’t get caught up in the quicksand while heading towards closing — stay rational, remove the emotion, and remember why the deal is so important for buyer and seller and get to the closing. If you can do that, you’ll get out of the quicksand quickly without needing to grab a snake to pull you out like Indiana Jones.



Marc Snyderman

dad, company exec, lawyer, social media novice, frequent advice giver and sometimes taker