Deal Fatigue
The exhausting grind of due diligence that wears sellers down and erodes their leverage as a deal drags toward close.
What Deal Fatigue Is
Deal fatigue is the slow erosion of a seller's energy, focus, and resolve during the long stretch between a signed offer and the closing table. By the time due diligence begins, the seller has usually been running the company full-time while also answering an endless stream of document requests, questions, and clarifications. The emotional high of the initial offer fades, and what is left is grind. McDannell frames it bluntly as the cost of the diligence phase.
"The exhausting due-diligence grind wears sellers down and makes them vulnerable to caving on price."
McDannell, Get Acquired, ch. 7
Warrillow treats it as the negative pole of deal momentum: every transaction has a tempo, and when that tempo stalls, fatigue sets in on both sides.
"Momentum is the forward tempo of a transaction; fatigue is when both sides tire and question the deal."
Warrillow, The Art of Selling Your Business, ch. 3
Why It Erodes Leverage
Fatigue is dangerous because it changes how the seller values the deal. After months of disruption, the original price matters less than simply being done. A worn-down seller will accept terms they would have rejected at the start, which is exactly the vulnerability a patient or opportunistic buyer can exploit. This is the bridge from fatigue to retrading: a buyer who senses exhaustion can lower price or harden terms near close, and the tired seller caves rather than walk. McDannell's rule of thumb is that delay itself is the enemy.
"Urgency and momentum protect the transaction; drag invites retrades and fallout."
McDannell, Get Acquired, ch. 7
The risk compounds in a proprietary deal with a single buyer, where there is no competing bid to refresh the seller's resolve. As Warrillow notes, single-buyer negotiations invite "dragged-out diligence, and end-stage price cuts."
How to Prevent It
Both authors locate the cure before the grind ever starts: do the buyer's work in advance so diligence is fast and confirmatory rather than exploratory. Warrillow's pre-diligence package assembles the information an acquirer will need before going to market, and the principle is to "do your acquirer's due diligence for them." Fumbled or slow information requests, by contrast, "bleed buyer enthusiasm and risk 'deal fatigue.'"
McDannell echoes this: have financials, tax returns, bank statements, SOPs, and IP organized before diligence opens, so the buyer's checklist can be answered quickly rather than triggering a new scramble each week. Speed is protection. The shorter the gap between offer and close, the less room fatigue has to set in and the less leverage the seller surrenders.
A second defense is structural: declare at the LOI stage that retrading is not an option, so a tired seller is not later confronted with a fresh price negotiation precisely when they are least able to resist it.
Further Reading
Sources: McDannell, Get Acquired ch.7; Warrillow, The Art of Selling Your Business ch.3.