I’m Michelle Regner, founder of Business Brokers of America. I help business owners navigate every step of the sale—from organizing financials to negotiating the right deal—so they feel supported, informed, and in control. My mission is simple: to make sure you exit on your terms—with confidence, clean financials, and a strategy that protects what you’ve built.
Everything looked perfect… until the buyer vanished. The LOI was signed. Everyone was optimistic. And then—radio silence.
If you’ve sold a business (or even come close), you know the Letter of Intent (LOI) moment feels like a handshake and a promise. But for sellers, it can also be a false sense of security.
At Business Brokers of America, I’ve seen more than a few deals die after the LOI. Not because the numbers didn’t add up. Not because due diligence uncovered something catastrophic. But because of reasons no one could have predicted.
And here’s the thing: this isn’t rare. It happens more often than most sellers realize.
What is a Letter of Intent?
A Letter of Intent (LOI) is a non-binding agreement that outlines a buyer’s intention to purchase a business. It lays out preliminary deal terms: price, structure (asset vs. stock), timeline, and contingencies.
But here’s the catch—it’s not binding. It’s more of a mutual “we’re serious” than a legally enforceable contract.
“I don’t celebrate just yet with an LOI. We still have a way to go with getting to the finish line, and the LOIs are a handshake in the right direction—but also non-binding.”
Can a buyer back out after signing an LOI?
Yes. And they often do.
While certain clauses in an LOI—like confidentiality or exclusivity—may be enforceable, most of the agreement is not. That means a buyer can walk, and the seller typically has no legal recourse. Which is why sellers need more than a signature—they need a strategy.
“I’d say 50% of buyers back out. That’s why we never celebrate until the deal is signed and funded.”
6 strange (but real) reasons buyers have backed out post-LOI
1. “I didn’t like his handshake”
1. “I didn’t like his handshake”Chemistry isn’t everything… but sometimes, it’s enough to tank a deal.
Yes, really. I’ve had a client tell me, mid-meeting, “Michelle, I didn’t like his handshake. Did you see that? Did you see the way that that was odd?” Another ghosted because they “didn’t feel his energy. He’s so dull on the phone.”
2. The spouse said no
Sometimes it’s not the buyer making the call. I once worked with a husband-wife duo where the husband was enthusiastic about the buyer… and the wife flat-out refused—based on a gut feeling.
“She was like, ‘Nope. Didn’t like him. We’re not selling the business to him.’ And couldn’t really give me a real reason.”
In one case, we coached the seller to step forward as the single point of contact, reducing friction and getting the deal back on track.
3. “My astrologer told me not to buy the business”
Yes. This happened. I had to ask the buyer to repeat himself. But he was serious—and walked away from the deal because the stars didn’t align.
“I thought he was joking. I didn’t know what to say. But he walked.”
4. “I just couldn’t picture myself in the space”
Smells, decor, layout—irrational as it sounds, this happens.
One buyer bailed after visiting the site. “I’ve had a buyer tell me once that he couldn’t picture himself at the business once we actually visited the business together versus online and conversations.”
5. Emotional curveballs
Deals fall apart for emotional reasons all the time—family deaths, dreams about buyers, gut feelings about the business, or sellers getting cold feet.
“Time kills deals… so the faster you can get a deal done and streamline the process for everyone is a win for my client and for us as a company.”
6. A seller says too much
Sometimes the seller derails the deal. I’ve had to coach clients to avoid oversharing—or cussing out buyers on a call.
“I’ve had a client where he just… I could never get a word in. So I had to kind of prep him prior to the call.”
What usually goes wrong (that’s not so weird)
Not every back-out is quirky. Common reasons buyers back out include:
- Financing falls through
- Red flags in due diligence
- Business is overly dependent on the owner
- Lack of operational documentation
- Customer concentration risk
And sometimes? The CIM (Confidential Information Memorandum) does its job.
“Some buyers vanish after reading the 30-page CIM—and that’s fine.”
If the SIM weeds out the wrong buyers early, it saves everyone time. Quality over quantity matters.
How to protect yourself from a last-minute backout
While you can’t control gut feelings or cosmic advice, you can control how you structure the process:
- Vet buyers early and thoroughly. Don’t fall in love with an LOI before you know who you’re dealing with.
- Include breakup clauses. Even non-binding LOIs can set expectations.
- Keep momentum moving. Long delays create friction and doubt.
- Follow up after walkaways. “I always follow up if a buyer backs out. Sometimes it’s a misunderstanding. Sometimes it’s inexperience. I’ve rescued more than one deal just by asking the right questions.” And even if it’s a hard no, the feedback helps us reposition the business and improve the next conversation.
Bonus: Red flags that might tip you off early
Some buyers drop clues from the start:
- They’re in a competing space and overly focused on your marketing.
- They promise cash… but later mention needing to raise funds.
- They talk about replacing your entire team before the ink dries.
If any of this happens, it may be time to hit pause.
Final thoughts: Expect the unexpected
Even with the right buyer, things can go sideways. Emotions run high. Spouses weigh in. Life gets in the way. Sometimes Mercury is in retrograde.
But here’s the good news: with the right broker in your corner, you don’t have to manage it all alone.
At Business Brokers of America, we’ve seen it all—and we know how to keep your deal moving, even when things get weird.
Thinking about selling? Start with our free valuation tool or reach out to our team to talk next steps.
Michelle Regner is a powerhouse entrepreneur and business strategist with a proven track record of founding and successfully exiting three SaaS technology companies. As the Founder and CEO of Business Brokers of America, she’s on a mission to elevate business brokerage standards nationwide, also serving as President and Managing Partner at Business Brokers of Utah.
Drawing on her firsthand experience launching and scaling startups, Michelle offers unparalleled insight into the realities of small business ownership. She specializes in advising entrepreneurs on growth strategies, exit planning, and digital transformation, having coached dozens to leverage digital marketing, overcome obstacles, and build scalable operational systems.
A Silicon Valley native, Michelle’s entrepreneurial journey began after earning her B.A. in Business from Notre Dame de Namur University and a stint at Morgan Stanley. Her impact quickly gained national recognition, leading to features in Fast Company and being named one of the top business leaders by The Economist in 2014. She’s also a sought-after speaker and previously hosted a five-year podcast series.
