To de-risk carve-out acquisitions, sophisticated buyers should recommend the seller commission a sell-side Quality of Earnings (QofE) report before a preliminary bid is made. A seller's willingness to invest in a QofE signals their motivation, and the report provides a more reliable financial perimeter, reducing the risk of later surprises and renegotiations.

Before committing resources to a proof-of-concept (POC), build a preliminary ROI case. If the potential return isn't substantial enough for the customer to reallocate budget or personnel, the deal is unlikely to close. This step prevents wasting both your and your customer's time on unwinnable evaluations.

Salespeople often keep dead deals in their pipeline out of hope. To get realistic, ask a simple question for each opportunity: "If I had to bet my own money on this closing by year-end, would I?" If the answer is no, immediately remove it from the active pipeline and replace it.

Price objections don't stem from the buyer's ignorance, but from the seller's failure to establish clear economic value. Before revealing the cost, you must build a business case. If the prospect balks at the price, the fault lies with your value proposition, not their budget.

To maintain objectivity in acquisitions, Bending Spoons separates assumption-setting from model output. The team rigorously debates and locks in all inputs without seeing the projected P&L or IRR. This prevents the common bias of tweaking assumptions to justify a desired outcome. The final model output is then treated as unchangeable.

A common investor mistake is underwriting a deal that requires 15-20 different initiatives to go perfectly. A superior approach concentrates on 3-5 key value drivers, recognizing that the probability of many independent events all succeeding is mathematically negligible, thus providing a more realistic path to a strong return.

Instead of labeling a potential issue like negative cash flow as a definitive "red flag," which can be misleading, view it as a "flammable item." By itself, it may be harmless. The real danger only materializes when a "spark"—a catalyst like a new competitor or rising interest rates—is introduced.

When sourcing a carve-out proactively, the seller may not be fully committed. State Street recommends the seller commission a sell-side Quality of Earnings (QofE) report. Their willingness to invest in this serves as a strong signal of their seriousness and provides a more accurate financial baseline, reducing the risk of surprises during diligence.

Even well-intentioned sellers are motivated to close a deal and may present information in the most favorable light. This is often a human behavioral bias, not malicious lying. Acquirers must actively challenge and validate seller statements by testing assumptions and seeking external information.