The Silent Deal Trap

TLDR: Some sellers want to keep their company’s current profits even after you buy control, which sounds harmless but creates hidden incentives that push them to protect their own unit instead of supporting the whole platform. This move leads to expense games, blocked integrations, and stalled value creation. The fix is simple. Use strong reporting, one chart of accounts, shared services, group level KPIs, clear governance, and a smarter payout structure so everyone wins only when the HoldCo wins.

The Trap That Looks Safe But Isn’t

Some deals look simple on paper.

A seller wants to keep the profits their company already makes every year while you take control through your HoldCo.

They keep the two million of EBITDA. You grow the platform.

It sounds balanced, but it often blocks the growth you were planning on.

Why Incentives Break the Deal, The Problems That Show Up Fast

If the seller is paid based only on their own local EBITDA, they start caring only about that number.

Their choices shift. They ignore the bigger picture. This is not usually bad intent. It is the natural pull of incentives.

Sellers may start placing questionable expenses into shared accounts. They might time revenue in unusual ways.

They resist tools and systems that could help the platform because short term profit dips hurt them.

They shift pricing to favor high margin local products even if the HoldCo needs something different. They hold on to their best people to protect their unit instead of sharing talent across the group.

How You Fix the Misalignment

The solution is not to avoid these deals.

The solution is to build real alignment and give yourself clear visibility. You begin with strong information rights.

You require monthly reports, full close packs, clear explanations for variances, and unified close deadlines across every company so you always see what is happening.

You also need a single chart of accounts.

This removes gray zones and stops creative labeling. You attach an add backs sheet right in the agreement so nobody debates what counts.

Shared Services That Keep Everyone Honest

Next, you create a shared services menu for Finance, RevOps, IT, HR, and Data.

You charge each company a fixed amount plus a small variable based on headcount and revenue.

Everyone contributes and no one skips the platform if they benefit from it.

KPIs That Align the Whole Group

This is where the list fits best. These are group level KPIs that help pull the seller toward HoldCo value instead of local profit.

• Net revenue retention

• Contribution margin after platform fees

• Cash conversion cycle

• Cross sell attach rate

• Integration milestones

• Data quality targets

A portion of the seller’s payout should depend on these, because they measure what actually grows value at the top.

Control That Protects the Platform

You also need governance.

You hold approval rights on key hires, pricing shifts, channel changes, capex, and long term vendor contracts. You follow an integration plan with clear goals for day zero, day thirty, day sixty, and day ninety.

This prevents drift.

Simple Deal Tweaks That Change Everything

There are easy structural fixes too.

Blend their retained profit with a HoldCo value kicker. Reduce the retained share over two to three years.

Add a collar that adjusts payouts when the unit and the group move in different directions.

Cap one time expenses and discretionary spending so no one abuses those categories.

A Checklist You Use Every Time

The final step is to use a one page checklist.

1. You define exactly what retained EBITDA includes.

2. You attach a reporting template.

3. You attach the chart of accounts and add backs sheet.

4. You attach the shared services formula.

5. You attach the KPI table.

6. You attach the governance list.

7. You attach the payout schedule and audit rights.

Everyone then plays on one clear scoreboard.

The Result You Actually Want

Once you do all of this, the risk drops almost to zero. You get alignment. You get clean reporting. You get real HoldCo value instead of silo drama.

P.S. Special Announcement

After 5 years of teaching entrepreneurs how to build, buy, and sell companies, I'm retiring all Epic courses and educational content permanently.

This isn't because they didn't work, thousands have built real wealth with these frameworks, but because AI, capital markets, and collaboration have changed the game. I'm shifting from teaching deals to doing deals. Want access to everything before it disappears forever?

This is your last chance to grab 5 years of proven frameworks, strategies, and training materials before they're gone for good. See the full story and whats going into the vault here: Go to the vault

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