After working on hundreds of transactions with entrepreneurs, Matthew Katz has seen the same pattern repeat itself: Deals rarely fail for one dramatic reason, instead, they wear down under pressure. In this conversation, Matt explains the three most common sources of friction he encounters, (below forecast trading, poor information, and founder pressure), and what sellers can do to keep control when it matters most.

Q: Matt, you’ve worked on a huge number of deals. Why focus on friction?

Matt: Motives for exit vary, businesses differ, markets change, but in transaction after transaction, the same three things cause stress, doubt and, in the worst cases, failure. These three things create friction and frustration, and that quietly kills value.

Two of them – poor information and founder pressure – are largely avoidable. Below forecast trading, however, is a lot harder to overcome.

Q: What’s the number‑one issue that derails otherwise good processes?

Matt: Trading coming in below forecast during the live deal. It might be losing a key client, or the guaranteed Q1 project slipping. Under the microscope of a transaction, those hits are amplified and can reduce value or even derail the deal completely. Often, there’s nothing a business owner could have done, yet the result is the same.

Q: If some shocks are outside your control, where can sellers influence the outcome?

Matt: Sometimes, we’ve seen the damage is self‑inflicted by optimism in the forecast, especially in a challenging economy. You can mitigate that risk by being appropriately prudent up front. You’re selling the business, so don’t underestimate its worth, but be modestly realistic. That alone reduces the chance that in‑process trading fluctuations create avoidable problems.

And, I’d recommend having clear levers: what actions can you credibly take if something slips? Price, pipeline conversion, cost control? Prospective buyers don’t need perfection; but they do need to see you can stay in control.

Q: You mention poor information being another challenge for founders. I assume these issues can crop up in the diligence process?

Matt: Many teams say they’re “deal ready” until diligence starts. We hear it constantly: “We’re ready”, “We have everything”, “Our numbers are clean.” And that’s not exclusive to businesses of a certain size – we hear it across the board. Then the data room opens, and the story changes: “Actually… it’s not so easy to pull that” and “Most numbers are clean except for…”.

That’s when the cycle starts: follow‑ups, delays, creeping doubt. The FDD team will do their job: they’ll dig. They want to understand the numbers and they want timely, proper answers. If you can’t respond well and quickly, friction builds and, especially in larger businesses, the message buyers hear is: If control over the numbers is inconsistent, what else might be?

Q: How can founders prepare for this?

Matt: We’ve learnt to be uncompromisingly direct with our clients to be absolutely sure that they are ready.

Q: You've previously said that everything becomes personal once a deal is live. What do you see founders go through during the process?

Matt: I may work in “corporate” finance, but in practice everything is “personal”. Entrepreneurs go from a world where they have complete control, to what can feel like a swamp of advisors. Progress suddenly seems painfully slow. On the other side, buyers who felt fair, even generous, in the early meetings can suddenly feel like your opponent, focused on driving down the price and pushing for legal terms that feel unreasonable or burdensome.

Under that pressure, tiny issues can become points of principle. I warn clients up front: there will come a moment where deal stress gets to you. Nearly everyone says they’re fine, but reality, it’s very rare to stay cool throughout. That’s normal. The key is not to let that moment define the deal.

Q: If a founder remembers only one rule before speaking to buyers, what should it be?

Matt: Be realistic before you’re optimistic. Own your numbers and your story, and you’ll keep value on the table – even when the unexpected happens.