Follow This Hidden Pricing "Law" to Close Acquisition Deals

"The ‘Law of Price and Terms’ says that if I'm going to give you your [preferred] price, then you’ll accept my [preferred] terms." - Roland Frasier

When starting to negotiate acquisitions, it’s easy to make one common deal-killing mistake: Treating the price of a business as a fixed, non-negotiable number — rather than flexible.

If a seller throws out something 3-4x higher than your valuation, rather than thinking "they're delusional," or that "this deal is dead," try what Roland Frasier calls the "Law of Price and Terms" instead.

Imagine someone wants to sell a business for $1 million, but it’s only worth $100K (10X less). Maybe you could still give them their $1M asking price, as long as they’d let you pay them a dollar per year over 1 million years.

Of course, this is a ridiculous offer that no seller would agree to, but using an extreme example, it illustrates that dealmaking is about finding the right balance between a buyer and seller. Whoever demands a specific price is often the one that must offer flexibility on the deal structure.

Let’s go over some real examples:

The $9 Million Gap That Almost Wasn't

Roland recently shared a story that perfectly illustrates this principle. He was acquiring a SaaS company where the sellers wanted $13 million.

His offer? $4 million.

That's a massive $9 million gap, which is more than double his entire offer.

Most buyers would walk away immediately, but Roland closed the deal within 3 conversations.

How?

He understood that in acquisition negotiations, the price is just one variable in a complex equation, and often, it's not even the most important one…

The Onion Method of Negotiation

Here's the framework Roland uses to navigate these seemingly impossible valuation gaps:

Layer 1: The Trial Close Start simple. Present your valuation based on market multiples without extensive explanation. "Companies like this typically sell for X. How does that sound to you?"

This isn't your final offer; it's information-gathering. You're testing their reaction and flexibility.

Layer 2: Market Education If they push back (and they usually will), peel back the onion. Explain how business valuations actually work:

"I understand your concern. In the market, businesses typically sell for a multiple of their profit. Looking at comparable transactions, companies like yours sell for 2-3x EBITDA. Based on your numbers, that puts the valuation at X."

Notice you're not arguing—you're educating. You're positioning yourself as the expert who understands market reality.

Layer 3: The Magic Question This is where most negotiations get unstable stuck. But Roland uses a powerful question he learned from Chris Voss: "How can I do that?"

When a seller insists on an their price, don't argue. Ask them to help you understand how you could possibly pay what they're asking while still making the deal work.

This shifts the responsibility of justifying an unrealistic price to them, which could help them understand why it won’t work.

Turning "No" Into "Not Yet"

If the seller still won't budge on price, Roland doesn't burn bridges. Instead, he plants seeds:

"That's more than I can pay right now. But why don't you test the market? If you can get that price, that would be amazing for you. If not, let's reconnect in 60-90 days."

This accomplishes 2 things:

1. It positions you as the reasonable fallback option

2. It lets market reality do the negotiating for you

About 40% of these "dead deals" come back to life within 3-6 months, often with much more reasonable expectations.

The Critical Intelligence Question

Before you start creative structuring, you need one crucial piece of information. Roland always asks: "What are you planning to do with the money?"

This question reveals whether they:

• Need immediate cash for another investment

• Want security for retirement

• Are just testing the waters

• Have a specific financial goal in mind

A seller who "just wants a lot of money" for retirement could more flexible than one who needs $2 million in cash fast to buy their dream retirement property.

Your Next Deal: The 1-3x Rule

Roland's rule of thumb: If a seller's ask is within 1-3x of your valuation, the deal is negotiable. Don't walk away just because there's a gap.

That $9 million gap he mentioned? They closed it this way:

• $7 million simply disappeared through negotiation

• $2 million became a 5-year earnout

• The seller got close to their number (on paper)

• Roland got his price (in real cash terms)

The law of price and terms is about understanding that every deal has multiple levers: cash at closing, seller financing, earnouts, consulting agreements, employment contracts, and more.

Master these levers, and suddenly "impossible" deals become possible.

Your move: In your next negotiation, resist the urge to fixate on price alone. Ask yourself: "If I can't move on price, what terms would make this work?"

The options you discover might surprise you.

Thanks for reading Acquiring & Exiting.

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