The buyer wanted her engineers, not the software she had built

The situation

Drita brought us a two-page term sheet she had signed six weeks earlier, along with an email from the buyer's lawyer asking when she would be ready to sign the definitive agreement. She and Cameron, both optometrists before they built a clinical scheduling and records platform for eye-care practices, had grown the company to about a dozen engineers and a modest, growing client base of clinics across the province. This was Drita's second time selling a company; she had sold an earlier practice-management tool years before, and assumed she knew the process, which is part of why she signed without a lawyer this time.

The buyer, represented in early talks by Tyler, was a larger health technology company that had approached Drita directly rather than through a formal sale process. The pitch, as Drita understood it, was an acquisition of the platform: her clinical software, her client relationships, and the engineering team that had built it. She negotiated the headline price herself, in the thirty-to-fifty-million-dollar range depending on certain earn-out conditions, and signed the term sheet without a lawyer reviewing the underlying deal structure, treating it as a formality on the way to the real negotiation.

What the term sheet actually set out, once we read it closely, was different from what Drita believed she had agreed to. The buyer's real interest was the engineering team, not the product. The term sheet gave the buyer broad discretion to discontinue or shelve the platform after closing, while the same document tied a large share of Drita's payout to retention bonuses vesting only if named engineers, including Cameron, stayed employed for two years after closing. Drita had signed away far more control over the outcome, for both her team and her own payout, than she realized, and nothing in the two pages used the word acquihire at all.

By the time she came to us, the buyer's lawyer was already pushing toward a definitive agreement built on the term sheet's structure, with draft schedules assuming the retention mechanics were settled. Drita had not told Cameron or the rest of the team what the term sheet actually said, partly because she had not fully understood it herself, and she was increasingly uneasy about a deal where the product she had spent years building would likely disappear the day it closed, taking with it the reason she believed she had built anything worth selling in the first place.

The complication

The core problem was that Drita had already signed a document that, while not the final agreement, was not nothing either. A term sheet is usually non-binding on price and most commercial terms, but it can contain binding provisions of its own, and this one did. It included an exclusivity clause preventing Drita from talking to any other buyer for ninety days, and a provision requiring her to negotiate the definitive agreement in good faith consistent with the term sheet's structure. She could not simply walk away and start over without risking a claim that she had broken a binding commitment, and even a weak dispute would have made her radioactive to any other buyer while it was outstanding.

That mattered because the structure itself was the problem, not the numbers. An acquihire, where the real value to the buyer is the people rather than the product, is a legitimate transaction, but it needs to be documented as one, with the risks it creates for the team named rather than left implicit. This term sheet dressed the deal up as a straightforward company sale while burying the acquihire mechanics inside retention terms most sellers, and most engineers, would never think to look for. Drita's payout depended on Cameron and her team staying employed with a company none of them had chosen, doing work on a roadmap the buyer controlled entirely, with no guarantee the platform they had built would survive the first product review.

There was a second complication layered on top. Because Drita had not disclosed the retention structure to Cameron or the wider team, none of them knew their continued employment was effectively collateral for a large part of her sale price. If any of those engineers left within the two-year window, whether by choice or because the buyer restructured the team once it had what it wanted, Drita stood to lose a substantial portion of her payout, and she would be the one explaining to Cameron and the others why their jobs had quietly become part of her deal, and why she had not told them sooner.

The ninety-day exclusivity window was also closing, and it was working against Drita in two directions at once. We had limited time to renegotiate the structure before either the window expired, signalling instability to the buyer at a moment when trust mattered, or the parties moved toward signing a definitive agreement that locked the flawed structure in for good.

What we did

1. Read the term sheet for what it actually bound Drita to, separating the genuinely binding exclusivity and good-faith negotiation clauses from the non-binding price and structure terms, because Drita needed an accurate picture of what she could still change before we could plan anything else. A term sheet that says the parties intend the commercial terms to be non-binding does not make every clause in the document non-binding by default; each provision has to be read on its own wording.
2. Explained the acquihire structure in plain terms to Drita, so she understood that her payout was effectively contingent on her engineers' continued employment under someone else's direction, a risk she had not recognized when she signed. This reframed the negotiation from price alone to structure and protection, and it gave Drita language she could use herself when the time came to describe the deal honestly to her own team.
3. Opened a conversation with the buyer's lawyer about restructuring the deal rather than declaring the term sheet void, since Drita remained bound to negotiate in good faith and an outright refusal risked a dispute neither side wanted. We framed the changes as fixing ambiguity in the retention mechanics, not reopening the price both sides had already agreed, which kept the buyer at the table instead of treating the request as a renegotiation in disguise.
4. Negotiated the retention terms down to a shorter, clearly disclosed vesting period and separated a meaningful portion of Drita's payout from the engineers' continued employment entirely, so her exit was not fully hostage to decisions the buyer, not she, would make after closing. We used the buyer's own stated interest in keeping the team intact as leverage, arguing that a payout structure Drita's engineers understood and trusted served the buyer's retention goal better than one that felt punitive.
5. Added a severance protection for the engineering team, including Cameron, so that if the buyer terminated any of them without cause during the retention period, the affected employee's retention bonus vested immediately rather than being forfeited. This addressed the fairness problem Drita had been uneasy about from the start, closing the gap where an engineer could do everything the deal asked of them and still lose the payment through no fault of their own.
6. Advised Drita to disclose the actual deal structure to Cameron and the team before the definitive agreement was signed, rather than after, so no one on the team learned after the fact that their employment terms had been negotiated around them. This step was uncomfortable but avoided a much worse conversation later, once the severance and vesting terms were already fixed and the team had no real chance to weigh in before their own jobs were reshaped by someone else's transaction.
7. Rebuilt the definitive agreement's closing conditions to remove the buyer's unilateral discretion over the product roadmap from any clause tied to Drita's payment, disconnecting what the buyer chose to do with the software from what Drita was owed for selling it. This mattered because the original draft would have let the buyer's own decision to shelve the platform become the trigger for withholding part of Drita's price.
8. Documented the exclusivity and good-faith obligations Drita had already accepted, confirming to the buyer's counsel in writing that Drita intended to honour them, which removed any incentive for the buyer to treat the restructuring request as a pretext for walking away from a deal it still wanted to close on the revised terms. This written confirmation also protected Drita, since it created a clear record that she had negotiated in good faith throughout, should the buyer's cooperation later falter.
9. Reviewed the earn-out mechanics Drita had negotiated on price to confirm they were not quietly linked to the same retention conditions we were renegotiating elsewhere in the document, since a fix to one part of the agreement that left a hidden dependency in another would have solved the problem on paper without solving it in practice. We traced every cross-reference in the earn-out schedule back to its source clause to make sure none of them still pointed at the original two-year retention trigger.

The outcome

The definitive agreement closed inside the ninety-day exclusivity window, on terms that looked materially different from the original term sheet even though the headline price barely moved. Drita received the large majority of her payout at closing rather than having most of it depend on a two-year retention period she could not control. Cameron and the other engineers who joined the buyer's team did so with severance protection in place and a clear understanding, before they signed anything, of what the deal meant for them and what would happen if their roles changed after closing.

The product itself was still discontinued within a few months of closing, which was always the buyer's likely intention regardless of how the deal was structured. That outcome did not change, and Drita went into the negotiation understanding it might not, since nothing in the renegotiated terms gave her leverage over the buyer's product decisions, only over what she and her team were owed regardless of them. What changed was that the fate of the product was no longer tied to whether she got paid what she was owed, and her team's employment security no longer rested on decisions made entirely by someone else after the ink was dry.

This was a clear win on the terms that mattered to Drita: she got paid on terms she controlled, her team was protected rather than exposed, and she avoided a dispute over the binding exclusivity clause she had unknowingly signed. It came from catching a mismatch between what a seller believes a document says and what it actually says, early enough in a binding window to still fix it, and from being willing to have an uncomfortable conversation with her own team before the deal, rather than after it, forced the truth out. None of that would have been recoverable once the definitive agreement was signed on the original structure.

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