Buyer vetting & strategic counter-diligence — the three-layer audit.

Layer 1 — Funding source verification (all archetypes)

PE/Hybrid: request an Equity Commitment Letter from the fund showing committed-and-uncalled capital. Verify fund vintage — funds in Year 5+ of a 7-year life carry exit pressure that shows up as aggressive cost-cutting post-close. Demand the current platform Debt-to-EBITDA ratio. Above 6× signals constrained earnout capacity.

Strategic: request a balance-sheet snapshot showing cash on hand or a revolving credit facility with substantial headroom. Confirm the acquisition is funded from operating cash, not a one-off financing event.

Individual: request personal financial statements plus proof of the 10–20% down payment in a liquid account. SBA 7(a) loans cap at $5M and require a DSCR of 1.15×–1.25× on the agency's cash flow — if the agency cannot support this, the bank kills the deal regardless of intent.

Documentation gate: commitment letter, balance-sheet snapshot, or personal financial statement in hand before exclusivity discussions begin.

Layer 2 — Operational credibility verification

Written 90-Day Integration Plan — required from all archetypes before LOI signature. Must specify communication timelines, benefits transition, AMS migration timing, named individuals responsible for each workstream. "We'll figure it out together" is a red flag for integration chaos.

Staff retention data — request 24-month staff retention rates across the buyer's last 5 acquisitions. Target benchmark: above 80% for PE/Hybrid, above 85% for Strategic, above 90% for Individual. Below 70% signals slash-and-burn integration.

Named Integration Team — specific individuals with titles, experience, and contact information, introduced pre-close via video call. Generic "our ops team will help" is bait-and-switch risk.

Documentation gate: written 90-day plan plus three named team members on calendar holds for pre-close intros.

Layer 3a — PE/Hybrid-specific protections

Platform-vs-add-on disclosure — clarify whether the agency will be a platform anchor or an add-on rolled into an existing platform. Platform agencies retain branding and autonomy; add-ons lose both and integrate into a larger entity. The Platform Premium (typical 12–19× kill-zone for platform acquisitions per the readiness model) reflects this distinction.

Fund vintage transparency — if the fund is past Year 5, model the deal under the assumption of fast exit pressure in Year 2–3. Negotiate Equitable Adjustment clauses that protect earnout targets if the buyer mandates disruptive operational changes mid-period.

Restricted Payment covenant carve-out — request senior credit facility documentation showing whether earnout payments are explicitly carved out from restricted-payment covenants. If the buyer's platform leverage breaches the covenant cap, your earnout is legally blocked even if your performance hits target.

Layer 3b — Strategic-buyer-specific protections

Shadow Revenue Clause — non-negotiable for Strategic deals. Sellers who refer clients into the buyer's specialized divisions (Cyber, Benefits, Surety) without this clause see that revenue booked to the buyer's P&L and excluded from earnout calculation. The Attribution Trap can wipe out 20–30% of expected earnout value.

Synergy Premium reality-check — Strategic buyers pay competitive-into-kill-zone multiples (12–16× per the readiness model) because they can eliminate 30–40% of back-office costs through consolidation. That cost-cutting falls on your team. Negotiate Staff Protection Covenants defining Essential Roles that cannot be eliminated without buyer obligation to retain replacement headcount.

AMS migration deferral — Strategic buyers typically mandate migration to their proprietary system within 60–90 days. Negotiate a minimum 90-day deferral plus phased migration to prevent operational paralysis during the earnout period.

Layer 3c — Individual-buyer-specific protections

SBA 7(a) financing path — confirm the buyer has pre-qualification from a Preferred Lender Program (PLP) lender with the loan amount documented. Pre-qualification is still contingent financing, not committed capital. Apply a 20–30% closing-risk discount to the nominal offer.

Seller Note Standby — Individual buyers using SBA financing typically require a 24-month seller note standby period (no payments) to pass the bank's DSCR stress test. Model this into your cash-flow expectations from day one.

Founder dependency scope — Individual buyers typically need 12–24 months of post-close transition support. Define warm-handoff scope explicitly: hours per week, scope of responsibility, communication cadence, and explicit end date. Vague support obligations become indefinite obligations.