Deadlock to Decision: A practical alignment play for shareholder exits

Most shareholder exits don't fail because the people involved can't agree on what the numbers mean. Not that the numbers don't stack up.

You've built something together. Now someone wants out. The business has value, the mechanics are clear enough, but the conversation has stalled. One person thinks the timing is wrong. Another believes the price is unfair. Someone else is worried about what happens after. And suddenly, you're not talking about exit terms. You're talking past each other.

This is where most shareholder exits get stuck; in the lack of alignment.

The real problem with shareholder exits

The technical bits are straightforward. You get a valuation. You structure the deal. You draft the documents. Advisers can do this in their sleep.

But the human part is harder. Three or four people who have worked together for years now have competing interests. The person leaving wants maximum value and a clean break. The people staying want to protect the business and manage the cost. Everyone has a different picture of what's fair.

And what makes it worse is that these conversations happen under pressure. Someone has already mentally moved on. Others feel blindsided or betrayed. Trust is thin. Every proposal gets interpreted through a lens of suspicion. And why continue to work hard when all I’m doing is lining their pockets?

You end up in deadlock because no one can agree on what problem they're solving.

Why alignment matters more than mechanics

Most stalled exists bear similar hallmarks. The parties have done the work. They have valuations, they've reviewed the shareholder agreement (if there is one), they've talked to lawyers. But they're stuck because they're optimising for different things.

One shareholder is optimising for speed. Another for certainty. Another for cash flow. Another for reputation. Not wrong, but not compatible without a shared frame.

And this is where alignment plays come in. An alignment play isn't about finding compromise. It's about creating shared clarity on the situation you're actually in, the constraints you're actually facing, and the outcomes that actually matter.

Without this, you're negotiating in circles. With it, decisions become possible.

The four parts of a practical alignment play

I've seen enough shareholder exits to know that the ones that move forward share a pattern. They embrace the hard conversations and they structure them properly.

This is how it can work.

1. Establish the real constraints

People are, more often than not, negotiating against imaginary problems. Someone believes the business can't afford the buyout. Someone else believes the valuation method is rigged against them. Or someone thinks the tax treatment will destroy the deal.

Some, or all, of these things might be true. Or they might not. But until everyone is working from the same facts, you're stuck.

The first step is to identify the constraints. What can the business actually afford? What does the shareholder agreement actually require? What are the real tax implications? What are the genuine risks to the business if this goes badly?

You need these on the table. Not as negotiating positions, but as shared reality.

This is harder than it sounds. People resist this step because naming constraints feels like losing ground. But the opposite is true. Constraints create clarity. And clarity creates room to move.

2. Separate position from interest

Reframing people’s stories is fundamental. "What you're asking for is your position. What you actually need is your interest."

A shareholder might say they need $2 million in cash within 90 days. That's a position. Their interest might be financial security for their family, a clean break, or proof that their contribution mattered.

These are not the same thing. And crucially, interests can be met in ways that positions can't.

Maybe the business or partner can't pay $2 million in 90 days. But it can pay $1.5 million over two years with a personal guarantee. Or it can pay $1.8 million with an earnout tied to revenue. Or it can structure the deal so the tax burden is lower and the net outcome is the same.

None of this is possible if everyone is dug into their positions. But if you can get people talking about interests, options appear.

The trick really is to ask better questions. Not "what do you want?" but "what does a good outcome look like for you?" Not "how much?" but "what are you trying to solve for?"

3. Design a decision process everyone can live with

Deadlock often comes from process failure, even though it seems at face value to be from impossible demands. People can't agree because they don't know how agreement will be reached. They start out with a sense of futility.

Who has the final say? What happens if we can't agree? Are we voting, or negotiating, or deferring to an independent party? What timeline are we working to? What happens if someone misses the deadline?

These sound like administrative details but in truth they are the structure that makes decisions possible.

In one exit I worked on, the deadlock broke when we agreed on a simple rule. If the parties couldn't agree on a valuation within 30 days, they'd appoint an independent valuer and split the cost. Both sides would submit their cases. The valuer's decision would be binding.

Nothing else changed. But suddenly, both sides had an incentive to negotiate properly. Because now there was a process they trusted more than their own ability to outlast each other.

You don't need perfect consensus, but you do need a process that everyone believes is fair enough.

4. Test the agreement before you formalise it

Even if you can get over these hurdles, many exits go wrong after everyone thinks a deal has been done. The parties agree on terms. Everyone is relieved. The lawyers draft the documents. And then, three weeks later, someone gets cold feet.

Why? Because the agreement was made under pressure, without time to sit with it.

The fix is simple. Before you formalise anything, test it. Walk through what happens next. What does month one look like? What does year one look like? Who does what? What happens if the business underperforms? What happens if it overperforms?

This isn't about renegotiating. It's about stress testing. If the agreement falls apart under scrutiny, better to find out now than after the documents are signed.

I've seen deals that looked perfect on paper collapse because no one thought through the day-to-day reality of the handover. And I've seen deals that looked messy work beautifully because everyone knew exactly what they were getting into. This requires imagination, on all sides, but it is well worth the effort.

What this looks like in practice

Let me give you an example. Three partners in a professional services firm. One wants out. The other two want to buy him out, but they can't agree on price.

The problem isn't really price. It's trust. The exiting partner believes the business is undervalued. The staying partners believe he's inflating the numbers to get a better deal. Everyone is stuck.

Here's how the alignment play worked.

First, we established constraints. The firm's cash flow could support a $600,000 buyout over three years, but not upfront. The shareholder agreement required an independent valuation, but no one had commissioned one yet. The exiting partner needed liquidity within 12 months for personal reasons.

Second, we separated position from interest. The exiting partner wanted $800,000. But what he actually needed was $400,000 within a year, and confidence that he wouldn't be cheated on the rest. The staying partners wanted to pay $600,000. But what they actually needed was to protect cash flow and avoid the business being destabilised.

Third, we designed a process. Independent valuation within 45 days. If the valuation came in between $600,000 and $800,000, the partners would split the difference. If it came in outside that range, they'd revisit.

Fourth, we tested it. We walked through what the first year would look like. How the exiting partner would hand over clients. How the payment schedule would work. What would happen if a major client left.

The valuation came back at $680,000. The staying partners agreed to pay $640,000 over two years, with $400,000 in the first 12 months. The exiting partner agreed. Deal done.

Not because everyone got what they wanted, they didn’t if you use their starting positions. It worked because everyone understood what they were agreeing to, and why.

When to use this approach

This play works best in three situations.

First, when the parties are stuck but still talking. If people have stopped communicating, you've got a bigger problem. But if they're still in the room, this gives them a way forward.

Second, when the commercial terms are within reach. If one party wants $3 million and the business can afford $300,000, no alignment play will fix that. But if the gap is closeable, this helps close it.

Third, when time matters. Deadlock gets more expensive the longer it lasts. This approach moves things forward without skipping the important work.

The alternative

When you don't have and can’t get alignment, what happens? The exit drags on. Legal costs pile up. Relationships break down. The business suffers. Eventually, someone either gives in or walks away angry. Or worse, the whole thing ends up in court.

It's ugly and it's expensive and it's avoidable.

The better path is to do the alignment work upfront. Not as a nice-to-have, but as the thing that makes everything else possible.

In shareholder exits, the technical work is easy. It's the human work that matters. And if you can't align on what you're trying to achieve, nothing else will save you.