Ad Altius Advisors | Placing the Baby: The Art and Science of Matchmaking in M&A Deals

By Thomas Brown | In the world of M&A, certain transactions transcend financial calculus, reaching into the realm of legacy. For sellers whose primary concern is not just how much, but who, the M&A process becomes a distinct art of matchmaking. This is “placing the baby”—a phrase that captures both the responsibility and the deep-seated significance of entrusting a business’s future to the right people. In these deals, we’re not merely managing assets; we’re safeguarding something built with purpose and care over decades. These transactions require not just financial acumen but a refined understanding of psychology, purpose, and human connection. This is a delicate business of matchmaking, where values must align, and where both the financial and cultural value of an asset must not only be preserved but also enhanced.

The Psychology Behind Entrusting a Legacy

When sellers consider divestiture, especially for an asset they’ve nurtured for years, the psychology involved is complex and nuanced. Behavioral science shows us that when people invest significant time and emotion into building something—a phenomenon psychologists call the endowment effect—they value it beyond any outsider’s perception. In M&A, this principle often emerges among owners who’ve weathered highs and lows with their business, leaving them attached in ways that go beyond sentimentality. It’s a deeply ingrained value, woven into the very fabric of their lives, and should be treated as such in any respectful negotiation.

In these transactions, handing over the business is akin to passing a torch. But the torchbearer needs careful selection—someone with the capability to honor and extend the vision. This mirrors the psychological dynamic of parental attachment: just as a parent seeks the best for their child, these sellers want a buyer who will bring stewardship, empathy, and vision to both the business and its people. For these sellers, a deal is only successful when it meets this human criterion, aligning at the deepest levels.

Matchmaking for the Right Buyer

The question then becomes: how do you find the right buyer? And what does “right” mean when it involves not only achieving maximum financial value but also preserving intangible value? For our firm, value is defined not solely by price, but also by the compatibility that secures an asset’s continuity, culture, and performance. Goodness of fit may seem like a “soft” consideration, yet it has tangible financial implications—especially in earn-outs and deal structures where long-term success is measured. When buyer and seller align well, continuity flows naturally, and so does performance. Value, for both parties, follows.

Finding this “right” buyer begins with ruling out candidates who may check all the financial boxes but lack the depth or sensitivity required to truly steward the business forward. For these sellers, not everyone is qualified to be a “parent” to their legacy. The process requires discernment, seeking those rare buyers who bring not only business acumen but a sense of responsibility for the people and culture they’re inheriting. We examine the motivations, values, and history of potential buyers, asking ourselves: Is this someone who sees the value beyond the balance sheet? Will they nurture, rather than merely manage?

Consider some recent examples from our practice. In one, a founder who spent his life building an exceptionally valuable business faced retirement without an heir to take over. His primary concern wasn’t just the payout but ensuring that his employees—who were, in essence, his family—were left in good hands. For this seller, the buyer was inheriting not only the asset but also a network, culture, and way of working that embodied the founder’s legacy more fully than any set of protocols could.

In another, a surviving spouse had co-founded a successful business with their partner, who had passed away unexpectedly. Left with a business carrying the weight of memory, this seller wasn’t simply transferring ownership. They sought someone who could carry forward their spouse’s legacy. The buyer here was stepping into a narrative interwoven with history, values, and expectations—a role that required sensitivity and stewardship.

In both cases, the need to “place the baby” was paramount. Sellers in these situations seek a buyer whose psychological compatibility transcends financial prowess alone. They want a steward who will not only respect but ideally enhance the business culture and values instilled from inception.

Building the Structure Around the People

Identifying the right buyer is only the beginning; structuring the deal is where alignment becomes real. These transactions aren’t simply about setting terms; the structure must support the transition in a way that preserves the asset’s integrity and maximizes its value at the point of sale and beyond.

For the surviving spouse, we structured a legacy advisory role that incorporated specific cultural elements. This allowed the seller to remain in an honorary position, shaping the business’s future in ways that kept the spouse’s influence alive. For the founder nearing retirement, our strategy illuminated for both seller and buyer that continuity for key employees was essential for the business, and structurally ensured this would be so. We also defined cultural standards, which were safeguarded contractually. Far from conventional clauses, these bespoke terms align value maximization with legacy continuity, supporting a seamless transition that secures the asset’s future in a way standard structures might overlook.

These arrangements require a particular skill set—an ability to shape agreements that convey a shared promise of preservation and growth. The relationship between seller and buyer becomes symbiotic; by choosing each other, they commit to a shared future in which legacy and value reinforce each other in a way that feels both intuitive and strategic.

The Neuroscience of Trust in High-Stakes Transactions

At the core of these transactions lies a critical factor: trust. Neuroscience tells us that trust activates specific pathways in the brain—particularly regions related to reward processing, such as the striatum and medial prefrontal cortex. Trust, when genuine, feels good. This “feel good” effect isn’t incidental; it’s predictive. When structured well, trust builds naturally and becomes a reliable predictor of deal success.

But the “feel good” element of trust must be grounded in reality. Trust isn’t just a pleasant sensation; I define it as a grounded assessment that the other party holds your concerns. Conversations and deal structures need to provide data-driven evidence that both parties are aligned, and from this alignment emerges trust that is genuine and well-founded. Evolution has, quite literally, designed us this way: trust feels rewarding when we correctly perceive shared values and intentions, setting the stage for a positive, durable relationship.

Creating this bond in M&A means going beyond transactional promises and building in mechanisms that reveal a buyer’s commitment to the seller’s legacy. That’s why we emphasize both formal and informal meetings, candid conversations, and multiple site visits “where potential buyers experience the culture firsthand. These are data points that provide sellers with the reassurance that they’re entrusting their legacy to the right people, forming the basis of a relationship that feels good, because it should.

Why All Deals Could Benefit from a “Place the Baby” Mentality

As professionals in this specialized realm of M&A, we know “placing the baby” deals aren’t the standard approach—though they should be. While many M&A transactions prioritize financial return, sometimes at the expense of a company’s culture or employee well-being, we hold a different ethic: In every transaction, there exists an intrinsic value in matching the asset with the right buyer, someone whose vision and values align to maximize not only financial but also human and cultural outcomes.

Imagine if every deal considered buyer-seller compatibility on a human level, where transactions were approached not just as acquisitions but as handovers of communities, legacies, even families. Fewer cases of buyer’s remorse would arise; fewer sellers would feel regret. Companies would thrive post-acquisition, having been carefully entrusted to those who understood their core essence from the outset.

Not every deal may carry the weight of a “place the baby” transaction, but the approach itself holds universal value. When M&A professionals take the time to understand a legacy, to match the right buyers to the right assets based on values as well as numbers, they build transactions with longevity and resilience. Isn’t that what we all ultimately want? Not just a deal that closes, but one that endures.

Compliments of Ad Altius Advisors – a member of the EACCNY