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Episode Summary
An unsolicited term sheet lands in your inbox from someone you already know, and every banker you’ve ever met would tell you to hire them, run a process, maximize the outcome. David didn’t. He ran the entire $34.5M sale of Dream Water himself as lead negotiator, lead legal (he’s a bar-certified attorney), and lead diligence. In Part 2 of this conversation, he walked me through exactly how he engineered the deal. He built Plan A (sale) and Plan B (licensing arrangement) directly into the term sheet so the deal physically couldn’t die. He charged the buyer $100K every time they asked for another month, walking away with over $400K of free-and-clear cash before the deal ever closed. He kept the entire transaction secret from his employees so nobody checked out. And he negotiated a discretionary thank-you pool inside the purchase agreement so he could hand every employee, advisor, and contractor a letter and roughly a year of salary on the day the wire hit. I laughed through most of this. David also challenged me on how much weight I put on the academic side, and he’s right: the technical knowledge gives you the confidence to ask the right questions, but the deal gets done by listening and knowing what the other side actually needs.
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## Top 10 Takeaways- The deal gets done by listening for what the buyer actually needs, not by negotiating for what you want.
- Negotiate everything you care about into the term sheet, so the purchase agreement is just papering it.
- Build Plan B into your term sheet so the deal physically can’t die on you.
- Charge the buyer for due diligence upfront. Until they write a check, they have no skin in the game.
- If the buyer needs more time, sell them more time. Each extension is real money in your pocket.
- Keep the transaction secret from your team until you know it’s closing. A distracted company is a slipping deal.
- Build your data room before you need it. Speed and transparency in diligence set the tone for the whole deal.
- Your reps, warranties, and indemnification are where deals get redone after close. Negotiate them down or away.
- It isn’t done until the wire hits, and one offhand joke at midnight can almost cost you everything.
- Reserve a discretionary thank-you pool inside the purchase agreement so you can pay forward what your team built with you.
Sound Bites
“I don’t negotiate with this idea that I’m gonna get you. I’m gonna win. I’m very clear on the fact that I have to make sure that I’m meeting your needs. And you’re oftentimes not gonna tell me what those are. I have to get that out of you.” (@TBD) — David Lekach
“It ain’t done until it’s done. And if you have extended reps and warranties and indemnifications, which is very standard in a lot of these deals, it ain’t done until that expires.” (@TBD) — David Lekach
“Everybody’s like, oh, I’m spending money on my own attorneys, I’m spending money on. Yeah. But until they write a check to you, they don’t have skin in the game.” (@TBD) — Ryan Tansom
“My goal for everybody was simply to just be better off for having had the Dream Water journey and experience in their lives than not. I needed to say thank you. And I would have done it out of my own money if I didn’t have it, because I needed to do that for me.” (@TBD) — David Lekach
About This Episode
David Lekach is the founder of Dream Water, which he sold for $34.5M to a publicly-traded Canadian cannabis company in 2018. He holds a JD and has an investment banking background, which let him serve as his own lead negotiator, lead legal, and lead diligence on the deal. This is Part 2 of Ryan’s conversation with David. Part 1 covered how he built Dream Water from launch into Walmart, CVS, Walgreens, Target, and Publix. Part 2 walks through the deal mechanics: term sheet engineering, charging for due diligence, structuring around buyer constraints, and the emotional reality of the close.
Resources Mentioned
- David Lekach — Email: david.lekach@gmail.com. Instagram: @david.lekach
- Dream Water — David’s sleep beverage brand, sold for $34.5M in 2018.
- Harvest One — The publicly-traded Canadian cannabis company that acquired Dream Water.
- Entrepreneurs Organization (EO) — Peer forum David credits with carrying him through the deal.
- Finish Big by Bo Burlingham — Referenced as the book that triggered Ryan’s own work on intentional exits.
- Never Split the Difference by Chris Voss — Referenced for negotiation through listening and questions.
- Arkona Intentional Growth Digital Course — arkona.io
Connections
Phase + Module:
- Module 9 — Operator Transition — The transition module where exit mechanics live
- Module 1 — Ownership Goals — Why David was clear on what mattered (cash component, gratitude pool) and what didn’t (his own employment terms)
Milestones:
- Milestone 6 — Transaction Value — Cash vs. stock split, reps and warranties, deal structure
- Milestone 25 — Operator Transition Plan — Planning the close and the post-close communication arc
- Milestone 27 — Integrate & Pass the Baton — Telling the team, the thank-you letters, the handoff
Concepts referenced:
- Enterprise Value vs. Equity Value — What David was actually selling (stock sale, not asset sale)
- Three Lenses of Value — Strategic acquirer pricing vs. financial buyer pricing
- The Owner-Operator Trap™ — Why David’s preparation discipline kept him out of it through the close
Related episodes:
- Ep. 280 — David Lekach Sells Dream Water for $34.5 Million (Part 1) — How he built Dream Water into the big-box channel before the exit