How to Run an M&A Process in an Election Year
Don’t let election year paralysis kill your deal. Here’s a tactical guide for founders on how to successfully navigate an M&A process when political uncertainty is high.
TL;DR: Conventional wisdom says to pause M&A during an election year, but 2024 is different. A massive tax increase is likely in 2025, creating a non-negotiable deadline. This guide provides two primary strategies: accelerate your process to close before the election, or prepare for a post-election sprint. We provide tactical checklists, timelines, and communication scripts to de-risk your deal for nervous buyers and use the tax cliff to your advantage.
Key takeaways
- The 2025 tax cliff is your single biggest lever for creating urgency.
- Your job is to de-risk the deal for nervous buyers. Be the most prepared seller.
- Run a tight, competitive process to get a signed LOI before peak uncertainty in the fall.
- Identify “all-weather” buyers whose strategic rationale transcends short-term politics.
- Model the net proceeds of a 2024 vs. 2026 sale with your tax advisor. The number will motivate you.
- Never pause your process. You either accelerate to get ahead of the election or prepare for a post-election sprint.
Stop Listening to Bad Advice
You’ve heard the conventional wisdom: don’t try to sell your company in a presidential election year. Buyers get spooked by uncertainty over tax law, regulation, and antitrust enforcement. They press pause. They wait.
That advice is lazy, and in 2024, it’s just wrong. Following it means leaving millions on the table.
Yes, M&A volume historically dips by 8-10% before a US presidential election. But this isn’t a normal year. Powerful forces are creating a complex but surprisingly favorable environment for founders who know how to play it. This is not the time to wait. It’s the time to act, with a clear-eyed strategy.
The Real Driver: The 2025 Tax Cliff
One factor overrides all others: the Tax Cuts and Jobs Act (TCJA) of 2017 expires at the end of 2025. Regardless of who wins the election, tax rates are almost certain to go up. This isn’t a vague risk; it’s a specific, quantifiable event that creates a powerful, non-negotiable deadline.
This is the most important leverage you have.
Let's make this concrete. A potential hike in the long-term capital gains tax from the current ~24% (including NIIT) to a proposed 39.6% would be catastrophic for your net proceeds.
Do The Math:
Imagine you sell your company for $50 million. - Close in 2024 (23.8% tax): Your federal tax bill is ~
1.9 million.
You take home $38.1 million. - Close in 2026 (39.6% tax): Your federal tax bill is ~
9.8 million.
You take home $30.2 million. That’s a
$7.9 million difference. It's the price of a "wait-and-see" approach. Your wealth advisor can model your specific situation, but the conclusion is unavoidable: you have a compelling, multi-million dollar reason to close a deal before tax policies change.
This isn't about politics; it's about math. You must use this deadline as a forcing function to drive your process forward.
Other Factors Reducing Uncertainty in 2024
While the tax cliff is your primary driver, two other factors make this year unique:
Continue reading the full guide
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