March 5, 2026
Key Person Risk in M&A: What to Know
Key person risk is one of the most common issues uncovered during M&A due diligence, especially in founder-led small businesses. When revenue, relationships, or operational knowledge are concentrated in one individual, buyers often discount valuation or structure deals with earnouts, consulting agreements, or retention incentives to protect against disruption. The strongest businesses reduce this risk by building leadership depth, documenting processes, and ensuring customers and systems are tied to the company—not a single person.
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