Phase three of four
Select the right buyer
Selecting a buyer means comparing the offers on six terms, not the headline: cash at close, the structure of the rest, the earn-out, rollover equity, financing and certainty, and the buyer's record. In phase three, the shortlist meets you, sharpens its offers, and one letter of intent is signed.
Signing to the wire: seven to twelve months. Every time given here is an estimate drawn from past engagements, not a commitment. Each sale runs on its own calendar, set by how ready and how complex the company is, by the buyers and their lenders, and by the lawyers on both sides. We set a calendar with you at kickoff and revisit it as the process moves. The sale, phase by phase
What you are choosing
How do you compare letters of intent?
On six terms, not the headline: cash at close, the structure of the rest, the earn-out, rollover equity, financing and certainty, and the buyer's record. Two offers with the same headline can differ by millions in what you keep, and the difference is structure, timing, certainty, and what the buyer does with the business after you hand it over.
Cash at close
What reaches your account on the day the deal closes, after debt, fees, and adjustments. Ask for the figure after every deduction, in writing.
The structure of the rest
Notes, deferred payments, and escrow are all money you do not yet have. Ask when each part is paid, what secures it, and what can reduce it.
The earn-out
An earn-out you cannot control is a price cut with extra steps. Ask who runs the business, the costs, and the accounting behind the target once the deal closes.
Rollover equity
Rolling part of your stake into the buyer's company is a second bite, and also a second risk. Ask what you own, what you can sell, and when.
Financing and certainty
An offer is only as good as the money behind it. Ask where the funds come from, what conditions apply, and what the buyer has to line up before closing.
The buyer's record
Ask how they treated the people and the terms of the last three businesses they bought, then call the founders who sold to them.
How deals are shaped
How can the sale of a business be structured?
Five ways: all cash at close, equity rolled into the buyer's company, a platform or an add-on, a price paid over time, and a family succession. How the price is paid, and what you keep doing after the sale, weigh as much as the price itself, and each shape here comes with a sale members of the FNDRS M&A team have advised on.
All cash at close
The buyer pays for the whole company at closing, with no earn-out and no financing condition. You trade any share of the future for certainty now, and usually stay on for a set transition.
The tradeCertainty now, and no second sale later.
Equity rolled into the buyer's company
You take most of the price in cash and reinvest a share in the buyer's company, so you own part of what it builds next. When that company is sold again, the share you kept is sold with it.
The tradeA second sale that may be worth more or less than the first, and a minority stake until then.
A platform, or an add-on
A private equity firm may buy your company as its first in a sector, a platform it builds on with more acquisitions, or as an add-on to a platform it already owns. A platform needs leadership that stays; an add-on is folded into a business that already runs.
The tradeA platform usually wants you to stay and build. An add-on usually needs you less.
A price paid over time
Part of the price can be paid later: an earn-out tied to results after the sale, or staged payments tied to milestones. It can bridge the gap between what you ask and what a buyer will pay today.
The tradeA higher headline, with part of it at risk.
A deal shaped this wayA family succession
When the ownership spans generations or countries, it has to be made simple before a buyer can buy it: the holdings consolidated and the estate questions resolved, with the family's own advisors.
The tradeWork before launch that makes the sale possible at all.
A deal shaped this way
Every structure has tax and legal consequences that are personal to you. Your CPA and attorney advise on those.
What buyers find
Buyers find what you have not fixed
The buyer has done this many times; most owners do it once. Most founders reach the offer stage with an attorney on call and no one beside them who has run a sale, so the gaps a buyer finds in diligence are the gaps that move the price. Our deal team puts the offers side by side before you decide.
- Every offer restated on the same terms, so they can be compared
- The earn-out, rollover, and escrow terms read for what could reduce them
- A plain view of which offer we would take, and why
of the founders we assess score zero on recurring revenue, one of the first things a buyer tests. 85 of 133 companies.
A founder on choosing a buyer
A founder, in their own words, on what to weigh in a buyer.
Joe Seehey CEO, Cured Nutrition · Colorado
Questions
Questions owners ask before exclusivity
Exclusivity is usually granted when you sign the letter of intent, and it is the moment your leverage is highest. It does not come back. Sign it only after the terms that matter are settled, keep the period as short as the buyer can credibly work to, and fix an end date.
Sometimes. An earn-out can bridge the gap between what you believe and what a buyer will underwrite. It works when you can influence the result and the buyer cannot easily influence the metric. If you cannot, treat it as a possible bonus and not as part of the price.
You reinvest part of the proceeds in the new company alongside the buyer. You get cash now and a second payment when the buyer sells. It suits founders who believe in the buyer's plan and have already covered the number they need.
Ask for the last three businesses they bought, then call the founders who sold to them. Ask whether the terms were honored, what changed for the team, and whether they would sell to that buyer again.
A retrade is a request to lower the price after you have signed exclusivity. The best defense is built before you sign: clean numbers, tested elements, and terms that say what can and cannot reopen the price. Bring us in the moment it happens.
Bring the offers before you sign exclusivity
Send us what is on the table. We will put the terms side by side, tell you what each one is worth to you, and say which one we would take.