Who’s trying to buy my business? Are they serious, do they have the money, and should I trust them?
These are questions that all sellers should be asking themselves before and during the sales process.
Interest alone doesn’t mean much in M&A.
Plenty of buyers will raise their hand and express enthusiasm. But not all buyers can actually close a transaction without creating risk.
This week’s newsletter breaks down how to identify serious buyers while protecting confidentiality and making sure the deal you’re working toward is closed on your terms.
We’ll cover:
- 3 insights on what truly matters when vetting buyers
- 2 frameworks we use to protect clients throughout the process
- 1 action step you can take this week
3 Insights About Vetting Buyers
1. Not all buyers are equal
A buyer who expresses interest isn’t the same as a buyer who can close. Some have committed capital. Others are still exploring.
Some have completed multiple acquisitions. Others are trying to figure it out as they go.
Treating every inquiry the same exposes sellers to unnecessary risk. The goal isn’t to talk to every buyer, but to engage the right ones.
2. Don’t be afraid to say “show me the money”
Asking buyers how they plan to fund the deal is one of the most important questions in M&A. Many buyers attempt to secure a Letter of Intent first and then raise capital afterward. That approach introduces uncertainty and often leads to failed deals.
Responsible sellers, and responsible advisors, ask for proof early. Commitment letters, bank relationships, or fund backing should all be table stakes.
3. A buyer’s past behavior is the best predictor of future behavior
How buyers act early tells you a lot. Do they respect the process? Do they understand when certain information should (and shouldn’t) be shared? Do they have a history of closing deals?
Buyers who push boundaries early often do so later when the stakes are higher. Vetting behavior upfront protects sellers from headaches down the line.
2 Frameworks That Protect Sellers
The Pre-Screening Filter
Before any sensitive information is shared, buyers must be screened. This includes understanding who they are, how they operate, whether they’ve closed deals before, and whether they can honor confidentiality.
An NDA alone isn’t enough. Pre-screening ensures that only serious, qualified buyers ever gain access to the business.
The Guardrails Model
Not every buyer fits neatly into a box. In some cases, especially with independent sponsors or first-time acquirers, additional guardrails are required.
These may include financing contingencies, limits on exclusivity, or staged access to information. Guardrails don’t kill deals. They protect sellers while allowing real buyers to prove they belong at the table.
List of Our Completed Transactions
1 Action Item This Week
Require proof of financing
Before sharing detailed financials or confidential information, ask buyers to show how the deal will be funded.
A commitment letter or clear financing plan separates serious buyers from everyone else.