This page is for the founder of an established company in Miami or South Florida who has had a call or a letter from someone who wants to buy the company. Whether to sell at all is covered in sell or scale. Which kind of buyer suits you is covered in our guide to strategic buyers and private equity, and choosing someone to run a sale in business broker or M&A adviser. This page covers the response, while the decision is still yours.
What does an unsolicited approach tell you?
It tells you that someone sees a possible transaction involving your company. The buyer may know your business well, or your name may have come from a broad list of companies in your industry. Ask what prompted the approach before you give it much weight.
The approach does not establish what the company is worth or whether a sale would close, and the buyer's timing may have little to do with your own plans. The caller may also be an intermediary looking for a mandate to sell your company rather than someone acting for an identified buyer. An enthusiastic caller may still need to find the money or get approval from someone else. Some approaches are mainly a way to learn about a competitor's business, and others start in good faith and end when the buyer learns more. Treat the first exchange as your chance to understand the buyer's purpose, and stay courteous while you keep your confidential information to yourself.
What should you say on the first call?
Listen more than you talk. A useful opening is: "Thank you for your interest. I'd like to understand who you represent and what prompted you to contact us. I'll speak with my advisers before deciding whether to take this further."
Then ask about the buyer's own position:
- Who they are, and which entity would make the purchase.
- Who would approve a transaction on their side.
- Why your company interests them, and why they are calling now.
- How they expect to fund a purchase.
- What they would do with the company and its people.
From the buyer's side of the call, two things are worth hearing early: whether the owner is in a hurry, and a number. An unprompted account of how tired you are, or of a personal reason to sell, signals urgency. A figure offered "just as a starting point" can anchor later discussions before you understand the proposed terms. Keep both with your own advisers for now. If you are pressed, say: "I haven't decided to sell. I'll consider whether to continue after taking advice."
A buyer may also ask about your working week, because the answer shows how much the company depends on you. Answer within public information, and leave questions about internal responsibilities until a confidentiality agreement and a process are in place. Close the call by asking the buyer to send its background and the reason for its interest in writing, and give a date for your reply that leaves time to consult your advisers.
If the approach already includes an offer, ask for it in writing and take it to your advisers before you respond to the terms. Two points shape every other term:
- What the buyer wants to acquire: all of the company or part of it, and the shares or only the business's assets.
- How payment would work: what is paid at closing, and what is deferred or depends on later results or on you staying.
How do you know if the buyer is serious?
Look for what you can verify yourself. Check the caller's identity independently, and establish whether they act for an identified buyer or are looking to be hired to sell your company. Then look for the buyer's acquisition history in public sources, bearing in mind that a genuine buyer may be making its first acquisition. Treat a website or a confident introduction as the start of that checking.
Ask who has authority to approve the purchase and what still needs approval. Ask the buyer to explain where the money would come from. Agree with your advisers what evidence to ask for as discussions continue.
Watch how the buyer responds when you ask for time to take advice. Pressure to decide quickly deserves scrutiny, and so does a request for exclusivity before you understand the proposal or have considered your alternatives. A request for confidential information before a confidentiality agreement is another warning sign: state your boundary and see whether the buyer respects it.
A credible buyer may still be the wrong buyer for you. Keep your decision about selling separate from your assessment of whether this buyer could complete a purchase.
What should you share with a buyer, and when?
Share information in stages, with a reason for each disclosure. The sequence below is a common pattern, and your own attorney sets the actual sequence and safeguards for your company. A signed confidentiality agreement opens the next stage only, so keep releasing material against specific requests.
| Stage | What the buyer may see | What waits | Who is involved |
|---|---|---|---|
| First contact | Public information about the company | Anything confidential, and any figure you have in mind | You, with your advisers consulted before the next conversation |
| Once your attorney confirms a confidentiality agreement is in place | Summary financials and a company overview, within limits your attorney approves | Customer names and detailed pricing, until there is a specific need and an agreed process | Your attorney and accountant, and a trusted finance person if needed |
| After a written indication of interest or letter of intent | Deeper diligence material, once your attorney has reviewed the written proposal and you have agreed the scope, released in stages against specific requests | Anything outside the agreed scope, and any exclusivity commitment until your attorney has reviewed it | Your attorney and accountant, and an adviser if you have appointed one |
| A competitor, at any stage | Competitively sensitive information only where it is needed, with access and use restricted under safeguards set and monitored with your attorney | Direct access to pricing, cost, customer and employee detail until the safeguards and recipients are agreed | Your attorney, who decides whether a clean team or specialist advice is needed |
Before you release a document, ask the buyer what decision it supports, and keep a record of what you shared and with whom. A request you have not answered can wait while your advisers look at it.
When the buyer is a competitor, staff of the Federal Trade Commission's Bureau of Competition, in their guidance on avoiding antitrust pitfalls during due diligence, advise sharing the least information each stage needs and describe safeguards such as clean teams for sensitive material. Our buyer guide covers that case in more depth. Take any proposed disclosure process to your attorney.
Should you answer this buyer alone or test the market?
A single offer gives you no competing proposal to compare it with, though your advisers can still test it against the value of keeping the company. Each route below asks something different of your time and your confidentiality, so decide how much of either you are willing to give before you choose.
- Say no, or not now. This takes the least time and ends further disclosure. You keep your plans for the company, and accept that this buyer's interest may pass.
- Continue directly, with your own attorney and accountant. The circle stays small, and you carry much of the coordination yourself. With no competing proposal, your position rests largely on your willingness to walk away.
- Ask an adviser for a limited market check. This adds preparation and founder time, and tells more parties that the company might be for sale. Agree in advance who may be contacted.
- Run a fuller sale process. This usually asks the most of you and involves the widest disclosure. Competing interest may improve your position, and confidentiality gets harder to hold as more people learn of the possible sale.
We would settle whether you want to sell before authorizing any outreach. Curiosity about one caller can otherwise turn into a sale process you never meant to start. If the approach is for part of the company, our guide to minority and majority stakes covers that choice.
Who should you call before the next conversation?
Call your own attorney before you agree to confidentiality terms or sign a letter of intent, and ask which provisions would bind you. Have any proposed exclusivity reviewed before you sign, including what it would mean for other conversations.
Speak to your tax adviser about the proposed structure before you judge what a sale would mean for you. A buyer's description of an attractive outcome still has to be tested against your own circumstances.
Then decide whether you want an adviser to handle the commercial discussions, given how much time you can give the process while running the company. The buyer's advisers work for the buyer, so keep your own advice independent. If the buyer expects you to stay after closing, read our guide to staying on after selling before you agree to anything.
Should you tell your team about the approach?
Ask your attorney early whether anyone must be told, and when. Beyond that, keep the circle small while you decide whether there is anything to pursue. A co-owner, or a spouse with an ownership interest, may need to be involved early. Bring in a trusted finance person only when their help is needed to answer questions.
Agree with everyone involved how the approach will be discussed and where documents will be kept. News of a possible sale can reach employees and customers before you have decided to consider it. Prepare a truthful answer in case word gets out, avoid promises about an outcome you cannot know, and ask your attorney about any employment or disclosure questions.
Keep running the company. Hold your normal meetings and stay available for decisions, because a possible transaction can take your attention long before it produces anything worth accepting.
What if you decide not to sell?
You can decline politely and leave the door open: "Thank you for your interest. We've decided to continue building the company and won't pursue a sale now. You're welcome to contact us again in the future."
If you shared confidential material before deciding, ask your attorney how to end the buyer's access and whether the confidentiality agreement requires it to return or destroy what it received.
Then put the approach to use inside the business. Note which of the buyer's questions you could not answer without describing your own involvement, and which decisions still wait for you. Our exit readiness guide sets out what buyers examine, and the same work strengthens the company whether you keep it or sell it later.
Carlos's line from his banking years applies here: "Your valuation scales only when your absence doesn't threaten the business."
What should a founder do this week?
- Send a measured reply. Thank the buyer, ask for its background and interest in writing, and keep any figure to yourself.
- Arrange your own advice. Speak to your attorney and tax adviser before the next substantive conversation.
- Set the information boundary. Share public information only until your attorney approves the next stage.
- Decide whether you want to sell. Write down why you own the company and whether a sale serves that now. Declining is a legitimate outcome.
- Decide whether you want to sell before you decide about the buyer who called.
- Keep any figure, and any sign of urgency, out of the first conversation.
- Check whether the caller acts for an identified buyer, and how that buyer would pay.
- Release confidential information in stages that your own attorney has agreed.
- Pause if the buyer refuses reasonable verification or keeps pushing past the disclosure limits you set.
The Leadership Scorecard takes ten minutes and shows which parts of the company still depend on you, which a serious buyer will ask about.