4 – Meet the Parties

You’ve reviewed the confidential information memorandum (CIM) and financial statements, and you remain interested. The next step is to arrange a personal or virtual meeting with the owners, or a site visit to see the operations in person. We ask that you not contact any employees of the company in order to keep the pending sale confidential.

Asking Questions or Requesting Additional Information

If you have a significant number of questions about a particular business, we can arrange a phone call or face-to-face meeting with you and the seller to discuss them. We don’t recommend emailing a list of questions to us or the seller unless they are simple and straightforward. Requests for highly detailed information and subjective questions that require elaborate answers can send the wrong message to the seller and tend to result in a delayed response. We recommend saving any detailed questions or document requests for after an initial meeting with the owners or management team, which saves time for both parties and reduces potential miscommunication.

Demonstrate Your Qualifications

Information about the business is released to you in stages, in a specific order, as you express your interest and provide documentation to confirm your financial and operational qualifications. If you’re an individual buyer or search fund (i.e., independent sponsor), you can speed up this process considerably by providing us with your credit report, resume or C.V., bank statements, tax returns, and any other relevant information. If you represent a family office, we also recommend sharing what information you’re comfortable sharing to demonstrate your qualifications. Likewise, if you represent a corporate acquirer, you can share a list of your previous acquisitions, or financial information about your company. Our experience is that the earlier in the process you confirm your financial qualifications, the sooner parties reciprocate by disclosing information on their company.

Face-to-Face Meetings (If Applicable)

We can also arrange a time to meet the owners or management team face-to-face, or a site tour if the business lends itself to one. The parties find these initial meetings are low-key and largely stress-free. These are “get to know each other” meetings. Having third-party professional advisors attend isn’t ideal to facilitate open conversation, so we have elected not to attend these meetings in general. When touring the business, ask as many questions as you want about the operations, provided they aren’t sensitive, such as names of customers. We also recommend sharing information about yourself, such as your background and experience and why you think you may be a good fit to acquire the business.

Topics to Avoid During the Meeting

  • Asking to see sensitive information, such as tax returns and bank statements
  • Discussing or attempting to negotiate financial aspects of the transaction, such as the asking price or terms. Please contact us regarding all negotiations.
  • Requesting disclosure of proprietary information or trade secrets
  • Discussing other terms of the transaction

Limit the Number of Meetings

When acquiring a business, the seller makes representations regarding their business that aren’t verified until a letter of intent is signed and due diligence begins, so we recommend limiting the number of meetings you request prior to submitting an LOI. There is no magic formula, but the right number of meetings between the seller and a potential buyer is usually between one and three. Most sellers aren’t willing to arrange too many, feeling that if a buyer has not made an offer after a few meetings, they may not be serious about buying the business.