Sell Your Company in 150 Days – Part 6: Buyer Negotiations & LOI Submissions

Stage 6: Buyer Negotiations and LOI Submissions

ECP Ventures offers a disciplined, diligent, structured 10 Stage 150 Day sales transaction process for business owners to sell their businesses with sell side M&A representation.

The ultimate goal is to secure 5+ qualified LOI's for our seller's consideration and ultimate selection. At this stage we have narrowed down the 75 to 150 interested parties to a goal of 15 participating buyers. These 15 buyers have been through the first round of vetting and have demonstrated a confirmed interest and an ability to pay.

The Information Exchange

We ask these buyers to submit their first round of questions for our sellers. We establish a separate confidential digital data room for each buyer where all buyer questions and seller responses are filed for current and future access. Individual meetings are scheduled (in person whenever possible) with the buyers and sellers.

This round of meetings clearly defines which buyers have serious intent and are going to stay engaged through the LOI submission stage. We respond to all buyer information requests in a timely and complete manner. This stage is scheduled for 21 days for information exchange and LOI submission.

Putting Intent Back in Letter of Intent

Our LOI submission process is unlike most. We actually put "Intent" back in Letter of Intent. Many brokers and advisors use LOI's like hunting licenses to set the hook (for both the buyer and the seller) without hardly any clarity or definition of the primary deal points. You will regularly hear the phrase "we will work it out during due diligence". Absolutely not in our model! That approach only postpones the difficult and dramatically decreases the likelihood of a mutually successful close.

We do the exact opposite. We strive to address all deal points at this stage. The easy – moderate – difficult and contentious. This rigorous process eliminates the incapable or unwilling buyers and it also clearly establishes the expectations of the buyers and the sellers.

When this is done right the deal terms and conditions are well structured and documented and there are no expectation gaps. That makes due diligence and document drafting mechanical and methodological. There are no surprises. Only participants following through on what they have already asserted that they would do.

Keeping Attorneys in Their Lane

There is a second direct benefit. We purposely do not engage the attorneys until this stage is complete. We adamantly believe that the M&A advisors should handle the deal points. If you let attorney's get involved with deal points you are asking for delays and contentiousness.

We believe the lawyers should do what they are good at such as representations and warranties, indemnities, environmental, compliance etc.

Now we have real deal offers to share and evaluate with our clients.

We are a 100% successful efforts firm so all services described above are performed with zero cost and zero risks to our clients.