How to Sell a Mid-Market Company (Advisor Version)

This article explains what advisors do in a sell-side campaign — their tasks and pacing. Also see this article about the sell-side responsibilities of owners and how they complement and coordinate with those of their advisors.

Selling a company is a complex, time-consuming undertaking, and most owners attempt it only once. To help, the effective advisor brings structure to the project, managing progress through its stages, setting expectations, encouraging competition among buyers, and imposing timing discipline on a transaction with many moving parts.

But First, Sell-side vs. Buy-side Advisors

Viva La Difference

Sell-side advisors–

• Conduct deep due diligence on sellers’ companies before taking them to market;
• Create a comprehensive Confidential Information Memorandum (CIM) that describes the business in a clear, compelling way.
• Manage a staged buyer outreach process that ideally results in buyers competing to purchase the client’s company on a tight schedule.
• (See more details on their activities below.)

In contrast, buy-side advisors typically

• Pursue targets on a serial basis over time.
• Specify the buyer’s acquisition criteria, find targets that fit, confirm those owners’ interest in discussing the sale, and quickly reconfirm suitability
• Introduce the parties and, if requested, provide the buyer with subsequent guidance.

Compensation Also Differs

Sell-side compensation is usually straightforward: a success fee, calculated as a percentage of the final sale price, and a retainer to confirm commitment and offset advisor expenses. This structure aligns incentives: both the seller and the advisor are rewarded for optimizing deal terms.

But buy-side compensation is trickier. No buyer wants to pay an advisor more as the target’s price goes up. So, buy-side fees vary and can feature:

• A capped or declining success fee percentage as the transaction value rises.
• A flat fee.
• A flat fee plus a performance bonus for negotiating savings compared to the seller’s original ask.

In any case, when fees get too complex, as the last one above may be, they’re prone to misunderstandings. Simpler is usually better.

What Advisors Want

Most advisors will work with both sell-side or buy-side clients, though more are interested in the sell-side because those clients tend to be more committed to closing a deal and because the process itself offers clearer timelines.

That is, sellers are often compelled by circumstances or desire, a condition known as being “in play.” (For an interesting survey about why owners sell, unfortunately, about a third of the time involuntarily, see this brief note.) In contrast, buyers’ commitments are typically elective: they can hesitate to pull the trigger when a more compelling target may be lurking just over the horizon.

The Sell-side Journey

The duration of each stage below depends on factors such as business complexity, the seller’s responsiveness to due diligence enquiries, and the difficulty of negotiations. Therefore, please note that the following outline only describes a typical process.

Pre-Engagement Stages

Stage -1: Valuation (2 weeks)

Everything begins with a valuation. The purpose of getting one at this initial stage isn’t to attain high precision. Rather, it’s meant to determine whether the value range meets the seller’s expectations.

Reputable advisors know that asking too much is a leading deal killer. If the valuation disappoints, they’ll suggest growing the company further before going to market.

Yet in the case of a rich valuation, seller beware. Reconfirm the logic of the advisor’s analysis. Less reputable firms may paint a rosy picture to secure a retainer.

Stage 0: Investment Banking Agreement (IBA) (2 weeks)

If pricing expectations match, the advisor drafts engagement terms, retainer structure, success fee, and responsibilities. Retainers confirm commitment and encourage the advisor to invest substantial time and expense in the months before closing. For advisor retainer and success fee details, see “Which to Use — M&A Advisor or Business Broker?”

Engaged Stages

For simplicity, the engaged stages below are portrayed as unfolding sequentially. In reality, they overlap. Also, how much time a stage takes depends heavily on the complexity of the seller’s business, how quickly its management makes company data available, and how quickly they complete certain tasks necessary to become market-ready

Stage 1: Internal Due Diligence (4 to 6 weeks)

This stage is detailed and demanding. Experienced advisors know what buyers want and work with the seller to create, gather and compellingly present it. Topics covered include company history, market, customers, operations, staff, and financial performance (both historical and projected). The idea is to uncover anything of interest to buyers before they do so themselves.

In addition to creating data that buyers need, the internal DD stage can uncover problems like —

• Gaps in operating and financial data
• Accounting errors
• Incomplete/obsolete corporate books
• Tax or legal issues
• Loan covenant violations
• Inadequate IP protections
• An unclear or fragmented cap table (stock ownership registry)

For a list of common, fixable problems, see Quick Ways to Increase Value Before Sale. More positively, the exercise may also expose previously unknown arguments for value. Example: the discovery of a high-margin, rapidly growing customer segment.

By the end of Stage 1, the advisor typically understands the business well enough to represent it effectively to external parties, often better than the seller.

Stage 2: Preparing the CIM (4 to 6 weeks)

The advisor now uses the information gathered during internal due diligence to prepare a document describing the company for potential buyers. It’s the Confidential Information Memorandum (CIM), also sometimes called the memo or “book.”

A good CIM is more than a collection of data points. It’s a story that clearly describes the company’s history, market, customers, operations, financial performance, organizational structure, and, at times, the reasons for sale.

It should also explain the factors that drive value in the company’s industry, such as sales growth and margins. Sophisticated advisors use regression analysis to identify those value-driving factors. Last, the advisor may customize a CIM to highlight certain seller characteristics that a particular buyer values.

Sellers should ensure their CIM is clear, complete, and well-organized. It’s a key marketing document and merits close attention. Many advisors delegate this work to junior staff: CIMs are too important for that. See The Perfect Confidential Information Memorandum for an annotated table of CIM contents.

Stage 3: Going to Market (4—8 weeks)

As the CIM nears completion, the advisor begins contacting potential buyers. For companies that aren’t well known in their industry, the list can reach 300 candidates, but it narrows quickly. About half are eliminated due to weak strategic fit, inadequate financial capacity, data errors, reputation, and other disqualifying factors. In any case, competent advisors don’t approach any prospect without advance client authorization.

The advisor contacts the surviving 150 with a brief “teaser” describing the opportunity. Two-thirds of them will ignore it. If we at Kuhn Capital believe a target should respond, we will make additional efforts to follow up until we obtain a definitive answer, and, if the answer is no, the reason why.

Follow-up can be particularly productive for strategic initiatives where responsibility for M&A is often unclear, or when several executives must coordinate before responding.

Finally, the advisor sends an NDA to those who expressed interest—perhaps one-fifth to 30 of the 150 buyers originally contacted—and about half sign. NDA paperwork may prove too bothersome for some with only an idle interest. Better to know that than later.

Stage 4: Qualifying Buyers (4 to 6 weeks)

At this point, the advisor’s working with about 15 or 5% of the original pool, or those who’ve signed and returned an NDA. The next goal is to obtain from them, by a date certain, a letter of Interest (LOI) outlining their purchase offer. (See The Perfect LOI for the contents of a competitive LOI.)

As small as the number of buyers remaining may appear, it’s enough to convincingly argue that the seller is an attractive entity and that bidders should expect competition. This is one of the strongest reasons to retain an advisor. Competition disciplines and clears the market at the best price. (For more details on how types of seller offers and auctions vary depending on the nature of the seller, see this Wall Street Prep article.)

After reviewing the LOIs — and after the advisor converts all oranges to apples so the seller can meaningfully compare them — they select perhaps the two strongest bidders and attempt to improve their offers.

Then, having alighted upon the “best” offer (some combination of terms, chemistry and trust), buyer and seller are set to begin haggling over purchase agreement language in the next stage, Stage 5. Meanwhile, the artful advisor will attempt to keep the second choice on a back burner should the leading candidate falter.

Stage 5: Negotiate and Document the Deal (4 to 5 weeks)

The advisor works with counsel to negotiate the purchase agreement (PA), including its representations and warranties, indemnities, working capital mechanisms, and transition expectations.

Stage 5’s length is the least predictable: Its progress relies on lawyers who are compensated for their time, not by closing. That is, the tradeoff is between speed and a tightly constructed purchase agreement.

This stage is also often the most contentious, where buyer and seller may frequently disagree on the precise wording of closing documents. If negotiations become tense, the advisor may step in as the “bad cop” while the seller remains the reasonable party. This can protect relationships needed for the final closing steps and the upcoming transition period, even beyond given earn-outs.

For specific examples of sellers unintentionally derailing deals at this stage and how to avoid doing so, read How Sellers Kill M&A Deals.

Stage 6: Close (4 weeks)

It’s not unusual for buyer and seller to execute a definitive sale agreement and related documents before deal compensation actually changes hands. That time gap of about two weeks to a month means that the lower mid-market sale process typically takes six to nine months and, on average, consumes eight and a half.

Choosing an Advisor

Some differences between sell-side M&A advisors:

• Experience
• Dogged persistence over extended periods
• Financial modeling and valuation expertise
• Attention to detail
• Clear, persuasive communication skills
• Ability to identify and demonstrate sources of seller value. That is, apply creative insight into what buyers consider valuable and how to position the seller accordingly
• Conversely, the ability to identify and solve issues that reduce value
• Knowledge of the seller’s industry
• While “who you know” has traditionally been important in M&A, it has become less so in the age of Internet connectivity, especially for mid-market and transnational deals involving hundreds of potential counterparties.

Sources of M&A Advisor Value-Add

Wrap-Up

Most company owners and managers find selling a business to be among the most demanding times of their career. Like sherpas, advisors help guide clients through unfamiliar terrain and free seller management to focus on running the business at a critical time. Do they succeed at these tasks? The proof is in the purchase agreement.

Got more questions about what sellside advisors do? Email us.
Revised 2/3/26. © 2026 Kuhn Capital, Inc. All Rights Reserved