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

By Ryan Kuhn. Since Ryan founded M&A advisor Kuhn Capital, the firm’s principals have initiated 80 mid-market tech industry M&A transactions worth more than $3 billion.

Introduction

Selling a company with revenue of $10 million or more demands time and hard work. The M&A process has lots of intricate moving parts that interlock like gears. So, smart business owners and their advisors act like pilots preparing for takeoff. They use checklists of key tasks to ensure that nothing slips through the cracks. See below for that list.

But First: The Place of Advisors in M&A Deals

Even with the world’s best M&A checklist, the sale of your business relies on the expertise of at least two professionals – a CPA and an M&A lawyer.

• The accountant certifies (or preferably audits) your financial statements;
• M&A legal counsel ensures that there are no nasty surprises in the fine print of purchase agreements and other sale-related legal documents, and in general works to tilt the language in your favor.

The ideal CPA has experience in M&A transactions. The attorney must have it.

Most mid-market sellers also retain an M&A advisor to manage the sale process while the seller’s CEO focuses on operating—and ideally, enhancing—the business. Sellers that retain advisors on average enjoy 25% higher valuations. See the supporting academic research here.

Among the advisor’s duties are to:

• Conduct internal due diligence that forms the foundation of the seller‘s marketing material (teasers and CIMs described below);
• Recruit and manage potential buyers;
• Create a competitive bidding environment, and
• Help negotiate deal terms.

In a word, competent M&A advisors are the orchestra conductors of M&A campaigns.

Last, the owners of selling companies will also likely benefit from the advice of wealth advisors and tax experts who together design ways to turn deal proceeds into lifestyle and estate-planning choices.

Step 1: Valuing the Business

For at least two reasons, prospective sellers need a business valuation before undertaking arduous Internal Due Diligence in Step 3 below. A valuation helps:

• Determine whether that target’s value is sufficient to make pursuing a sale worthwhile.
• Avoid scaring off potential buyers with unreasonable price expectations.

To value your business, you can either hire a specialty business valuation firm (ideally, one with experience in your industry) or an M&A advisor. As mentioned above, competent advisors are a one-stop M&A shop not only for valuations but also for their many other duties, as described in my article, How to Sell a Mid-Market Company (Advisor Version).

Two Valuation Methods for a Going Business:

• Income-Based: Uses the company’s estimated future cash flow (or EBITDA) to determine its worth after discounting the flow for risk and time (the result is a single number called “present value”). (For deal lingo every seller should know, see my article The Founder’s Guide to M&A and Fund-Raising Terms.
• Market-Based: Compares the company both to the adjusted values of similar public companies and to similar companies that recently sold.

There are many other valuation techniques, such as book value and fire-sale liquidation, but they’re only relevant in specialized circumstances. For details on the imperfect science of valuation, see How Investors Value a Business.

Experts express value as a range because it’s difficult to predict precisely how heavily a given buyer will value synergies with the seller, if any, or whether the buyer’s CEO will come to regard the target as a trophy.

Step 2: Preparing for Sale

To prepare a mid-market company for optimal value at sale, up to a year of advance work is required. You could divide that year into projects started at the beginning of that period and those begun about six months later. Those started a year before you could regard as renovations of the business’s foundations:

Control Systems

Control systems, such as accounting and ERP systems, quantify financial and operational data. Can you slice them in various ways to demonstrate key metrics such as average client age, size, location, profitability, and profit by product line? All such data can create the perception of value and of your mastery of the business. Review your control systems to improve their comprehensiveness and flexibility before retaining an M&A advisor. (BTW, advisors require at least six months to sell a mid-market company.)

Operations

Are they efficient (streamlined) and effective (productive)? Time to get creative:

1. Optimize Processes: Identify and simplify.
2. Reconsider Which Processes: Are there different ways to achieve the same product or service?
3. Upgrade Technology: Invest in modern tech to enhance productivity, reduce costs, and safeguard data.
4. Find Ways to Deepen and Broaden Market Position:
   • Expand Customer Base: Implement strategies to attract new customers and retain existing ones. Introduce related add-on products or products with differing degrees of functionality.
   • Enhance Brand Reputation: Invest in marketing and PR to increase positive recognition.

For more details on these and other projects that are best begun a year before anticipated sale, see my article Bigger Projects That Increase Value More.

Everything Else

M&A advisors are typically retained six months or more before you hope to sell the business. Part of their job is to identify specific value-creating opportunities before going into the market. For examples of such short-term projects, see my Quick Ways to Increase Value Before Sale.

Step 3: Internal Due Diligence (DD)

As noted above, your advisor should recommend short-term opportunities to enhance value before soliciting buyers. Those suggestions arise from a methodical (and, to many first-time sellers, exhaustive) internal DD process the advisor leads during the first few months of engagement.

The advisor must undertake internal DD to write a confidential information memorandum (CIM). So, you could regard any value-enhancing proposals as a byproduct of CIM creation. For more about CIMs, see Step 4 below.

Step 4: Marketing the Business

Writing the Confidential Information Memorandum (CIM)

CIMs provide potential buyers with their first comprehensive look at the seller’s business. See my article, The Perfect CIM, for more on their purpose and content. In short, the CIM organizes all relevant DD gathered in Step 3 for presentation to buyers.

Attracting Prospective Buyers

Finding and soliciting buyers with the highest probability of interest and capability requires you, or your advisor, to:

First, Define the Ideal Buyer

The best fit between buyer and seller produces the best deal. To figure out what type of buyer could best fit your company (for instance, a strategic or operating company versus a financial buyer like a private equity firm), see my article Your Best Acquirer.

Then Use Targeted Marketing Channels

• Direct Outreach: E-mail marketing, direct calls, networked introductions, all to handpicked candidates. You contact these individuals to deliver a brief “teaser” describing the purchase opportunity (about 2 pages).  
• Online Platforms: Mid-market sellers rarely appear on businesses-for-sale online platforms. Those are typically used by business brokers listing smaller sellers serving local customers.
• The advisor approaches no buyer without the seller’s prior authorization.

Requiring NDAs as the Gateway to CIMs

To ensure confidentiality, buyers who wish to learn more about a seller beyond what’s available in an anonymous “teaser” must sign a non-disclosure agreement (NDA or confidentiality agreement). This requirement also serves a second purpose: filtering out unserious buyers who aren’t interested enough to sign the document.

Step 5: Engaging with Buyers

In-Person Contact

The seller’s M&A advisor will invite a small number of qualified buyers to structured meetings with the seller. These consist of:

• Face-to-Face Sit-Down
  An opportunity to discuss the business, gauge the buyer’s interest, explore mutual interests, and assess “chemistry.”
• Seller Presentation
  During the Sit-down, the seller delivers a brief, visually appealing presentation that highlights the company’s history, strengths, growth opportunities, and competitive landscape. It’s a slimmed-down CIM in overhead slide form.
• Q&A
  Following the presentation, both parties will participate in an interactive Q&A (with most questions coming from the buyer). The M&A advisor has prepared the seller for this and developed compelling responses in advance.
• Tour of the Premises
  Following the above, a show-and-tell tour gives buyers a firsthand view of the seller’s organization and the layout and adequacy of its physical space. M&A advisors typically schedule tours like this after hours to maintain confidentiality.
• Dinner?
  If things go well, the parties may agree to share a meal and perhaps a glass of wine. A relaxed environment after a disciplined day can go a long way toward building trust and commitment to move forward together.

Evaluating Buyer Interest and Fit

It’s on the seller and M&A advisor to vet potential buyers’ financial capacity, industry reputation, management team, acquisition rationale, and post-close plans, and to interview the owners of companies the buyer has acquired in the past. If all that checks out, the next step is for the parties to negotiate an LOI.

Step 6: LOI and Buyer DD

Letter of Intent (LOI)

The next step in selling a business is obtaining LOIs from qualified buyers. They can be as short as two pages and outline the buyer’s proposed key terms and conditions of sale. The seller’s M&A advisor typically seeks, negotiates, and compares multiple LOIs before working with the seller to select a single bidder to proceed with. For my article on what LOIs cover, see The Perfect LOI. Meanwhile, here’s a quick summary:

LOI Terms and Conditions

• Purchase Price: Includes types and timing of consideration paid (cash, stock, earn-out, etc.).
• Schedule: Dates by which certain milestones are reached, including the closing.
• Contingencies based on the outcomes of due diligence findings, buyer financing, regulatory approvals, and the resolution of outstanding tax issues, etc.
• Exclusivity Period: Buyers almost always require an exclusivity period—up to 6 months—during which the seller is prohibited from contacting other potential buyers while the selected buyer pursues DD and continues negotiations over terms.

Buyer DD

Signing an LOI immediately fires the starting gun for deep buyer DD. While the CIM is designed to answer 80% all all buyer questions, it can’t anticipate each buyer’s unique circumstances and interests.

Therefore, seller beware: responding to that last tedious DD 20% can test the patience and resources of its M&A team, especially when the target is much smaller than the acquirer.

For more on this topic, see The Ultimate Guide to DD Process in M&A.

Step 7: Purchase Agreement Negotiations

You want to work with experienced M&A and legal advisors when drafting the purchase agreement (PA) language. Of all the steps above, negotiating PA terms is the most important.

A Few Key PA Terms

• Purchase Price: Includes payment terms.
• Representations and Warranties: Reps and warranties protect each party from the other party’s misrepresentations and define the associated penalties. That said, most of them apply – as you’d expect – to the seller. They can be among the most contested and last PA topics addressed. For tips on how to navigate reps and warranties and storm-tossed PA waters in general, see The Perfect Purchase Agreement.
• Post-Closing Obligations: Promises to be fulfilled by one party for the benefit of another after closing. Examples: seller non-compete agreements, transition support, and earn-outs. 

Legal Review

• Compliance: Your legal counsel confirms that the deal complies with applicable laws and regulations.
• Risk Mitigation: He/she also minds the fine print in the PA’s indemnification clauses and dispute resolution mechanisms.

In sum, your counsel recommends PA language that either plays to your advantage or moderates excessive buyer demands.

Final Touches

If full agreement remains elusive, make reasonable compromises! Getting this far already took considerable time and effort, and you may never encounter a better opportunity.

Step 8: Closing

• Review: Both parties and their advisors comb through the PA one last time to confirm that all terms and conditions are met.
• Legal Documents: Your trusty M&A counsel ensures that needed legal documents are prepared and signed. While not too long ago this step required a face-to-face meeting, today it’s typically performed virtually, saving time and money.
• Transfer of Ownership: Another task for M&A counsel is preparing filings to document the transfer of equity and/or assets, including IP, and any other necessary documents to satisfy government red tape.
• Payment Receipt: Verify that the seller’s checking account shows the expected balance. Congrats: it does.

In Sum

I don’t think entrepreneurs ever work harder than when selling their company. But using checklists, a one-step-at-a-time approach, and trusted advisors keeps the task from becoming overwhelming. And of course, a successful closing makes it all worthwhile.

Got questions about M&A processes? Email us.
Revised 2/3/26. © Kuhn Capital 2026. All Rights Reserved