How a Tech Company Can Sell for 25% More

Introduction
Tech company sellers use M&A advisors to optimally manage the M&A process. Extensive research on private company transactions shows that sellers who engage experienced M&A advisors achieve, on average, 25% higher valuations than sellers who don’t. That’s because a competent advisor’s structured merger and acquisition process delivers:

• More buyers and therefore stronger bidding competition.
• More detailed and relevant information about the seller’s business, increasing buyer trust.
• Knowledge of how to quantify and promote tech companies’ unique operating metrics to drive up perceived value.
• Vetting to uncover seller weaknesses that might otherwise surprise buyers, and cure those defects before going to market.
• An experienced seller’s M&A representative who levels the playing field against professional buyers.
• Reduced seller distractions during a time when focusing on operations is critical. See below for the professional M&A advisor process.

At Least Two Buyers a Market Make. When a single buyer approaches a seller with an unsolicited one-off offer, it knows the seller has limited alternatives. That’s especially true when the buyer pushes an “exploding” offer, one that must be accepted by some rapidly approaching deadline. Without an M&A process that brings all buyers to the table at once, sellers never know whether the offer they’re seeing is the best available. In addition, a structured M&A advisory process often introduces both strategic and private equity buyers, each offering different purchase terms and structures. Even if only two acquirers bid on the business, the seller’s choice can push valuation up. That’s especially true for strategics.

More and Relevant Information Reduces Buyer Uncertainty. Professional M&A advisors, those with a reputation to protect, prepare and present detailed data on the seller that builds buyer confidence. Such data includes quantifying revenue quality, customer relationships, proprietary IP, growth drivers, etc. Competent tech industry M&A advisors “speak the buyer’s industry language” by presenting metrics they use to determine the amount and reliability of growth and margins.

Fixing Problems Before Buyers Find Them. Due diligence inevitably uncovers issues. Customer concentration, incomplete documentation of intellectual property, inconsistent financials, unresolved tax disputes, potential lawsuits, all can become bargaining leverage for buyers. A disciplined sell-side M&A advisory process identifies these issues before the company goes to market, allowing management to address them early. The idea is to deny buyers the opportunity to disproportionally devalue the business.

Leveling the Playing Field. Professional buyers, especially private equity buyers, acquire for a living. In contrast, most owners negotiate the sale of their technology company only once. An experienced sell-side M&A advisor helps balance this asymmetry by working to tilt the terms in the seller’s favor, or at least keep them within industry standards.

Freeing Management to Focus on Operations. Running a company while simultaneously managing a transaction stretches management bandwidth. In fact, it’s demanding even with advisory help. Degraded operating performance during the sale process is a leading trigger of failed transactions. Professional M&A advisors manage the entire sales process: completing internal and buyer due diligence, preparing marketing materials, soliciting and managing buyers, coordinating buyer inquiries, scheduling meetings, participating in negotiations and even recruiting outside expertise, such as tax and legal specialists, when necessary. All this so the seller’s management team can continue to run the business.

When to Start. Ideally, no later than 12 months before you expect to sell. This allows the advisor time to identify issues, strengthen financial reporting, and position the company strategically before approaching strategic buyers and PE firms. For details on how to prepare for sale, see Quick Ways to Enhance Value Before Sale and Bigger Projects That Increase Value More.

Q&A
Will employees, customers, or competitors discover that the company is for sale?
The professional M&A advisory process is specifically designed to preserve confidentiality. Qualified buyers initially receive only anonymous information about the business in the form of a so-called “teaser.”To receive anything more, they must sign a non-disclosure agreement (NDA).

Why not simply negotiate directly with a buyer who approaches me?
An unsolicited offer may appear attractive, but negotiating with a single buyer usually limits valuation. Without preparing the company for sale and creating buyer competition, both through a structured sell-side M&A advisory process, buyers have strong negotiating advantages.

How do M&A advisors help buyers understand the value of a technology company?
Tech businesses typically derive much of their value from the performance of metrics not visible in financial statements. Experienced M&A advisors know which metrics are relevant and, given enough time, can even help the seller improve them.

How involved does management need to be in the sale process? Management participation and decisions are essential, but professional M&A advisors will handle everything else. Management can expect the most demanding moments to occur during pre-marketing internal due diligence and the final stages of purchase negotiations. Between those moments, advisor-led sell-side campaigns will give seller management time to optimize the company’s operating performance. Technology companies rarely sell based only on their financial statements. Instead, their value depends heavily on how effectively the company is prepared, positioned, promoted and advantageously negotiated during the sell-side M&A process.

Wrapping Up. A structured M&A advisory process improves outcomes by expanding the buyer universe, clarifying the company’s strategic value, addressing weaknesses before they become negotiating leverage, and ensuring experienced representation at the bargaining table. Companies that have these advantages on average sell for 25% more than those that don’t.
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• For many more useful tips for sellers on how to manage the M&A process, see Kuhn Capital‘s M&A Resource Hub. Revised 7/20/26.