The Funnel, Ep. 8: What’s the Process to Sell Your Business?

Описание: What Is the Process for Selling a Business? A Step-by-Step Overview for Founders

Once you’ve moved past curiosity and valuation, the next challenge is understanding what actually happens when you take your business to market. The selling process is structured, detailed, and often more involved than founders expect.

In this episode of The Funnel, Candor Advisors founder Kirk Michie walks through the full sell-side process from start to finish. Building on earlier discussions about valuation, timing, and advisor selection, this video explains what founders should expect once they commit to moving forward. Kirk outlines the major phases of a transaction, why preparation matters, and how each step influences buyer confidence, diligence outcomes, and closing risk.

The discussion covers how deal materials are prepared, why professionally presented financials matter, how a buyer universe is identified, and what happens during outreach. Kirk also explains how indications of interest and letters of intent work, what exclusivity and due diligence really involve, and why this phase often feels difficult for sellers. The goal is to give founders a clear mental model of the process so they can plan properly and avoid surprises that affect valuation or deal certainty.

For business owners thinking seriously about sell-side readiness, this episode provides a practical framework for understanding how transactions unfold. It clarifies how preparation, process discipline, and buyer selection shape outcomes long before a deal closes.

Transcript

Here we’re in the middle of the funnel. You’ve moved beyond curiosity. You have a sense of valuation, an understanding of multiples, and you’ve decided whether you’re going to retain an investment banker or transaction advisor. The next question is: what is the process for selling your business?

This can differ depending on whether you’re working with an investment bank, a business broker, responding to an unsolicited offer, or trying to do it on your own. But the big picture looks similar.

First, you need to prepare materials that accurately reflect your business. When done well, these materials explain your timeline, key business factors, what the business actually does, and what the transferable economics look like. Ideally, they’re built on professionally prepared financial results. They show the current state of the business, growth opportunities, and the financial picture.

At the same time, you need non-disclosure agreements in place so that anyone reviewing the information can’t share it with competitors, other buyers, employees, or customers.

You also need to assemble the right team. That includes hiring an M&A attorney sized appropriately for your business and deciding whether a transaction advisor, such as an investment banker, will be involved. Those decisions need to be made early.

As materials are prepared, you define the buyer universe. Who are you, or your advisor, going to reach out to? Buyers aren’t hard to find. They exist in databases and reach out to investment bankers all the time. The real question is which buyers to approach, how to approach them, and whether to engage a few or many.

Once materials are ready and NDAs are in place, outreach begins. Buyers receive information and may be granted access to a data room with deeper financials and key business details. This might include anonymized customer concentration data, ranked by revenue or profit, and an anonymized organizational chart.

From there, buyers submit indications of interest or letters of intent. Indications of interest are often ranges and outline what buyers would need to see to make a more specific offer. Letters of intent are more detailed, stating price, structure, and conditions.

You and your advisors evaluate those offers, refine them, and decide which buyer or buyers to move forward with. Once a letter of intent is signed, both sides enter exclusivity and due diligence.

During due diligence, buyers verify everything they’ve been told about the business. This phase involves risk review and confirmatory diligence. For sellers, it often feels invasive and accusatory, but it does end.

After due diligence, the transaction closes. At that point, other factors come into play, such as whether the deal is a stock or asset purchase, whether there’s an employment or consulting agreement, a transition services agreement, and what happens with key employees. There are also decisions about whether the business will be merged into another entity or continue operating independently.

From a process standpoint, think about it as material preparation, data room access, outreach, exclusivity, due diligence, and closing.