Selling your company is a complex process involving numerous parties, each with the power to shape the outcome of your transaction. While you may be focused on impressing the buyer’s business team and looking forward to the financial rewards, the reality is that people you don’t know—and who don’t know you—will be the ones deciding your company’s worth. From lenders and financial analysts to the buyer’s legal counsel, these parties will determine the true value of your business, often without fully understanding the years of effort that went into building it.
This article will introduce you to the key players in your company’s sale, explain how they can impact your valuation, and highlight why early preparation—especially legal preparation—is essential. With the right steps, you can avoid common pitfalls and approach the sale with confidence.
THE TEAM ON YOUR SIDE
As the owners of your company, you and your partners have the most at stake. Your decisions, preparations, and negotiations directly influence the success of the sale and the value you receive. While you’re focused on driving growth and making strategic decisions, it’s important to recognize who else will be involved in the process and how they’ll play a role in shaping the outcome.
INTERNAL KEY PLAYERS
Confidentiality is critical in any sale, so only a select group of key team members should be informed. For example, your CEO will play a vital leadership role if you’re not in that position yourself. The CEO is the communication bridge, managing internal communications and helping prepare the company culturally and operationally for the transition.
Your Chief Financial Officer (CFO) is essential for presenting accurate financial data, addressing financial due diligence queries, and offering insights on structuring and tax implications. Select other team members from departments like operations, HR, or technology can also provide valuable insights, helping to ensure every part of the business is prepared.
LEGAL AND ACCOUNTING: BUILDING THE FOUNDATION EARLY
A strong legal and accounting foundation is key to presenting a clean, well-organized company. Ideally, your legal counsel should know your business inside and out long before any sale is on the horizon. Legal and financial preparedness is not something to rush; it’s a long-term investment that pays off when scrutiny begins. Your legal team helps ensure you have well-drafted agreements, compliance structures, and best practices that demonstrate professionalism and reduce red flags.
Accounting plays a similar role, providing financial transparency and credibility. Routine audits and sound financial practices allow buyers to see a reliable financial history, boosting confidence in your company’s stability.
WHO’S ON THE BUYER’S SIDE?
Once you’re ready to sell, the buyer’s team will take the lead—and this is where the real scrutiny begins. Buyers rarely act alone; they bring a team of advisors who will dissect every detail of your business. Here’s who you can expect to encounter:
THE BUYER’S BUSINESS TEAM
The buyer’s executives and managers typically initiate the interest, seeing potential in your company’s assets, market position, or unique offerings. Once they’re on board, however, they turn the reins over to their own legal and accounting teams, who dive into the real analysis. The buyer’s businesspeople may be excited about your potential, but if their financial or legal advisors raise concerns, the deal—and the valuation—can shift quickly.
THE BUYER’S LEGAL TEAM: THEIR JOB IS TO FIND EVERY ISSUE
For deals around or above $30 million, the buyer’s legal team will likely be a large, specialized firm accustomed to representing substantial corporations. These firms often view smaller or mid-sized companies through the same lens as Fortune 500 companies, leading to exhaustive due diligence that might seem over the top. Junior and mid-level lawyers—often with limited experience with middle-market companies—will be the ones tasked with picking through your agreements, contracts, and compliance documents to flag any issues that might pose a risk.
The buyer’s legal team is looking for reasons to adjust the terms, reduce the sale price, or require additional protections, like escrow accounts. This means that even minor lapses in compliance, ambiguous agreements, or documentation gaps could carry hefty price tags in negotiations. A proactive legal team on your side can help avoid these red flags long before they become an issue, ensuring you’re well-positioned when the time comes.
FINANCIAL AUDITORS AND ANALYSTS
On the financial side, the buyer’s auditors and analysts are responsible for verifying the integrity of your financials. They dive deep into balance sheets, payment histories, and projections, seeking out any inconsistencies or signs of instability. They might also demand transparency in your tax history, inventory management, or debt structure. Here, your accounting team’s job is to ensure accuracy, consistency, and clarity in financial reporting so that the buyer’s analysts don’t have to dig too deep to find what they’re looking for.
Other Players: Lenders, Private Equity, and Outside Investors
In many transactions, buyers rely on external funding sources like banks or private equity firms, which may also conduct their own evaluations to protect their investments. These stakeholders add another layer of review, potentially introducing further requirements for compliance, financial performance, and risk management. When these parties are involved, having a well-prepared legal and financial foundation will streamline the process and minimize friction.
EARLY LEGAL PREPARATION: WHY IT’S ESSENTIAL
When it comes time to sell, it’s too late to start cleaning up your company’s books and legal records. To be truly ready, you need an experienced legal team that has been deeply familiar with your business for years. A seasoned seller’s lawyer understands how to speak to the buyer’s team—not just the buyer’s businesspeople but also their lawyers, lenders, and financial analysts—essentially, the people you really need to convince.
An experienced legal advisor doesn’t just manage paperwork; they know how to address questions and concerns from the buyer’s counsel and stakeholders, and they know how to keep negotiations on track toward closing. A good seller’s lawyer is an asset—they know how to navigate the dynamics of each key player on the buyer’s side and will focus on getting the deal done while protecting your interests.
For business owners who have been focused entirely on growing their business, it’s imperative to work with a lawyer who has walked this path many times before, who can anticipate and preempt the concerns that buyers and their advisors will inevitably raise. Early legal preparation with the right counsel means you’re not just preparing to sell to the buyer; you’re setting the stage to earn the confidence of every stakeholder involved.
GROWING WITH YOUR LEGAL TEAM
Every decision, from signing a new contract to expanding into new territories, can impact your company’s valuation. Legal risks don’t disappear just because you’re in a growth phase; if anything, they compound over time. This is why working closely with your legal counsel to ensure compliance and organization is so critical. You’re not just growing your business—you’re securing its future value.
The buyers, their lawyers, and their financial analysts are coming in as strangers with high expectations, and their mission is to identify any weaknesses. Having your legal and accounting teams by your side for years means that when the time to sell arrives, your company is clean, organized, and positioned to meet—and exceed—their standards.
Selling a company is about more than just having a buyer ready with an offer. It’s about navigating a multi-layered process where strangers—lawyers, financial analysts, lenders—have the power to determine your company’s worth. Preparing for a sale years in advance with the guidance of experienced legal and financial advisors means fewer surprises, stronger negotiating power, and a higher chance of closing on terms that reflect the true value of what you’ve built.
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