OnwardLearn · Selling · Step 6. Share with buyers what you've built
What to hold back, and until when
The short version
- Share information in stages. Each stage matches how serious and how screened the buyer is.
- Before a confidentiality agreement: no name, only a general description.
- After a confidentiality agreement: the [CIM](/learn/reference#confidential-information-memorandum "The document that describes a business for sale to a buyer who has signed a non-disclosure agreement. The numbers, the history, the customers, the people and the reason for selling.") and summary numbers, with customers shown as codes.
- After a signed [letter of intent](/learn/reference#letter-of-intent "The offer document. It sets out the price, the structure and the main terms, and starts diligence."): detailed records, customer and employee names, pricing and contracts.
- The most sensitive information, especially for buyers who compete with you, comes last.
Why stages
Every buyer who sees your information could misuse it, share it or simply walk away with it. Most will not. Staging protects you from the few who might, while giving serious buyers what they need when they need it.
The stages
Stage 1. First look. An anonymous description: industry, general location, size and what makes the business attractive. No name.
Stage 2. After a signed confidentiality agreement and proof the buyer can pay.
- The CIM, the confidential information memorandum, with your business's name and story.
- Three to five years of summary financial results.
- Revenue by customer, shown as codes.
- Employees by role and tenure, without names.
Stage 3. After meetings, for serious buyers.
- More detailed financial records.
- Answers to specific questions.
- A visit to the business, usually after hours.
Stage 4. After a signed letter of intent.
- The full data room. Lesson 2.6 lists what goes in it.
- Customer names and contracts.
- Employee names, pay and agreements.
- Pricing, margins by customer and supplier terms.
Stage 5. Near closing, only as needed.
- Introductions to key employees, customers or suppliers, with the buyer present and a clear plan.
Buyers who compete with you
A competitor may be a strong buyer, and may pay more. They also gain the most from your information if the sale falls through. Hold customer names, pricing and supplier terms until very late, and share only what is needed to close. Your M&A attorney can tighten the confidentiality agreement for these buyers.
Keep a record
Log what you shared, with whom and when. If a sale falls through, you will know exactly what that buyer saw.
Take this to your own people
The questions for this topic, for your attorney, your accountant or your lender.
- For your M&A attorney: "What should my confidentiality agreement say about returning or destroying information if the sale does not go through?" Listen for: a clear requirement, with a deadline and written confirmation.
- For your M&A attorney: "How should I handle information for a buyer who competes with me?" Listen for: a staged plan, with the most sensitive items held until the end.
This names the question. Your CPA, your M&A attorney and your lender answer it for your situation.
When you’re ready
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