The Communication Process with Buyers

What are the best practices for communicating with potential acquirers of your business and carrying those conversations over the finish line—or at least, to the next phase of real negotiations and making a deal?

This can be a very delicate process, where every word matters when it comes to offers and negotiations. This is also a period in which you can completely blow great opportunities or create surprisingly good outcomes.

This stage is about carefully nurturing potential interest in an M&A transaction, ensuring you are engaging with and speaking to the right people, and identifying the real motivations of a potential buyer and how you can position a deal for the maximum results.

Liabilities and Responsibilities

At this stage of a venture, these conversations and deals are no longer about you and your personal finances.

You may definitely have a voice and vote and the option to negotiate a fair and attractive exit package for yourself as a shareholder.

Yet, if you have cofounders, equity investors, creditors, and others with stock options, the equation becomes about them and the health and benefit of the corporation itself.

There can be serious legal responsibilities, with legal liability for mistakes made, negligence, and failing to act in line with your assumed fiduciary responsibility.

Even without other legal shareholders, you may feel a responsibility to your employees, customers, and other supporters who have backed your mission. You want the best for them and the company, even if you will be taking a step back from it in the near future.

With these things in mind, every communication has a certain level of importance.

How to Handle Communications

Your legal counsel will have some input on how to handle M&A-related conversations. You may be soliciting advice from your own personal attorney and corporate attorneys.

In some cases, they may tell you that phone conversations are good when no legal agreements are being made.

Provided conversations are not being recorded, parties can't hold anything against you or claim you committed to a certain deal or terms. (Of course, you don't want to be accused of saying something you didn't, either.)

Email provides a clearly documented paper trail that holds all parties accountable—which can have its pros and cons.

Just be sensitive to the legal side here and keep it in mind when discussing any material aspects of a deal, terms, or when representing data and facts.

Vague conversations are fine, but defer any decisions on paperwork to your legal team and only provide solid answers on data when it can be verified.

Gauging Initial Interest

How do you go about gauging initial interest with potential buyers?

Inbound calls are pretty obvious. If you are doing the right things for your business and with an exit in mind, they will come. You might not take them seriously at first. You might think a call is a prank and hang up. That's okay.

On the DealMakers podcast, I remember interviewing Ray Reddy. During our interview, he talked about receiving a random email from Google that initially looked like spam. That email led to an acquisition worth millions.

At the end of the day, if potential acquirers are really serious, they will call back. Don't be rude. Don't take the outreach for granted. (But, in more than one case, turning down the first offer has landed entrepreneurs much bigger follow-up offers.)

This really comes down to the strength of your position, your legal responsibilities to others, and how much you are willing to bet on them coming back to you versus buying one of your competitors.

If anything, you can turn a mediocre inbound offer or conversation into a chance to shop and auction your business to others.

If you haven't yet received any cold inbound interest, then be on the lookout for responses to your marketing, PR, conversations, and any fundraising pitching and selling you are doing.

In other scenarios, comments about buying you or merging may be loosely thrown around in a conversation. Don't write them off. There could be something there if you follow up.

If you are just spending time with other executives or presenting demos and the topic of a “strategic partnership” comes up, don't let it slip away.

If they joke about buying you or merging, you can spark that train of thought in their minds. “Oh, yeah? What would that look like?” Or you can tempt them with, “If only you could afford us!” Or “Someone is probably going to buy us, especially when X happens.”

Above all, in these conversations, you want to be sure you are attracting the right type of interest. The buyers with the right motivations. Parties that are really interested in a deal, not just milking information or distracting you.

A big part of gauging this initial interest will come out of whom they send to talk to you and whether or not there is an obvious synergy or alignment in getting a deal done, versus hampering your business.

Nailing the Follow-Up

If you've had vague inbound interest, real inquiries, or you've sparked some conversations with executives at partner companies, or you've generated interest with your pitchbook after shopping your startup, follow-up is key.

It's much the same as any other sales situation, especially for high-ticket items or enterprise sales. Buying or selling a company is not like pulling through the drive-through of your favorite coffee chain or throwing your product up on Amazon. There's even more to it than buying or selling a new car or house.

Expect it to take time. Expect to have to follow-up multiple times. They used to say the average sale took seven “touches.” That's why you get all those drip emails, autoresponder texts, the junk mail, social ads displayed in your feed, and the same YouTube, TV, and radio ad clips shown on loop.

With all this noise and evolving customer behaviors, in many cases, it may take 11 or more touches and engagements to get to a closed sale.

It's important to understand that nailing the follow-up isn't just about you following up. You need to be aware that customers have to go through a lot of phases on their end. You can help them do some of these things, either directly or indirectly. And some things they'll want or need to do on their own. Understanding the customer's process will help you as you follow up with them. The phases the customer needs to move through are described in the following sections.

Awareness and Discovery

In order to buy or even consider buying, companies have to discover you and become aware of you. They have to know your company and product exists. Then, they have to become aware that there may be potential or an opportunity for a deal and the ability to purchase your company.


As with making any new investment or purchase of something new in the market, you want to learn more about it. You look them up. You ask about them. You ask them questions and investigate the surrounding marketplace and technology.


If what they learn reveals potential value and they still like you as a company or investment, this is the stage when they really begin considering if they should buy, how they would fund it, and what that would look like. They'll also weigh the pros and cons or risks and upside potential.

Comparison Shopping

No one wants to be embarrassed by grossly overpaying for something or buying a dud, right? Most people today don't even buy a coffee, hotel stay, lunch, or toothbrush without comparison shopping online first. Who would make an 8-, 9-, 10-, or 11-figure investment without at least doing a similar amount of research? What other companies are in the space that may be bought? How do their reviews compare? What about the price and value?


Before a sale is made, they have to develop some amount of trust in you. At this level of the game, it's not just trust in your tech or business operations. It's also your leadership team and those who would be handling the M&A process.

Due Diligence

Trust, but verify. No matter how excited they are, they must verify everything. Some of this soft due diligence will be done up front, followed by a lot more detailed verification after a preliminary deal is struck and you have an LOI.


Even when they've made the mental decision they want to buy, they still want to make sure they are getting a deal and on terms that are attractive to them.

Until you have an LOI in hand with the suggested terms to get a deal done, you are still just flirting with each other or they are asking you out on a date. You haven't put a ring on it yet.

So how do you follow up and take this type of buyer through the customer journey to making an offer?

There are a couple of paths the journey can take. A lot depends on whether it's inbound interest, interest sparked by your efforts, as well as whether you are beginning the process yourself versus using a banker or broker from the start. There's also the question of who the buyer is and how big the company is (a startup versus a Fortune 500 company) and your prior relationship.

Assuming you are handling the direction of most of this follow-up yourself, some of the ways to proceed include the following.


There are a variety of ways to use email to follow up. If you have personal contacts with real dealmakers, it doesn't hurt to drop them a line or two now and again to re-trigger the conversation.

You can also leverage Gmail ads to show up in their inbox and help keep you top of mind. This will also keep positioning your company as one they should be taking under their umbrella as an asset.

Email newsletter updates can also be powerful. Add them to your best-fitting lists. If the individual(s) are already investors in your company, use that angle.

You may also want to create and send corporate newsletters that include vendors, partners, and others in your space. In a newsletter, it's easy to drop in metrics, company news, and industry news that makes it obvious they should be pursuing the conversation more deeply and sooner rather than later.

Social Media Updates

Much of the same applies to social media as email. You can prioritize public social media updates that continue to position your company as an attractive acquisition. Post big data points, new partnerships and contracts, and upcoming developments.

You can use private social media groups that they may be a part of to post more business-relevant updates as well.

Or you can use social media to actually be social and reach out personally to others in the company and keep conversations going. DM them, like their posts, and ask questions.

Phone Conversations

If you're both the type of people who actually answer the phone, then it certainly wouldn't hurt to just call and say hi to the lead contact or decision-maker. In this regard, the decision-maker is typically the CEO, the head of corporate development, the head of business development, or the person who leads the division that has direct synergies with your business.

You can ask the person directly if he or she has had any more thoughts about the idea. Or you can float a new idea you have for testing a partnership or collaboration.

You can be more subtle and ambiguous and ask for advice on upcoming decisions. Or you could simply try to arrange an opportunity where you can get together to develop a personal relationship further.

Maybe you are hosting an event, maybe you're in town and want a restaurant recommendation, or maybe you have extra tickets to a game.


M&A deals are traditionally the end result of multiple meetings, most of which have traditionally been in person.

Regardless of the immense travel time and cost burden involved, it doesn't hurt to have a series of lower-level meetings to explore the idea and present your pitchbook.

In truth, although online meetings do lack some of the personal connection we've had the luxury of in the past, virtual meetings are far more efficient and cost-effective for all sides.

This is important: When you do your follow-up, don't spam them to death. Always try to add value.

Finding the Decision-Maker

As with any type of sale, unless you are dealing with the decision-maker, you are typically just wasting your time.

Consider classic purchasing scenarios in which leaving out a key decision-maker in a sales presentation is virtually guaranteed to be a bust.

This isn't new. Those who've been around long enough to remember the days of cold calling or door-to-door sales might remember salespeople asking if the parents were home. Why? Because the kids in the house didn't have the power to make the choices. They didn't have their parents' checkbook, and they weren't the ones making the calls on buying a new vacuum cleaner or insurance.

In the case of car sales, home sales, or mortgages, salespeople don't want to have conversations without all the decision-makers in the room.

First, this enables them to read their prospects far better and tailor the pitch correctly. Second, it is just burning time unless a decision can be made on the spot at the end of the pitch.

If a person goes to the car dealer and gets super excited about the latest sports car, the salesperson is wasting their time if the spouse has that person on a tight budget and is insisting on getting a sensible minivan instead.

The whole process will have to start over again from scratch when the spouse can make it into the showroom. The same applies to buying or financing a home in which all buyers have to agree and sign to make it a legal contract.

A variety of people may heavily influence the ultimate decision to follow through with a merger or acquisition.

They may not all have the final say or a game-changing vote, but their input can make or break it. Or at least help rather than hurt. The further you get up the decision chain and convince the real dealmakers, the easier everything will go.

C-Suite Executives

Aside from other major shareholders, this is where the real decision-making power is.

If the founders and management are smart, and they've surrounded themselves with a good, well-aligned board and investors, and they have good relationships with them, then, if you win the C-suite, you can breeze through the vote.

You can imagine if Steve Jobs loved you and knew you personally and told his team he wanted them to buy and integrate you, the deal would probably get done.

Corporate Development

Big companies often have dedicated corporate development departments.

It's this department's job to be out there searching for deals every day. There is a good chance you'll first get an email or phone call from this group.

It may be of the department's own volition, or in some cases, it may be at the direction of someone higher up. The department is doing the legwork to research, set appointments, and see if there is a potential fit.


Internal and external advisors can have a big impact, too. Founders and CEOs should be following their advisors' guidance. If you win the hearts and minds of these influencers, it can be an excellent path to the real decision-makers and an easier transaction.

Transaction Leads

Someone on the buy side will be tasked with taking the lead on the transaction, before, during, and after the close. The person may not carry the big decision power of CEOs, CFOs, and advisors, but he or she can certainly derail the deal if that person doesn't like you or doesn't see the attractiveness of the deal.

Business Unit Leaders

Once your company is acquired, it will be rolled into one of your buyer's business units. Business unit leaders are sometimes unaware of these deals being made or have little say in them. Yet they will greatly (if not totally) determine what happens to your company after the closing.

After the acquisition is complete, you want to have a good communication flow with business unit leaders because you need them up to speed in order to ensure a successful integration. Otherwise, the entire acquisition could end up being a failure and put in jeopardy any of the potential incentives for you and the team that were agreed on as part of the acquisition.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.