There is no getting around the fact that it takes a lot of effort to close an acquisition at attractive terms. Even when a good offer appears unsolicited, there is still an incredible amount of work required to reach close, especially while avoiding price dilution along the way. Sellers frequently underestimate the amount of preparation work, attention to detail, and responsiveness required. Even the most operationally mature organizations require considerable effort to identify a buyer and successfully undergo due diligence.
Why Due Diligence Is the Hard Part
M&A is typically thought of as “finding a buyer at the right price”, but from a level-of-effort perspective, this is the easy part. Once terms are agreed, due diligence begins, and this is the surprising consumer of time and resources. The buy-side team of seasoned M&A professionals will spend considerable time establishing:
- Whether the target is one they actually want to acquire: from a strategy, size, skills, culture, and overall fit perspective
- Whether the agreed price and structure still makes it an attractive target after deeper examination
- Whether there are any liabilities, on or off balance sheet, they would not want to assume
- Whether the business is as represented in terms of clients, contracts, margins, employees, and IP
- Whether organizational maturity levels can support the envisioned scale
- Where this acquired business fits within their existing organization
Every seller should be prepared to dedicate a substantial portion of a key leader’s time to managing the process. When working with sell-side advisors like Bravery Group, this largely means interfacing with internal teams to pull together requisite materials, while advisors manage the primary interface with the buy-side.
The Four Stages of the M&A Process
Bravery Group’s Intrepid Methodology organizes the process into four distinct stages. Each has well-defined inputs, outputs, and decision gates:
Stage 1: Strategy
Go-to-market approach (targeted vs. broad), buyer universe development, CIM creation, financial preparation, and pre-staging of due diligence materials. The foundation for everything that follows.
Stage 2: Marketing
Outreach to prioritized buyer list, NDA execution, CIM distribution, management presentations, and preliminary offer solicitation. The objective is competitive tension and informed buyer interest.
Stage 3: Diligence
Letter of Intent execution, virtual data room management, buyer due diligence, advisor negotiation on behalf of the seller, and purchase agreement drafting. The most resource-intensive stage for the seller.
Stage 4: Close
Final legal documentation, regulatory filings where required, closing conditions, funds transfer, and transition planning. The culmination, but not the end of the seller’s obligations.
The Non-Binding Offer Convention
Because of the effort and expense involved on both sides, neither party would proceed with due diligence unless they are very close on deal terms. However, to reach this stage, a buyer is essentially being asked to value a business they know relatively little about beyond the CIM and management presentations. This impasse is resolved by the convention that all offers are non-binding: a buyer can rescind if they find something materially misrepresented or omitted.
This non-binding nature of an offer is often surprising to sellers, but it is a convention that serves its purpose well. It allows the process to move forward efficiently while protecting buyers from committing to a price based on incomplete information. Sellers who understand this manage the diligence process proactively rather than reactively.
The best preparation a seller can make is to get ahead of diligence requests before the process starts. Advisors who know the category can stage materials that buyers will inevitably ask for: compressing timeline and demonstrating operational maturity.
What Separates Good Processes from Great Ones
The difference between a good M&A process and a great one is typically not the quality of the business; it’s the quality of the preparation, the consistency of the narrative, and the advisor’s ability to manage buyer psychology throughout the process. Competitive tension among multiple buyers is the single most reliable driver of premium outcomes. Creating that tension requires both a well-curated buyer list and an advisor who knows how to run a process that sustains it.
Bravery Group’s Intrepid Methodology is designed around these principles, ensuring that every stage of the process is managed with precision, that the seller’s story is told consistently and compellingly, and that buyer commitment is built gradually rather than demanded prematurely.