Sold my last company through a broker and felt like I was watching a tennis match. Now I'm selling a small e-commerce brand and want to talk directly to potential buyers. No broker, no M&A guy. What do I need to watch out for? How do you keep it productive without someone 'managing the conversation'? Appreciate any real-world tips.
direct talks
How to talk to buyers without an intermediary in the room
First thing: get an NDA signed before you share anything sensitive. Buyers will ask for revenue, customer lists, etc. A simple mutual NDA is fine. Don't let them talk you into skipping it because they're 'just exploring.'
Also, have your numbers ready. Without a broker to filter, you'll get tire-kickers who want a full data dump before they even confirm they hvae funds. Ask for proof of funds or a letter from their bank early. Saves you hours.
Proof of funds feels awkward. How do you ask that without sounding like you're accusIng them? I don't want to insult a serious buyer.
Just say: 'To make sure we're aligned, can you share a quick proof of funds or a bank letter before we dive into the financials?' If they get offended, they're probably not serious anyway.
I've done two deals without a broker. The hardest part is keeping the conversation from turning into a negotiation too early. Set an agenda before each call. Say 'Today I want to walk you through the business overview and answer questions. We'll save price for a separate conversation.' It feels a bit formal but it works.
Honestly, I'd still get a lawyer to review the LOI and purchase agreement. You don't need a broker, but you definitely need legal. Otherwise you might agree to something dumb in a direct chat.
One thing nobody mentions: record the calls if it's legal in your state. Or at least send a follow-up email summarizing what was discussed. Direct talks can get chummy and then you forget what was promised. CYA.
Good call on the follow-up email. I'll start doing that. Also, the agenda idea makes sense—I'll try it on the next call.
And don't be afraid to walk away. I wasted three weeks with a guy who kept saying 'my backers need more time.' No proof of funds, no deal. Learned my lesson.