After three months of tire-kickers, I finally have a serious buyer sniffing around. But before I hand over my customer list and supplier contracts, I need to make sure they're not just fishing for info. Here's my checklist: 1) NDA signed before any real talk. 2) Proof of funds (bank letter). 3) They must explain their integration plan in writing. 4) No direct contact with my team until LOI. 5) Background check on their previous acquisitions. What am I missing? Or am I being too paranoid?
Selling
My checklist for vetting buyers before sharing secrets
Not paranoid at all. I'd add: check if they've signed NDAs before and whether they've ever been sued for breach. Also, ask for references from sellers they've bought from. You'd be surprisEd how many 'buyers' are just competitors.
Proof of funds is key. I once had a guy flash a screenshot of a bank account that turned out to be his personal checking with $12k. Learned my lesson.
Your checklist is solid, but #4 might scare off legit buyers who want to see culture Fit. Maybe allow a supervised tour without direct contact? Just a thought.
I'd also make sure they sign a non-solicit. Last thing you need is them poalching your key employees after the deal falls through.
SkepticalSue makes a good point. But culture fit can be assessed after LOI. Before that, it's just a fishing expedition.
This is all way over my head, but I'm selling my small home health agency and this thread is gold. Thanks for sharing!
One more: verify thier email domain. If it's a gmail, that's a red flag for a serious buyer. Also, never share financials until they've shown proof of funds. I've seen too many people get burned.
TacoTuesday99, that's a bit extreme. Plenty of legit buyers use gmail initially. But I agree on proof of funds first.
Also, consider a watermark on any documentS you share. And keep a log of what you sent to whom. Saved my butt in a lawsuit once.
Watermark is smart. I'd also recommend a reverse due diligence on the buyer's key people. Check their LinkedIn for job hopping and see if they've left a trail of failed deals.