SPRING 2025
guarded assets of the seller. The buyer needs to see it,
but you don’t want to disclose this until you know that
you’re dealing with the decision-maker, and that the
main points of the deal are pre�y much hammered
out. In fact, were we to receive such a request prior to,
at minimum, an executed le�er of intent, we would
advise our client to refuse it.
Until you know you’re working with the actual buyer
- or, at the very least, someone with the authority to
bind the acquiring company contractually – you just
can’t risk pu�ing your client’s most important assets
on the table.
It is not unheard of that competitors will purport to be
buyers when what they’re really a�er is competitive
intelligence. They want to learn what your client is
doing right; who they’re selling to; what their cost
and price structures are; what they’re paying their
employees (perhaps in the hope of stealing the best
ones); what their marketing plans are.
THE BOTTOM LINE
We have to know who our buyer is and that they are
able to do what they say they can do. In the case of
a financial acquisition – individual buyers of most
Mom and Pop businesses – that means ge�ing proof
of financial capability before we start disclosing our
client’s details.
In the case of a strategic acquisition, we advise our
brokers to secure one or two documents from the
buyer: the acquiring entity’s organizing document
listing the owners (if necessary, the specific identities
can be redacted) and a resolution – corporate,
membership, partnership as appropriate – showing
that the person we’re dealing with has been
authorized by the acquiring owners to bind the
acquiring company contractually.
Selling a business is an undertaking that is full of
potential pitfalls and stumbling blocks. If you’re
working with anyone other than the ultimate decision
maker, you run the risk of the deal cratering without
knowing why and without the opportunity to resolve
the buyer’s concerns. If both parties want the deal,
a solution can be found. But that means we have to
know the actual buyer.
And if there’s pushback from any buyer about
providing the simple evidence you request, either the
people you’ve been talking with are blowing smoke or
there’s really no serious interest from the people that
actually count.
JOE CAFFREY | CBI
jcaffrey@WorldwideBusinessBrokers.com
You have to know how
to balance your desire to
get the deal done with the
caution necessary to protect
your client.