14 Questions You Should Ask Buyers

Choosing a buyer to sell your company to is one of the most important decisions you can make. During a transaction process, potential buyers will be digging into the company, requesting data and asking questions to learn more about the business and you personally. What many sellers don’t realize is that the diligence phase should be a two-way street. This is also your time to get to know potential buyers and confirm that you can see yourself working with them harmoniously in the future. Use this time to ask your own questions, making sure you and the buyer are aligned on the points that matter to you.

Below, we’ve shared examples of questions that we think sellers should be asking buyers. While not a comprehensive list, these will start to give you a true picture of the buyer’s process, values, and how the future could look once the sale is complete.

  • Are the team members we’ve been communicating with prior to receiving a letter of intent the same people making the decision to invest or not, or will additional approvals be needed from others on your team who haven’t been involved yet?
  • What is your closing rate (i.e., what percentage of transactions in which both parties signed the letter of intent make it across the finish line)?
  • How are you funding the transaction?
  • What does the timeline look like for the transaction? How quickly will your team turn documents or comments at each step in the process?
  • Who will be involved from your team post-closing?
  • What level of involvement will you have post-closing?
  • What is the normal cadence and style of the relationship between you and a company’s management team post-closing?
  • How do you aim to add value to your partner companies post-closing?
  • How do you see the composition of the board post-closing?
  • What is your culture? Specifically, how does your team behave when things are going well and when things are difficult? (Ask for specific examples here.)
  • How do you think about a future exit from a timing standpoint?
  • What’s the most challenging investment you’ve made and why? How did you respond and how did you work with the management team?
  • How often have you had to replace the CEO of one of your partner companies and why?
  • Could you introduce me to some references from current or prior partner companies at the right time during due diligence?