How My Own Sale Actually Started…With a Casual Chat Over Drinks
My second company sale did not start with a valuation discussion or a formal outreach email.
I already knew a fair amount about the firm in Northern California before they ever approached me. A partner account manager who worked closely with them gave me insight into how they operated, the products they supported, the size of their team, and the fact that they wanted to expand into other parts of California.
Even with that information, I was uncomfortable simply calling them up and asking questions. I did not have a clear contact person in mind, and I was very aware of how easily early conversations can create the wrong impressions.
But, as it turned out, they were just as interested in me.
We both happened to be attending a Microsoft event, and one evening we found ourselves talking at the bar after the formal sessions were over. The environment was relaxed, leading to more candid conversation. That person ultimately became the internal champion for the acquisition.
Looking back, what mattered most was not that we talked about numbers (we didn’t). What mattered was that we established an initial relationship and continued it through follow-up phone conversations over time. Each conversation allowed us to learn more about how each of us thought, how we operated, and whether there was real cultural alignment.
Only after we were both confident that there was a strong cultural fit was I willing to sign an NDA and discuss my financials in detail. By then, trust already existed.
The deal did not start with an Letter of Intent (LOI). It started with the right conversations (albeit casually at a bar).
Why the Real Negotiation Happens Before the LOI
Most business owners believe the real negotiation starts when the LOI arrives.
It does not.
By the time an LOI shows up, the buyer has already decided how they see your business, how risky they believe it is, how involved they expect you to be after closing, and how much leverage they think they have. The LOI simply puts those assumptions into writing.
What largely shapes those assumptions are the conversations that happen before anything is formal. And more specifically, the questions you do or do not ask.
Initial conversations with buyers tend to feel casual. Exploratory. Low stakes. That is exactly when sellers tend to lose control of the narrative.
What Questions Should I Ask a Potential Buyer?
Below are key questions that every seller should ask during early buyer conversations to evaluate fit, drive the process, and better control the story around your company.
(Spoiler: I’ve compiled all of these questions into a handy Early Buyer Conversation Checklist that you can reference before every buyer call. Be sure to download it after you read about the strategy behind it all below.)
Start by Framing the Conversation
Instead of answering questions immediately, savvy sellers start by framing the conversation itself. Two simple questions make an enormous impact early on:
- “What prompted your interest in us at this stage?”
- “What would make this a successful exploration for you?”
Before an LOI, buyers are still deciding what kind of opportunity this is. Strategic or financial. Platform or tuck-in. Urgent or optional.
These questions surface motivation without confrontation. You are listening for timing (as we all know: time kills all deals), certainty, and language around true fit versus optional growth. That context should shape everything that follows.
Assess Goals and Hurdles
Buyers reveal their deal thesis long before they reveal price. Most sellers miss this because they focus on answering instead of listening.
Questions like these are critical early in the process:
- “What problem are you hoping an acquisition like ours would solve?”
- “Where do you see the biggest risk in deals like this?”
If a buyer immediately talks about integration risk, expect structure constraints. If they focus on customer concentration, expect holdbacks. If founder dependency comes up early, earn-out pressure is likely coming.
You cannot eliminate risk, but you can decide which risks you tackle proactively and which ones you allow to define the deal. As an M&A advisor, I ask these questions to determine fit and understand what needs to be addressed before terms ever appear.
Control the Timeline or It Will Control You
Time pressure almost always benefits the buyer…unless the seller manages it.
Unfortunately, one of the biggest mistakes founders make pre-LOI is avoiding timeline questions because they do not want to appear pushy.
But seeking clarity is not the same as applying pressure. So, be sure to ask:
- “What does your internal decision timeline look like?”
- “Who needs to be aligned before an LOI can be issued?”
- “Are you working on other acquisitions now and how long will those take to finalize?”
Pre-LOI drag often signals internal disagreement, weak conviction, or option-shopping. None of those are necessarily deal killers, but they are things you need to know before you continue sharing information and energy. These questions force clarity without sounding impatient.
Protect Yourself from Silent Re-Pricing
This is where sellers lose millions quietly. Before financial discussions get deep, you need to understand how the buyer thinks about value adjustments. Ask:
- “How do you handle a sell-side QofE with our own normalizations and adjustments?”
- “What usually causes value to shift between first look and LOI?”
Buyers almost always have an internal EBITDA range, a working capital assumption, and a view on adjustments. If you do not surface those assumptions before the LOI, they will show up inside it. And once they are on paper, your leverage drops significantly. This may help you determine if you need to get a Quality of Earnings report prepared in advance of giving them any numbers.
Reframe Risk as Shared, Not Seller-Owned
Many buyers unconsciously frame early conversations as a test.
Convince us your numbers are real.
Convince us your business is durable.
You can shift that dynamic with a simple change in posture:
- “What would you need to feel confident standing behind your offer?”
- “Where have past deals surprised you after signing?”
This moves the conversation from proof to alignment. It positions you as a credible counterparty who understands how deals actually work, not a defensive seller trying to justify their business.
Understand Structure Before It Is Papered
You do not need to negotiate structure pre-LOI, but you do need to understand it. Ask:
- “How do you usually think about founder continuity post-close?”
- “What does a great outcome look like for you on this deal?”
Earn-outs, rollovers, and retention hooks are often emotional decisions disguised as financial ones. These questions frequently reveal how much risk the buyer expects you to carry, how much control they want to retain, whether you leaving within the first year would reduce the valuation, and whether alignment is real or theoretical. If you wait until the LOI to learn this, it is already too late.
Remember That You Are Evaluating Them Too
Prepared sellers establish that dynamic immediately. Thoughtful, specific questions signal seriousness, experience, and selectivity:
- “How does this compare to other platforms you have acquired?”
- “What did you underestimate in your last integration?”
- “What surprised you most about scaling this company?”
Buyers behave differently when they realize they are being evaluated too. Especially if they get a hint that they are not the only buyer you are speaking with.
Flush Out Issues Before They Become Value-Destroyers
One of the most dangerous phrases in M&A is “we will figure that out later.”
“Later” usually means “during diligence,” which can result in changes in structure or even retrades. So, get some of the issues out on the table in advance:
- “If we were to move forward, what would be the first hard issue to solve?”
- “What tends to slow deals down at this stage?”
These questions flush landmines while leverage still exists.
Don’t Waste Time with Non-Serious “Buyers”
Not every interested party is a legitimate, viable buyer, especially if they are not a private-equity-backed firm. Therefore, you want to diagnose commitment before getting in the weeds:
- “Is this something you are actively pursuing now or monitoring for the future?”
- “What would cause you to lean in more decisively?”
Founders who misread curiosity as intent tend to over-share, anchor low, and lose negotiating posture early. Optionality is leverage. Protect it.
The Seller Reality Check
After every pre-LOI conversation, ask yourself three questions:
- Did I learn more about their constraints than they learned about mine?
- Did I clarify motivation, risk perception, and timing?
- Did I move the conversation toward alignment or accommodation?
If not, the process is drifting toward a buyer-led deal, and you need to do something to reel it back in if you want to maintain control of the transaction.
The Bottom Line
The most successful deals are not won through clever LOI redlines. They are won by asking better questions and having better conversations before the LOI exists. That is where leverage is built, narratives are formed, and outcomes are quietly decided.
I saw this play out firsthand in my own second company sale. By the time we even discussed an LOI, the hard work had already been done. The trust was there. The cultural fit had been tested. We understood how each other thought, how decisions were made, and what a successful outcome actually looked like for both sides.
That only happened because the relationship started with the right conversations at the right moment in the right setting. Not a cold outreach. Not a spreadsheet. A conversation that allowed both sides to ask questions, listen carefully, and decide whether it even made sense to go further.
Only after that foundation was in place did we sign an NDA and talk specifics. And by then, there were very few surprises left. The LOI did not create alignment…it reflected it.
That is the advantage of doing this work early. You are not trying to win a deal. You are making sure the deal you end up with is the right one.
But one last word of caution. Do not let one buyer consume you. While it seemed like I was only speaking with them, I maintained leverage by carrying on two other conversations just in case this one didn’t get me to the number I was looking for.
Want This Exact Question List?
If you are thinking about selling in the next few years, do not rely on memory or improvisation in these early conversations.
I have put together a concise Early Buyer Conversation Checklist you can use before every buyer call. It includes the exact questions covered here, organized so you can quickly identify intent, risk, timing, and fit.
Download the checklist and keep it handy. The right questions asked early can change the entire trajectory of your deal. Good luck!
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