The buyer is not the only table you have to win.
Co-founders, investors, a board with a veto, a fund with a clock that is not yours. When ownership is more than one person, a sale is two negotiations: the one with the buyer, and the one inside the cap table. Here is how we run the second so that the first can succeed.
One call, and you leave with the plan your board will ask for: timeline, buyer-universe estimate, how and when the valuation range is built, reporting cadence, and how we are paid.
What your board receives, and when
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Before the mandate: the process plan.
The four movements on a page, the timeline as we plan it, the buyer universe as we see it and how we sized it, an indicative valuation range with its downside case (the full valuation is built in month one of the mandate), the confidentiality architecture, and the fee structure in writing. It is the document your directors will want before they vote, and it is the same document we hold ourselves to afterwards.
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During the process: a written weekly.
Who has been approached, who has signed the NDA, who is in the data room, who has gone quiet, and what we are doing about it – with the engagement read stated as known, observed or inferred. Directors should never learn the state of their own sale process from the founder’s memory of a phone call.
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At offers: a bid tabulation the board can actually compare.
Every offer decomposed the same way – cash at close, deferred, contingent, rollover, retention, adjustments – and run through the waterfall so each director sees what their class receives, not just the enterprise value. Price and structure side by side, certainty weighted rather than assumed, because the highest headline is not automatically the best offer for anyone in the room.
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At signing: a process record.
Who was contacted, what they saw, what they offered, and why the winning bidder won. A board that approved a sale should be able to show it ran a defensible process – to its own investors, and to anyone who asks later.
Enterprise value is not everybody’s outcome.
When a sponsor, a board and a management team do not have identical economics, the differences are made explicit before market, not discovered in the buyer’s first draft. Founder proceeds, the preference stack, management rollover, the employee pool, the investor’s return, the sponsor’s timing and post-closing employment are different ledgers that a single headline number hides.
We model the transaction economics for every class of ownership and put the result in front of the board as one table. Where personal interests diverge, the founder or executive should hold their own legal and tax advice – and we will say so early, because a process in which one party discovers late that it was not the client is a process in trouble.
When the sponsor is the seller. The sponsor is our client; management’s economics are modelled in the same table, and management should hold its own advice.
Who can actually decide. The answer is in your shareholders’ agreement, your articles and the applicable law, not in the commercial logic: board approval, shareholder thresholds, drag-along and tag-along, preference rights and investor vetoes can make the economics and the decision authority two different questions. Counsel owns the legal answer; we map the decision path, and who has to be persuaded in what order, before we go to market.
“Our investors want a full auction.”
Sometimes they are right. Sometimes an auction is the most expensive way to find the one buyer who was always going to pay the most. Here is the argument as we would make it in your boardroom, with the evidence we would put on the table.
Competition prices a company; a process is how you find out what it is worth to the buyers who could rationally want it. But competition does not require a broadcast, and a broadcast is not free: the largest bid-level study we know of on how companies are actually sold – 841 US public-company transactions, read bid by bid from their SEC filings – found that seller-initiated auctions that failed to attract competition closed at premiums roughly fifteen points lower than deals that never advertised a process at all.1 In that sample, a process that visibly failed to draw competition went with a worse price than no process at all. The lesson is narrower than a law, and it is two-sided: competition matters, and broadcasting a process is not free. So the question for a board is not “auction or negotiation” – it is how many buyers can be approached with a credible thesis and held in real competition, without the market learning that the company is for sale and did not go. That number is a property of your buyer universe, not of anyone’s preference, and we will show the board how we sized it.
Your management team, and the people who work for you
The management team has an outcome of its own in this transaction, and a buyer will negotiate it – retention pools, stay bonuses, rollover for key managers, option treatment – whether or not you have thought about it first. We would rather it was on the table on your terms, as part of the structure, than discovered in the buyer’s first draft of the agreement. How retention and rollover interact with price →
Employees learn about a sale in one of two ways: from you, in a sequence you planned, or from a rumour. The communication sequence – who is told, when, and what they are told – is designed with you before market, alongside the confidentiality protocol. Where the company has a works council or other consultation obligations, the timing of that consultation is a legal question your counsel will lead, and it belongs in the process plan from the first week, not in the last. How the secret is kept →
1 Liu, Officer & Tu, hand-collected bid-level SEC data on 841 completed US public-target deals, 2005–2019: target-initiated auctions that failed to attract competing bidders closed at premiums about 15 points lower. Public-company evidence; the mechanism, not a number for a private European company. Sample and limitations on the Strategic Value Dispersion page.
Bring your board. We would rather start with everyone who has a vote.
This page is written to be forwarded – to a chair, a lead investor, a CFO or counsel (). One session with the founder and the directors who will approve the sale. You leave with the process plan, the buyer-universe view, and the fee structure in writing – the three things a board asks for first.