Someone wants the company. That is the useful part of an unsolicited offer. The number in the email is the part that feels urgent and usually is not finished.
The short answer: reply within a couple of days, and reply without numbers. Thank them, name a date you will come back, and ask who the buyer is. Share revenue, customer names, or a counteroffer only after a confidentiality agreement and after you know what the business is worth without them in the room. The first figure almost always moves. An indication of interest is a written version of that figure. It is a conversation. A deal is a signed purchase agreement with the money arranged.
Owners search this the week the email arrives: an unsolicited offer to buy my business, often an unsolicited offer from private equity. The same rules cover a competitor, a customer, or a local buyer who “heard you might be thinking about it.”
This article is not legal advice. A confidentiality agreement and any promise of exclusivity should be read by counsel before you sign them.
Why the First Number Is Almost Never the Last Number
The buyer built that number on a thin file. A website, a database, a trade-show conversation, maybe a rumor about revenue. Private equity associates send hundreds of these notes a year. A strategic buyer may know your customers and still be guessing at your margin. The sentence “we could see a value of $12 to $16 million” is a range wide enough to start a meeting. It is not a check.
Three things hide inside the first number.
The information is incomplete
They do not have your add-backs, your customer concentration, or the contract that renews next March. When they do, the price moves. Sometimes up, when the earnings are cleaner than they guessed. Often down, when a quality of earnings review pulls out the owner’s personal expenses they had already counted as profit, or when one customer is a third of revenue. What a large buyer will actually pay for is the book they can underwrite, which is narrower than the story on your home page.
The structure is doing quiet work
“Twelve million” might mean $7 million in cash, a seller note, an earn-out you have to stay to collect, and a rollover you cannot sell. The headline is the same. The money you can spend is not. How a buyer finances a $10 million acquisition is the stack behind a number that looks round. Rollover equity and a second bite is what a private equity note means when it says you will “stay in.”
The number is also a tactic
A low figure trains you to negotiate against their anchor. A high figure is the one owners trust too fast. A number that feels generous is often the price of exclusivity: sign this, stop talking to anyone else, and we will “confirm” the value in diligence. Confirmation is where the price comes down, after you have told your family you are selling and after every other buyer has gone cold.
You can move the number too, and you can move it the wrong way. Replying the same day with “we would need $18 million” hands them a ceiling. They will now spend the process trying to get under it. A valuation you trust, prepared before you counter, is the number you negotiate from. Their email is not that valuation.
On a larger company the same email is the start of a different process. What changes when a sale crosses $20 million is the buyer, the earnings definition, and the diligence. The discipline is the same at $4 million and at $40 million: do not treat the first sentence as the price.
The 48-Hour Response
Silence reads as fear or as a brush-off. A same-hour reply with your revenue reads as a gift. The useful response sits in between. Two days is enough to be courteous and enough to keep you from typing the wrong paragraph at 10 p.m.
Before you write anything, sort the note into one of three piles.
A named principal
A fund, a company in your industry, or an owner you could look up. Worth a real reply.
An associate or a banker fishing
“We partner with capital and are interested in businesses like yours.” There may be a buyer behind it. There may be a list of five hundred owners. You can reply and ask for the buyer’s name. You do not owe them a management meeting.
A blast
No name, no number, a link to a calendar. A short decline, or no reply, is fine. Politeness does not require a tour of the plant.
For a real buyer, the reply has five jobs: acknowledge them, give a date, identify who they are, refuse data, and keep the door open. Here is language you can adapt. It is a starting point, not a form to sign.
> Thank you for the note. I received it and I am the right person.
>
> I am not in a position to share financial information or discuss a price this week. I will come back to you by [a date about two weeks out] after I have spoken with my advisor.
>
> So that conversation is useful, please tell me who the buyer is (the fund or the company, not only the advisor), whether you have closed acquisitions in this industry, and whether the figure in your note is cash at closing or a range that includes a note, an earn-out, or equity I would keep.
>
> If you want anything beyond what is already public, send your confidentiality agreement and I will have it reviewed. I will not send customer names, employee names, or financial statements before that.
That note does not kill a serious buyer. A fund that walks because you asked who they are was never going to close. A competitor who insists on customer names before an NDA is collecting intelligence. Let them insist.
What you leave out matters as much as the sentences you send.
- No revenue, EBITDA, backlog, or “we did $9 million last year.”
- No customer, supplier, or employee names.
- No counteroffer and no “we’d never sell for less than…”
- No promise of exclusivity, a visit, or a management meeting this week.
- No forwarding of the email to a manager “just so you know.” The people who can hear it are a spouse, counsel, and an advisor who sells companies. Staff hear it later, on purpose, if you decide to run a process. Client concentration and key-person risk get worse when the staff who hold the relationships start interviewing.
A confidentiality agreement is the gate, and it is a weak gate if you treat it as a formality. Read who is bound, how long it lasts, and whether they can share your file with lenders and partners. A strategic buyer who competes with you needs a tighter agreement than a financial buyer two states away. Even after it is signed, the first package is a short overview. The full file comes when they have earned it and you have decided a conversation is worth the leak risk.
If you already know you will not sell in the next few years, you can say that in the same 48 hours. “We are not considering a sale” is a complete answer. You do not owe a meeting to prove it. Keep the note. Buyers who were serious often write again in a year, and a clean decline ages better than a sloppy data dump.
When to Run a Process Anyway
One interested buyer feels like a market. It is a data point. A process is how you find out whether anyone else would pay more, pay cleaner, or treat your people better. It can be quiet. It does not have to be a public listing or a story in the trade press. Who you hire to run it — a Main Street broker or an M&A advisor — should match the buyer you need, not the title on the proposal.
Run a process when any of these are true.
The number is in a range you would actually consider
If $12 million would change your life and their range includes $12 million, you are already in a sale conversation. The expensive mistake is negotiating it with only one party. A confidential outreach to a short list of financial and strategic buyers tells you whether $12 million is the bid, the ceiling, or the floor. Private equity versus a strategic buyer is the comparison that list should include, because they do not pay for the same things.
They want you to stop talking to anyone else
Exclusivity is reasonable after a real letter of intent, for a limited number of days, with a price and a structure you understand. Exclusivity on the strength of an email is how a single buyer becomes your only buyer. If they need exclusivity this early, that is the moment to widen the conversation, not shrink it.
You do not have your own number
Their range will fill the vacuum. A valuation and a look at what the next 12 to 36 months of preparation would change are cheaper than finding out in diligence that you left money on the table.
The buyer is a competitor or a customer
The information risk of a one-on-one conversation is higher, and so is the chance they are shopping. A controlled process, with a tight NDA and a staged release of names, is safer than a private plant tour “to see if there’s a fit.”
You were already within a couple of years of an exit
An inbound offer is a reason to start on your timing, with this buyer as one name on the list. Exit planning is that timeline. The offer did not create the decision. It revealed that someone else is on a clock too.
A process has a cost. It takes management time. A poorly run one teaches the market that you tried to sell and did not. That is why “run a process” means a prepared, confidential approach, not a forwarded email to every broker in the state.
Skip the full process in a few specific cases.
The note is a blast and there is no buyer
Asking for a name is enough. Building a data room for a mailing list is how confidential information ends up in a slide someone else is using.
You would not sell at a price you consider rich
Take the valuation if you want a baseline. Decline the meeting. A process you are unwilling to finish wastes the buyers you may want in three years.
The company cannot survive diligence yet
Books that a buyer cannot tie out, a lawsuit you have not disclosed, or a key contract that expires in ninety days will reprice any offer you start from. Fix the file, then talk. Due diligence is where an unsolicited number goes to be rewritten.
You can keep the inbound buyer warm while you do this. The line is simple: you are evaluating the business and you will give them a clear answer on a date. Serious buyers wait a few weeks. Buyers who demand a yes by Friday are buying your lack of alternatives.
An Indication of Interest Is Not a Deal
After the first call, a buyer may send an indication of interest, an IOI. It looks like progress. It has a logo, a range, and the words “we are pleased to submit.” Read it as a letter of intent’s younger cousin, and remember that a letter of intent is still not a closing.
| What you are holding | What it actually is | What you should not do with it |
|---|---|---|
| A one-paragraph email with a number | A conversation starter | Reply with your financials or a counter |
| An indication of interest | A non-binding range, based on limited information, almost always “subject to diligence” | Grant exclusivity or tell employees you have a deal |
| A letter of intent | A fuller non-binding price and structure, often with a binding exclusivity period | Treat the price as cash in the bank |
| A signed purchase agreement with financing in place | A deal, still subject to the conditions in that agreement | Assume it cannot be renegotiated before closing |
An IOI usually includes a valuation range tied to EBITDA they have not verified, a sentence about cash versus rollover, a wish list for the next round of information, and a request that you work only with them. It usually does not include a working-capital target, a treatment of debt, an escrow, the reps you will sign, or a lender who has said yes. Those arrive later, and each one can change the money.
“Subject to diligence” means the number is a hypothesis. “Subject to financing” means they may not have the money. “Subject to investment-committee approval” means the person who emailed you cannot bind the fund. All three appear in ordinary IOIs. None of them is a reason to panic. All three are reasons to keep your options open.
The expensive clause is exclusivity this early. Thirty or forty-five days of exclusivity on an IOI lets them learn your customers and your margin while every other buyer is told to wait. If the IOI then becomes a lower LOI, you have lost the weeks in which a second bidder would have kept them honest. Trade exclusivity for a specific price, a specific structure, and a calendar — and trade it at the letter-of-intent stage, for a short window, after you have seen who else is real.
A letter of intent is further along and still not cash. It should pin down what the IOI waved at: cash at closing, note, earn-out, rollover, and what happens to stock versus assets. Earn-outs and holdbacks belong in that document in dollars, not in a footnote that says “to be discussed.” Owners who celebrate an IOI at dinner find out at the LOI that a third of the price depends on next year’s EBITDA, which the buyer will help calculate.
Between the IOI and a signing, assume the price will be discussed again. Working capital, quality of earnings, and a customer who slips during the process are the usual reasons. That second discussion is normal. It is less painful when you still have another buyer, and when you have not told the shop the company is sold.
What to Do This Week
- Save the email and do not forward it inside the company.
- Send the short reply within 48 hours if the buyer is real. Ask who they are. Set a date. Refuse data.
- Have counsel look at any confidentiality agreement before you sign it.
- Get a valuation that does not start from their number.
- Decide, on purpose, whether this is a decline, a one-buyer conversation you can afford, or a quiet process in which this buyer is one name on a list.
- Do not grant exclusivity on an email or an indication of interest.
If the offer is real enough to answer, it is real enough to test. Bridge Point can tell you whether the number is a conversation or a ceiling, and can run a confidential process so you are not negotiating alone. Start with a business valuation, M&A advisory, or contact us. Call (352) 515-0226.
Frequently Asked Questions
What should I do with an unsolicited offer to buy my business?
Reply within about 48 hours without sending financials or a counteroffer. Thank them, set a date to come back, and ask who the buyer is. Share numbers only after a confidentiality agreement and after you have your own view of value.
Is an unsolicited offer from private equity a real offer?
Sometimes. A named fund with a range is a real buyer starting a conversation. A mass email from an associate with no principal behind it is outreach. Ask for the fund’s name, whether they have closed deals in your industry, and whether the figure is cash at closing.
Why does the first number change?
It was built on incomplete information, and the structure behind it — cash, a note, an earn-out, rollover — is often unclear. Diligence, a quality of earnings review, and working capital rewrite the price. A high first number is sometimes the cost of getting you to stop talking to other buyers.
Should I tell the buyer I am not for sale?
If you would not sell in the next few years, say so. A clear decline is a complete answer. If the number is in a range you would consider, “we are not running a process this week” is the truer sentence, and it leaves you room to come back with an advisor.
When should I talk to other buyers?
When the number is one you would consider, when they want exclusivity, when you do not have your own valuation, or when the buyer competes with you. A quiet process is a short confidential list. It is worth skipping when the note is a blast with no buyer, or when you would not sell at a rich price.
What is an indication of interest?
An IOI is a non-binding letter with a valuation range, usually subject to diligence, financing, and committee approval. It is not a deal, and it is thinner than a letter of intent. Do not grant exclusivity or tell employees you have sold the company because an IOI arrived.
Should I sign exclusivity on an inbound offer?
Exclusivity fits a letter of intent with a specific price and structure, for a short period. It is an expensive concession on an email or an indication of interest, because the buyer learns your business while every other option waits.
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