Selling a private company means turning years of operating history into a price a buyer will pay, then holding that price through diligence until the money arrives. A well-run sale moves through seven stages, and for a prepared lower-middle-market company the whole sequence usually takes six to twelve months; the week-by-week timeline shows where those months go. Order matters because your leverage is greatest before a letter of intent is signed and tends to shrink once exclusivity starts.
What a business is worth comes down to normalized earnings times a multiple, and the add-backs behind that earnings figure are what a buyer’s accountants test. Those numbers then go into the teaser and the confidential information presentation, which are released in stages so that word of the sale does not reach employees, customers or competitors early.
Buyers come next, and they are not interchangeable. Who buys companies this size runs from private equity funds and strategic acquirers to family offices, search funds and independent sponsors, and each weighs price, control, speed and certainty of close differently. Whether you run a competitive process or a negotiated sale decides how many of them you hear from, and negotiating the letter of intent is where that leverage gets spent.
Not every sale is a full sale to an outside buyer. Selling to employees generally trades price for continuity, and a partial sale trades cash now for upside later. Most sales that collapse do so in the weeks between a signed letter of intent and closing; why deals fall apart covers the usual causes, from retrades to financing gaps.
Start here
- 1How to Sell Your Business: A Step-by-Step Guide (2026)Learn how to sell your business in 2026: the complete sell-side M&A process, valuation ranges, a realistic timeline, typical costs, and mistakes to avoid.
- 2How Much Is My Business Worth? Valuation Multiples by Industry (2026)How much is your business worth? Learn how SDE and EBITDA multiples work, plus typical business valuation multiples by industry for 2026, in this guide.
- 3The Business Sale Process Timeline: A Week-by-Week GuideA week-by-week look at the sell-side M&A timeline for lower-middle-market companies, from preparation and QoE through outreach, LOI, diligence, and closing.
- 4Who Buys Lower-Middle-Market Companies? A Guide to Buyer TypesA map of who buys lower-middle-market companies: private equity, strategics, family offices, search funds, independent sponsors, and holding companies.
- 5What Buyers Look For When Buying a BusinessWhat buyers look for when buying a business: the 10 screens on EBITDA, margins, concentration, and management depth, and how PE, strategics, and search funds differ.
Every article on this topic
- What Private Equity Firms Ask in a First Meeting With OwnersAn educational look at what private equity firms ask in a first meeting, from revenue durability and owner dependence to why the owner is selling now.
- Why M&A Deals Fall Apart, and How Sellers Reduce RiskWhy private-company M&A deals die between LOI and close: diligence surprises, retrading, financing gaps, working-capital and concentration issues.
- Financial Due Diligence (FDD) Explained: Add-Backs, Adjusted EBITDA, and Why It Sets Your PriceFinancial due diligence, centered on a quality of earnings (QoE) report, turns profit into adjusted EBITDA via add-backs: the number that sets your price.
- What Does It Cost to Sell a Business? Broker Fees, M&A Advisor Fees, and the AlternativesA clear guide to the cost to sell a business: typical business broker fees, M&A advisor fees, the Lehman formula, retainers, success fees, and newer options.
- The Teaser and the CIP: The First Documents Buyers SeeHow the anonymous teaser and the 30 to 80 page confidential information presentation (CIP/CIM) work, how they differ, and where each fits a sale process.
- Negotiating the Letter of Intent: Leverage Before ExclusivityHow sellers hold the most leverage when negotiating an M&A letter of intent, which LOI terms matter beyond price, and what exclusivity really costs.
- Private Equity Buyers Explained for Company SellersHow private equity buyers work for sellers: the leverage model, platform and add-on deals, hold periods, rollover equity, and life after the closing.
- Search Funds and ETA Buyers: What Sellers Should KnowHow search fund and ETA buyers work from a seller's view: target size, SBA and seller-note financing, certainty of close, and transition expectations.
- Family Offices as Buyers: Patient Capital ExplainedHow family offices buy private companies with patient capital, longer hold horizons, and flexible structures, and how they differ from private equity firms.
- Independent Sponsors as Buyers: Certainty of FundingHow independent (fundless) sponsors buy companies: they sign first and raise equity per deal. The financing-contingency risk and how sellers assess close.
- Strategic Buyers and Synergies: Why They Can Pay MoreHow strategic acquirers value private companies through cost and revenue synergies, why they can pay above financial buyers, and key seller considerations.
- Management Meetings With Buyers in a Sell-Side SaleHow management meetings work in a sell-side M&A process: their purpose, timing between IOI and LOI, who attends, what is covered, and common pitfalls.
- Competitive Sale Process vs Negotiated Sale in M&AA plain-English look at how a competitive M&A auction compares with a negotiated single-buyer sale, including process steps, price and terms tradeoffs.
- Confidentiality Leaks During a Sale: How to Prevent ThemHow confidentiality slips during a business sale through employees, customers, and competitors, and how a staged, NDA-gated process limits the risk.
- Selling Your Business to a Competitor: Risks and SafeguardsHow owners weigh a competitor's synergy premium against information risk, using staged disclosure, clean teams, redacted data, and antitrust basics.
- Selling to Employees: ESOP vs MBO vs Third-Party SaleAn educational comparison of ESOPs, management buyouts, and third-party sales for lower-middle-market owners on price, certainty, legacy, and financing.
- Partial Sale vs Full Exit: Recaps and Minority SalesHow a full exit, a majority recapitalization, and a minority sale differ on proceeds, control, risk, and the owner's role. Educational, not advice.
Frequently asked questions
- How long does it take to sell a private company?
- For a prepared company, a sale usually runs six to twelve months from launch to closing. Clean financials and a motivated buyer can shorten that, while complexity, financing problems or surprises in diligence can push it past a year.
- Who buys companies in the lower middle market?
- Private equity firms, strategic acquirers such as competitors, suppliers and customers, family offices, search funds, independent sponsors and holding companies all buy at this size. They differ on price, control, speed, certainty of close and what the owner does after closing, so two offers with the same headline number are rarely the same offer.
- What happens after a letter of intent is signed?
- Most of the letter is non-binding, but exclusivity and confidentiality usually bind, so competing buyers move on while the chosen buyer verifies the business and counsel drafts the purchase agreement. That is also why sellers tend to hold the most leverage before the letter is signed. Most sales that collapse unravel in this stretch, often over diligence findings, earnings disputes or financing.
Other topics
Looking for a term? The M&A glossary defines the vocabulary of a sale.