If you’ve never sold a company before, the terminology around M&A can feel like it was designed to confuse you. CIM. LOI. Management presentations. Buy-side. Sell-side. Data room. Most founders encounter these terms for the first time when they’re already in a conversation with a potential buyer, which is exactly the wrong moment to be learning the basics.
This guide explains how a sell-side M&A process works, step by step, in plain language. No jargon for its own sake. Just what actually happens, in what order, and why each stage matters.
What Does “Sell-Side” Mean?
In any M&A transaction, there are two sides: the buyer and the seller. The sell-side refers to the seller and their advisors. If you own a company and you’re exploring a sale, you’re on the sell-side.
A sell-side M&A process is a structured, confidential approach to finding and engaging qualified buyers simultaneously, with the goal of maximizing the value you receive for your company. The operative word is structured. An unstructured process, where you respond to whoever reaches out and negotiate with one buyer at a time, almost always produces a worse outcome.
A boutique investment bank like Telegraph Hill Advisors acts as your sell-side advisor. We run the process, manage the buyer relationships, handle the documents, and negotiate on your behalf so you can keep running your company while the transaction unfolds.
The Six Stages of a Sell-Side Process
Stage 1: Preparation
Before any buyer sees anything, there is significant work to do on the sell-side. This stage typically takes four to eight weeks and involves three main workstreams.
Financial preparation. Your financial statements need to be clean, well-organized, and presented in a way that tells a coherent story about the business. This means normalizing for one-time expenses, presenting ARR and MRR clearly, documenting customer cohorts and retention data, and making sure your numbers reconcile. Buyers will scrutinize everything, and inconsistencies in financial presentation create doubt.
Legal and operational preparation. Customer contracts, IP ownership, employee agreements, cap table, any outstanding litigation or regulatory issues — all of this needs to be organized before due diligence begins. Discovering problems mid-process is one of the most common reasons deals fall apart or reprice.
Positioning. This is arguably the most important part of preparation. Your advisor works with you to develop a clear, compelling narrative about what your company is, why it wins in its market, what makes it defensible, and what a buyer could do with it. This positioning drives every document and every conversation that follows.
Stage 2: Marketing Materials
Once preparation is complete, your advisor creates two core documents.
The teaser. A one or two page anonymous summary of the business, sent to potential buyers before they sign an NDA. The teaser describes the company at a high level: sector, revenue range, growth profile, and why it’s an interesting acquisition target. It does not name the company.
The Confidential Information Memorandum (CIM). This is the full document, typically 40 to 80 pages, that gives qualified buyers a comprehensive picture of the business. It covers the company’s history and products, market opportunity, competitive position, go-to-market strategy, financial performance and projections, team, and the investment thesis for an acquirer. The CIM is only shared after a buyer signs an NDA.
A well-written CIM is one of the highest-leverage things in an M&A process. It frames how buyers think about your company and sets the narrative before anyone asks a question.
Stage 3: Buyer Outreach
Your advisor identifies and contacts potential buyers simultaneously. This typically includes strategic buyers in your sector and adjacent sectors, as well as private equity firms that invest in companies like yours.
The goal of simultaneous outreach is to create competitive tension. When multiple buyers are moving through the process at the same time, they know there are other interested parties. That knowledge changes how they behave. They move faster, they sharpen their offers, and they compete on price and terms rather than assuming they can take their time.
This is the core reason why a structured process produces better outcomes than a bilateral negotiation with a single buyer. One buyer has no reason to pay more than the minimum that gets a deal done. Multiple buyers competing for the same asset is what drives valuations to their ceiling.
Stage 4: Management Presentations
Buyers who have reviewed the CIM and indicated serious interest are invited to meet the management team. These meetings, typically 60 to 90 minutes, give buyers the chance to dig deeper into the business and ask questions that go beyond the document.
They also give buyers the chance to assess the team, which matters more than founders often realize. Acquirers are not just buying a product or a customer list. They are buying the people behind it. A strong management presentation builds confidence that the business will hold together after the transaction closes.
Your advisor prepares you thoroughly for these presentations: what to expect, how to handle difficult questions, how to present financial projections credibly, and what signals indicate a buyer is serious versus kicking tires.
Stage 5: Letters of Intent
After management presentations, serious buyers submit a Letter of Intent (LOI). The LOI is a non-binding document that outlines the proposed deal structure, valuation, key terms, and the buyer’s conditions for moving forward.
The LOI is one of the most important moments in the process, and it’s one that founders often underestimate. While it’s technically non-binding, the terms agreed to in the LOI are very difficult to change later. Price adjustments after LOI are rare and almost always downward. Structural terms that seem minor at LOI can have significant economic implications at closing.
Your advisor negotiates the LOI on your behalf, evaluates the relative merits of competing offers if there are multiple, and recommends which buyer to move forward with. Price is important, but it’s not the only variable. Deal structure, escrow requirements, earnout provisions, representations and warranties, and what happens to your team after close all matter.
Once you sign an LOI, you typically enter a period of exclusivity with that buyer, during which you agree not to continue discussions with other parties while due diligence proceeds.
Stage 6: Due Diligence and Closing
Due diligence is the period during which the buyer verifies everything they’ve been told. It is thorough, time-consuming, and occasionally uncomfortable. Buyers will review:
Financial records going back three to five years. Customer contracts, renewal rates, and churn data. Intellectual property ownership and any licensing arrangements. Employment agreements and equity documentation. Legal history, including any disputes, regulatory issues, or pending litigation. Technology infrastructure and security. Key customer and vendor relationships.
The preparation you did in Stage 1 pays off here. Companies that are well-organized and have anticipated buyer questions move through due diligence faster and with fewer surprises. Companies that are disorganized or have undisclosed issues create uncertainty, which gives buyers a reason to reduce their offer or walk away.
Once due diligence is complete, the parties finalize the purchase agreement and any ancillary documents. This phase, handled primarily by legal counsel on both sides, typically takes four to eight weeks. Then comes closing: signatures, regulatory filings if required, and the wire.
How Long Does the Process Take?
From the day you engage an advisor to the day the deal closes, plan for six to nine months. Adding the preparation phase before that, the full timeline from deciding to explore a sale to having proceeds in the bank is typically 6 to 9 months although some can be as quick as 3-4 months and others can be 12 months plus depending on the complexity of the transaction.
Founders who have done thorough preparation before engaging an advisor can compress the early stages. Founders who have not done that preparation often find themselves rushing to organize things mid-process, which creates risk and slows everything down.
What Does a Sell-Side Advisor Actually Do?
It’s worth being specific about this because it’s a common question.
Your advisor manages the entire process so you don’t have to. That includes building the marketing materials, identifying and contacting buyers, managing the data room, coordinating management presentations, negotiating the LOI, overseeing due diligence, and working with legal counsel through closing.
More importantly, your advisor brings three things you cannot provide yourself: a network of qualified buyers you cannot reach independently, the experience of having done this process many times before, and the ability to negotiate on your behalf without the emotional weight of being the founder.
That last point matters more than people expect. Selling a company you built is an emotionally charged experience. Having an advisor who can be dispassionate, strategic, and patient in negotiations while you maintain your relationship with the buyer is a structural advantage.
Frequently Asked Questions
What is the difference between a sell-side and buy-side M&A process? A sell-side process is run by the seller and their advisors to find and negotiate with potential buyers. A buy-side process is run by an acquirer looking for acquisition targets. Most founder exits are sell-side processes.
Do I need an investment bank to run a sell-side process? For companies above $3M in annual recurring revenue, yes. A sell-side advisor creates the competitive tension, manages the process, and negotiates the deal in a way that consistently produces better outcomes than founders going it alone.
What is a CIM in M&A? A Confidential Information Memorandum is the primary marketing document in a sell-side process. It gives qualified buyers a comprehensive view of the business and is shared only after an NDA is signed.
What is an LOI in M&A? A Letter of Intent is a non-binding document submitted by a buyer that outlines the proposed deal structure, valuation, and key terms. It’s the starting point for final negotiations and due diligence.
What is exclusivity in M&A? After signing an LOI, sellers typically agree to a period of exclusivity during which they stop talking to other buyers while the chosen buyer completes due diligence. Exclusivity periods usually run 45 to 90 days.
What happens after due diligence? The parties finalize the purchase agreement and ancillary documents, complete any required regulatory filings, and proceed to closing. Closing involves final signatures and the transfer of funds.
Telegraph Hill Advisors is a boutique investment bank based in San Francisco. We have run sell-side processes for 250+ founder-led technology companies. If you are thinking about what a process might look like for your company, we are happy to have that conversation.
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