Selling Your Business? 7 Questions to Ask Any Buyer Before You Sign an LOI
Key Takeaways
- The LOI is signed before most sellers understand who the buyer actually is. These seven questions close that gap before the deal locks in.
- Each answer reveals something structural that price alone cannot show. Time horizon, decision-making, post-close plan, team continuity, track record, capital structure, and respect for your decision.
- The right buyer welcomes all seven questions. A buyer who resists any of them is telling you something important.
- The questions work for any buyer type. Private equity funds, strategics, evergreen holding companies, family offices, search funds, or individual operators.
- Ask them early. Before you narrow to one buyer. Before legal fees mount. Before the LOI locks you into exclusivity.
If you have decided to sell the business you built, the temptation is to optimize for the price and let the rest of the details work themselves out. For a lot of sellers, "the rest of the details" is exactly where regret lives later.
An LOI (Letter of Intent) is not the end of the sale process, but it is the moment the process stops being abstract. Once the LOI is signed, you are typically in exclusivity with one buyer, legal fees start climbing, and walking away gets harder. When sellers respond to unsolicited offers without their own M&A representation, more than 80 percent of those deals are renegotiated to the seller's disadvantage during due diligence.¹ What you know about the buyer before you sign matters more than what you learn after.
These are the seven questions we wish every owner-operator asked before signing an LOI with any buyer, including Alderman Enterprises. The answers tell you more about the next decade of your business than the price does.
1. When do you plan to sell my business?
Every potential buyer has a plan for your business, and that plan likely has a timeline attached. A private equity fund usually needs to sell inside five to seven years to return capital to investors. A strategic buyer may integrate and hold indefinitely. An evergreen holding company plans to hold for decades. A search fund or individual operator depends on the operator's own horizon.
These answers are not wrong. But the answers shape almost every decision the buyer will make after close. How much they invest in long-cycle equipment. How they think about headcount. Whether they dress the business up for another buyer in year five, or run it for year fifteen.
If a buyer cannot give you a clear answer, or if the answer conflicts with what they said earlier in the process, pay attention.
2. Who is on your investment committee, and how does a deal get approved?
A serious buyer knows exactly who approves the deal. Private equity funds typically route decisions through an investment committee. Strategic buyers run it through corporate development and board approval. Evergreen holding companies may have a smaller committee or a founder-led decision. Family offices and search funds often move fastest because the decision-maker is already at the table.
This matters for two reasons. First, it tells you who needs to believe in the deal for it to close, which is your real deal risk. Second, it tells you how the buyer's internal pressure will show up in the negotiation. A fund with five limited partners behind it negotiates differently than an operator-founder spending his own money.
Ask the question early. The answer tells you how the buyer actually works.
3. What does the first 100 days after close look like?
The right buyer has thought specifically about the first 100 days and can walk you through them. The wrong buyer waves the question off with "we'll figure it out together."
A good first-100-days answer includes how the transition of leadership is handled, what changes (if any) happen to reporting relationships, whether there is a new operating cadence, what investments or decisions are on the table in the first quarter, and how the buyer plans to get to know your team and customers.
A buyer who has not thought through the first 100 days is telling you they have also not thought through year one, year five, or year ten.
4. What will happen to my leadership team and employees?
This is the question most owner-operators care about most, and the one most sellers forget to ask directly until after the LOI is signed.
Ask it early. Ask for specifics. A buyer who plans to retain the leadership team should be able to tell you which roles they see continuing, which they see evolving, and where they believe added leadership or investment is needed. A buyer who plans to replace leadership should tell you that too, clearly and on the record.
The goal is not to lock the buyer into guarantees that cannot be delivered. It is to get a clear picture of the buyer's thinking before you decide whether to work with them.
5. Can I speak with the sellers of your last three acquisitions?
This is the single highest-signal question you can ask any buyer. It is also the one most often skipped.
A buyer you want to sell to should welcome it. References from prior sellers will tell you what the buyer is actually like to work with once the deal is done. Did they do what they said they would do in the first year? Is the business in good hands three years later? Were the people protected? Did the buyer show up after the close, or only before it?
If a buyer has bought even three or four companies and cannot produce a seller willing to speak candidly, that silence is itself an answer.
6. How will you fund the acquisition, and how much debt will you put on my company?
Purchase price is one thing. Capital structure is another. Both matter, especially if you are taking seller financing, rolling equity, or staying on in any ongoing capacity.
Ask specifically: what portion of the acquisition is funded with equity, what portion with debt, and how much of that debt will sit on the company's balance sheet after close? A buyer who plans to leverage your company heavily is operating on a fundamentally different thesis than one buying with mostly cash equity. The leverage changes the pressure on the business, the decisions the buyer will need to prioritize, and the risk profile for anyone who stays.
This is not about judging one capital structure over another. It is about knowing what you are actually getting into.
7. If we decide not to sign an LOI with you, what will you do?
This final question is as much about the buyer as it is about you.
The right buyer's answer is some version of: "We would be disappointed, but we understand. We want the best outcome for you and the business, whether that is with us or with someone else." A buyer who responds to the possibility of losing the deal with pressure, urgency tactics, or subtle hostility is showing you what it will feel like to work with them after close.
How a buyer handles the moment before a deal tells you how they will handle the moments after.
When to Ask These Questions
These questions work best asked early. Most come up naturally in a good first meeting. All should be answered clearly before you sign an LOI. Afterward, you lose leverage to get honest answers.
If a buyer resists or dodges any of them, that is the most useful signal you will get in the entire sale process. Pay attention to what the resistance is telling you.
There is no perfect buyer. There is a right buyer for your business and your goals, and the only reliable way to find out who that is is to ask the questions that reveal it. The seven above are a starting point, not a checklist.
Frequently Asked Questions
Should I ask these questions myself or have my advisor ask them?
Both. The answers are for you, but having your advisor in the room signals that the questions are serious and the answers will get more specific.
What if a buyer thinks these questions are unusual?
They are not unusual. They are the questions a prepared seller asks. A buyer who treats them as unusual is telling you something about the sellers they usually deal with.
When in the process should I ask these questions?
As early as you can. Most work well in a first or second meeting. All should be answered clearly before an LOI.
What if I get answers I do not like?
The answers are information. Sometimes the right move is to keep working with the buyer and push on the concerning areas. Sometimes the right move is to open the process to other buyers. The answers let you make an informed decision instead of a hopeful one.
Do these questions work for any type of buyer?
Yes. Private equity funds, strategics, evergreen holding companies, family offices, search funds, and individual operators all can and should answer clearly. The questions are buyer-agnostic.
If you are an owner-operator in the Southeast thinking about selling a niche, B2B industrial business, Alderman has been answering these questions for sellers since 2015. We are glad to answer them for you.
Notes
- Software Equity Group, "The Truth About Unsolicited Private Equity Offers (and What Founders Should Do Next)," Software Equity Group, accessed April 25, 2026
