Sell-Side M&A Process: Steps, Timeline and Who Does What (2026)

A buyer has called, or your board thinks it's time to sell. Now what? Selling a company isn't one meeting where someone names a price. It's a process with seven steps, and it takes most of a year. Each stage has its own documents, its own people and its own ways to go wrong. Below we walk through the whole sell-side M&A process in plain English. You'll see the steps, how long each takes, who does what and what kills deals.

The sell-side M&A process is how a company gets sold. You prepare the business, write the sale documents and contact a shortlist of buyers. The serious ones meet you and make offers. You pick one, get through its due diligence and sign the purchase agreement. It takes 6–12 months. An M&A advisor or investment bank typically runs it, though some founders do it with their lawyers.

What are the steps in the sell-side M&A process?

There are seven steps. Prepare and value the company. Build the sale documents. Contact a list of buyers. Meet the serious ones. Collect offers, first as price ranges, then as one letter of intent. Let the winning buyer do its due diligence. Then negotiate the purchase agreement and close. In our work on 50+ M&A transactions, the first two steps move the price most.

To make it concrete, we'll follow one fictional company through the steps. It sells scheduling software to clinics, makes $6M a year and is backed by 2 VC funds.

1. Prepare and value the company

This is the step founders skip, and it's the one that sets the price. Preparing a business for sale means 3 things. You clean up 3 years of accounts. You fix what a buyer's lawyers would find, like code written by contractors who never signed over the IP. And you get a valuation, so you know what the company is worth before anyone makes an offer.

Say the clinic-software founders hope for $90M. A valuation built on recent deals in their sector says $35–45M. Better to learn that now, privately, than from the first offer. Our guide to exit multiples by industry shows where your sector trades.

2. Build the sale documents

Next come the documents buyers will read. That's a teaser, an NDA, the confidential information memorandum (CIM), a financial model and a data room. We explain each one further down. Most of this work happens in the same months as step 1, before you go to market.

3. Build the buyer list and reach out

The advisor builds a long list of buyers. It mixes companies that would want your product with investors who buy companies like yours. Each one gets the teaser. Those who are interested sign an NDA and receive the CIM. Then the questions start, and the advisor answers them on the same terms for everyone.

Say the clinic-software list has 40 names, from big health-software companies to private equity funds. Of those, 12 sign the NDA. That's a healthy start.

4. Meet the buyers

Serious buyers want to meet the people who run the company. In a management meeting, the founders present the business and answer questions. In a formal auction, buyers send a first price range before these meetings. In a smaller, targeted process, the order is looser. Either way, this is where buyers decide whether they trust your numbers.

5. Collect offers: IOIs, then an LOI

An indication of interest (IOI) is a buyer's first, non-binding offer: a price range and a rough structure. It tells you who's serious. A letter of intent (LOI) is the firmer offer you agree with one buyer. It sets the price, how it's paid and how long you'll talk only to them.

Say 3 buyers send IOIs for the clinic-software company:

The highest number isn't automatically the best offer. The $45M bid only guarantees $37M, and the rest depends on targets you may not control. Our earnout guide explains how to weigh that.

Once you pick a buyer and sign the LOI, you grant exclusivity. That means you stop talking to other buyers for a set time. Lawyers at Orrick say it usually runs 30–60 days (Orrick). Their advice to sellers: push it as close to 30 as you can.

6. Due diligence

Now the buyer checks everything you've told them: accounts, contracts, IP, tax, tech and people. It's the longest stretch after the LOI, and the riskiest. We cover it in detail below.

7. Negotiate the purchase agreement and close

The purchase agreement is the final, binding contract. Both sides' lawyers negotiate it while diligence runs. It sets the final price and the promises you make about the company, called reps and warranties. It also says what happens if one of those promises turns out wrong. Part of the price is often held back for a while to cover that. Then your board and shareholders approve, and the money moves. For a private company, closing can come within a week of signing, sometimes on the same day (Orrick).

How the price actually reaches you, through cash, shares, earnouts and holdbacks, is covered in how to sell your startup.

How long does the sell-side M&A process take?

Plan for 9–12 months from hiring an advisor to closing. About 3–6 months of that is preparation, before any buyer hears about the sale. Well-prepared companies can finish in 6–9 months. The stretch from a signed LOI to closing usually takes 2–3 months. Regulatory approvals can stretch it further.

Say the clinic-software company hires an advisor in January. Preparation and the documents take until May. Teasers go out in June, and IOIs arrive in July. The founders sign an LOI in August. Diligence and the purchase agreement run through October. If nothing goes wrong, the money lands in November.

Deals are getting slower, too. Datasite says the average deal stayed open on its platform for 10.2 months in 2024 (Datasite). In 2021 it was 6.9 months.

Two things stretch that timeline. One is regulators. A deal that needs antitrust clearance, like an HSR filing in the US, can take many months to close (Orrick). The other is surprises in diligence. You can't control the first. You can control the second, and the due diligence section below shows how.

Who does what in a sell-side M&A process?

In a full sale process, an M&A advisor or investment bank runs the sale: the timetable, the buyers and the negotiation. With one obvious buyer, founders can run it themselves with their lawyers. Lawyers draft the NDA, the LOI and the purchase agreement. Accountants check the numbers. The founder keeps the company growing and meets the buyers. The board and investors approve the deal.

Do you need a banker at all? Orrick's M&A lawyers put it simply. A bank helps most when you don't have a clear group of buyers (Orrick). It also helps if you lack finance people in-house, or want someone else to fight over price. If you already know your buyer, have a strong finance team and are happy to negotiate, you may not need one. Our guide to business brokers, M&A advisors and selling it yourself helps you choose.

What changes if you raised venture capital?

Three things. First, your preferred shareholders usually have a veto over a sale, so they're part of the deal from day one. Second, the liquidation preference decides who gets paid first. At a low price, it can leave founders and the team with little. Third, the purchase agreement must say what happens to employee options. The buyer takes them over, pays them out or cancels them.

So model what everyone gets at each likely price before you agree a walk-away number with your board. Our term sheet guide explains vetoes, the drag-along and liquidation preferences in plain English.

Where does Waveup fit?

We're clear about our role. Waveup prepares the materials, gives you expertise and finds potential buyers. We don't run the final sale. That's the job of your M&A advisor or bank, or yours with your lawyers. In practice, we build the teaser, the CIM, the financial model, the valuation and the data room. We also research the buyer list. Then you or your advisor take it to market.

Since 2014 we've supported 50+ M&A transactions, buy- and sell-side, including 20+ exits. The documents look much the same on both sides of a deal. Here's a buy-side example. We prepared the information memorandum, deck, financial model and valuation behind a lithium battery company's $20M of acquisition financing. The company went on to make 2 acquisitions (case study).

Olena, who wrote this guide, worked in M&A at Lazard and J.P. Morgan and in consulting at Oliver Wyman. She then led commercial growth and operations at Klevu, a VC-backed AI search company, through its 2025 exit into PSG's portfolio.

Do strategic buyers pay more than financial buyers?

A strategic buyer is a company that wants your business because it fits its own. A financial buyer is an investor, usually a private equity fund, that buys you to grow and sell again. Strategic buyers can often pay more, because owning you is worth more to them. But that gap is smaller than it used to be.

Say a big practice-management software company looks at the clinic-software business. It could sell the product to its own clinics from day one. That extra revenue is why it can pay more than a fund that only has your numbers to go on.

The classic evidence is old but clear. One study looked at listed companies that were bought. Their shareholders got 55% more when the buyer was a public company rather than a private equity fund (Bargeron et al.). Today the lines blur. In 2025, private equity was involved in nearly 58% of SaaS deals, often through companies it already owns (SEG). Software Equity Group wrote in April 2026 that the old rule, strategics pay more, is less reliable than it once was (SEG).

So don't pick a type in advance. Put both on the list and let them compete. If a buyer mostly wants your team, that's an acquihire, a different deal with different maths. And the full list of who buys startups, and what each pays for, is in how to sell your startup.

Should you run a broad auction or a targeted process?

A sale can be run 4 ways. In a broad M&A auction, your advisor contacts every plausible buyer to push the price up. A limited or targeted auction goes to a shorter, hand-picked list. An exclusive negotiation talks to one buyer. Fewer buyers means less price tension, but more secrecy, less disruption and a faster deal.

LinkedIn is the famous example of a targeted auction. When it sold to Microsoft, its bank, Qatalyst Partners, invited just 5 bidders, including Salesforce and Google (Wall Street Prep). With only a handful of real buyers, a broad auction would have added risk and little else.

Many sales start with an unsolicited offer. Say a competitor offers $40M for the clinic-software company out of the blue. You could negotiate with them alone. Or your advisor could quietly invite 4 more buyers who'd value it most. That's a targeted auction, and it tells you whether $40M is a good price.

What documents do you need to sell a company?

A sale runs on 6 documents, shared in order. An anonymous teaser goes to the long list. Buyers who want more sign an NDA and get the CIM. The shortlist gets a management presentation and the data room. The buyer you pick signs the purchase agreement. Each step shows more to fewer buyers.

The M&A teaser

An M&A teaser is a short summary of your company with no name on it. It says what you do, roughly how big you are and why a buyer might care. Its only job is to make the right buyers sign the NDA. Say yours reads: 'Software for 900 clinics, $6M in revenue, growing fast.' That's enough for a buyer to know if it fits. It isn't enough to guess who you are. In fundraising, the same idea is called an investment teaser.

The CIM

The confidential information memorandum (CIM) does the heavy lifting. It has to answer the buyer's real question: what is this company worth to us? A CIM that only describes the business leaves that maths to the buyer. And buyers rarely pay for value they had to find themselves. See a real one, section by section, in our CIM example. If you'd like it written for you, that's our CIM service.

The data room

The data room is an online folder of every document a buyer will check: accounts, contracts, cap table, IP and policies. Build it before you launch, not after the LOI. Our guide to data rooms for startups explains how to set one up. Our pick of the best data rooms for due diligence compares the tools.

What happens in sell-side due diligence?

Due diligence is the buyer checking that everything you said is true. Its accountants test your revenue and profit. Its lawyers read your contracts and IP, and its experts check tax, tech and people. Sell-side due diligence, called vendor due diligence in the UK, is you running the same checks first. Then the buyer finds no surprises, and surprises are what lower prices.

As accountants at Plante Moran put it, the buyer's diligence investigates while the seller's anticipates (Plante Moran). The biggest piece is usually a quality of earnings report, or QoE. It's an accountant's check that your profit is real and will repeat.

Say your profit last year was $1.2M, but $300K came from a one-off consulting job. The buyer's QoE will strip it out and price you on $900K. Better that your own accountants find it first, and that the CIM explains it.

What is on a due diligence checklist for selling a business?

A due diligence checklist for selling a business covers 6 areas. They are financials, customers, company records, IP and technology, people, and tax and legal. Each one becomes a folder in your data room. Start with 3 years of accounts that tie to the CIM. Then collect signed contracts, IP assignments and a clean record of every share and option.

• Financials — 3 years of accounts, monthly management accounts and revenue by customer. Add a bridge from your accounts to every number in the CIM.
• Customers — signed contracts, renewal dates, and any clause that lets a customer leave if you're sold.
• Cap table and company records — every share, option and SAFE, with board minutes and investor agreements.
• IP and technology — IP assignments from every employee and contractor, open-source use and security reviews.
• People — employment contracts, option grants, and who's key to keep.
• Tax and legal — filings, open disputes, licences and data protection.

Raising money rather than selling? The checks are similar, and our due diligence checklist for startups covers them.

What slows down or kills a sale?

Signed deals most often break in due diligence. In Axial's review of 75 LOIs that broke in 2025, findings in diligence and gaps in reported profit caused nearly half. Arguments over a new price, sellers changing their minds, financing and a dip in results caused most of the rest. And time makes every one of them worse.

Here are the patterns behind those numbers, and how to get ahead of each one.

1. Surprises in diligence — anything the buyer finds that you didn't tell them becomes a reason to cut the price. That's called a re-trade. In one broken deal in Axial's report, the banker had overstated EBITDA by 25% (Axial).
2. A price gap nobody closed — in the same internal study, founder and market valuations often differ 2–3x. An independent valuation closes that gap before a buyer does.
3. One buyer, no deadline — without competition, a buyer has no reason to hurry. Every extra week of diligence is another chance to find a problem (Windsor Drake).
4. The business dips mid-sale — running a sale is a second job. If the founders get distracted and miss a quarter, the buyer reprices.
5. Investors who won't sign — preferred shareholders can usually block a sale. If the price leaves them, or you, with less than expected, expect a fight. Agree the walk-away price before launch.
6. Long exclusivity — a long no-shop gives the buyer time to find issues and lets the other buyers move on. When tech deals broke in 2025, they had spent 94 days in exclusivity on average (Axial). Push for 30 days.
7. Consents and regulators — some customer contracts need the customer's OK if you're sold. Licences may need to move, and big deals need antitrust approval. Each one adds weeks.