What a Sell-Side Advisor Should Do in an M&A Transaction

Most founders sell a business once. I'm lucky to have sold my own tech businesses on 3 occasions, but the buyer's team has almost always done it dozens of times.

That asymmetry is the entire reason sell-side advisory exists and the reason who you engage matters enormously. A sell-side mandate is a high-stakes, time-compressed process where the wrong move at any stage can cost you millions. Here is what a competent sell-side advisor should be doing from day one.

Start With a Seller Readiness Assessment

Before a single buyer is contacted, the advisor's first obligation is to understand what they are actually selling.

That means a blunt internal audit: quality of financials, customer concentration, revenue predictability, key person risk, IP ownership, contracts in good standing and any issues that need to be surfaced before buyers find them in diligence. Sellers are rarely objective about their own businesses. A good advisor is and can deliver blunt reality checks.

The (investment) readiness assessment informs everything, deal structure options, likely buyer universe, realistic valuation range and the narrative that will be built around the asset.

If there are issues, the advisor either helps fix them pre-process or gets ahead of them in the narrative. Surprises in diligence kill deals or crater price.

Build the Information Package and Make it Do Work

The Confidential Information Memorandum (CIM) is not a fact sheet. It is a sales document.

A well-constructed CIM tells a compelling story about where the business has been, where it is going and why the buyer is better positioned to get there with this asset than without it. A strong CIM includes a clear investment thesis, not just what the business does but why it is valuable now. It includes normalised financial statements with clear EBITDA adjustments, market positioning and competitive dynamics, growth vectors the buyer can exploit, management team structure and the deal rationale.

The advisor also prepares a one-page teaser, sometimes called a blind profile, for initial outreach that protects the seller's identity until NDAs are signed.

Poor CIMs are the most common reason good businesses receive mediocre offers. If the buyer cannot quickly understand why they should care, they do not.

Map and Prioritise the Buyer Universe

Not all buyers are equal and outreach strategy should reflect that.

The advisor segments the market across strategic buyers (competitors, adjacents, platforms), financial buyers (private equity, family offices, growth funds) and international buyers where relevant. Each group has different motivations, different valuation frameworks and different integration approaches.

The advisor's job is to identify who has the most to gain from this asset, because the buyer with the highest strategic rationale will typically pay the highest price. In my case, a buyer was facing a "build or buy" decision, and the documentation that painted a picture of "Imagine this asset in your business today, without any build risks and a value accretive client base", had prospective buyers asking for more.

A targeted process beats a broad scatter-gun approach. Fifty qualified approaches outperforms two hundred generic ones. And controlling who knows the business is for sale protects the seller from market disruption, employee anxiety and customer uncertainty.

Run a Structured, Competitive Process

The fastest way to leave money on the table is to negotiate with one buyer at a time. The fastest way to maximise value is to create genuine competitive tension.

A well-run sell-side process stages engagement deliberately. Teaser distribution and NDA execution qualifies interest before releasing information. CIM distribution generates indicative offers. Management presentations shortlist the serious contenders. Site visits and Q&A deepen diligence for the top tier. A structured deadline around final offers and the Letter of Intent forces decision-making. Exclusivity and binding diligence then protects the seller's leverage through to close.

The advisor controls timing. Urgency is a tool. A well-managed timeline creates pressure that works in the seller's favour.

There are also deal rooms and deal engagement platforms that let you see who has logged in, who has looked at what documents and when to get statistics on who is genuinely interested and who is a tyre-kicker.

Manage Valuation and Deal Structure

Price is one number. Deal structure is a hundred more.

A strong sell-side advisor does not just negotiate headline price. They negotiate how that price is paid: cash at close versus earnout versus rollover equity, adjustment mechanisms, working capital pegs, representations and warranties insurance, earnout milestones and escrow arrangements.

Many founders fixate on the enterprise value number and miss how structure erodes actual proceeds. As I have said in previous posts, tax structure is mighty important. An aggressive earnest in a buyer-controlled environment can destroy the value it purports to offer. An advisor who understands this structures protections before the LOI is signed, not after.

Prepare the Seller for Management Presentations

Buyers are not just buying a business. They are buying confidence in the team.

Management presentations are where deals are won and lost on chemistry as much as content. The advisor prepares the leadership team thoroughly: message discipline, anticipated questions, how to handle weaknesses and how to project credibility without overselling. Founders who oversell create scepticism. Founders who are vague create doubt.

The advisor attends every management presentation and debriefs immediately after.

Run Diligence Like a Project Manager

Once exclusivity is granted, the buyer's diligence team goes to work. The sell-side advisor's job is to protect the seller through this phase, managing the data room, fielding queries efficiently, keeping diligence on schedule and flagging anything that could reopen valuation discussions.

Slow responses in diligence hand momentum to the buyer. Disorganised data rooms signal operational weakness. A well-run seller-side diligence process maintains the credibility established in the marketing phase.

The advisor also manages the flow between seller management and buyer: filtering noise, escalating genuine issues and keeping the CEO focused on running the business rather than answering hundreds of document requests.

Again, from my experience, stand-still periods as part of negotiation do exactly that - they make you stand-still. If you can get a non-refundable deposit paid against a stand still, at least you have something in the bank if the deal collapses.

Stay Close to the Sale and Purchase Agreement

The Sale and Purchase Agreement is where the deal either holds together or unravels. The sell-side advisor does not draft it, that is the lawyers' job, but they should be close enough to the negotiation to flag commercial issues before they become legal deadlocks.

Common SPA flashpoints include the scope of representations and warranties, indemnification caps and deductibles, retention of pre-close tax liabilities, non-compete scope and duration and conditions precedent to closing. The Australian Institute of Company Directors has useful guidance on director duties during M&A that sellers and their boards should be across before entering any process.

The advisor bridges the gap between commercial intent and legal drafting. If the lawyers are negotiating something that contradicts the agreed commercial terms, the advisor catches it.

The Standard No Sell-Side Advisor Should Fall Below

A sell-side advisor who sends out a CIM and waits for offers is not an advisor. They are an introducer.

Real sell-side advisory is active, disciplined and commercially aggressive. It means knowing the business better than the buyer, running a process the buyer cannot game, protecting the seller through diligence and getting terms across the line that reflect the business's true value.

Founders rarely get a second shot at this. The advisor's job is to make sure the first one counts.

This is part of a two-part series. Read the companion post on what a buy-side advisor should do in an M&A transaction and the earlier post on M&A strategy and board decision-making.

If your business is approaching a transaction, get in touch for a confidential conversation.