10 Most Frequently Asked M&A Questions by Founders in 2025

2. Should I sell now or keep growing and sell later?

The right timing to sell depends on three factors: market dynamics, your company’s milestones, and your personal journey as a founder. Key performance indicators such as growth rate, profitability, churn, and customer concentration also play a major role in determining whether the business is ready for sale.

If the market is active and buyers are showing strong interest in your business model, it may be worth exploring a sale even if you believe there is more room to grow. On the other hand, there are times when the market cools, financing becomes tighter, or certain business models fall out of favor. In such cases, even well-performing companies may struggle to attract good offers.

Your own goals matter just as much as the numbers. If you are energized to scale further and have clear growth milestones ahead, holding off may make sense. But if you are seeking liquidity, want to start a new venture, or face burnout, it can be better to sell while your KPIs are trending positively.

Ultimately, on the day of the deal, a company is worth exactly what a buyer is willing to pay and a seller is willing to accept. The best time to sell is when both sides see value and opportunity. Consulting with an experienced advisor can help you understand how your personal plans, whether you want to stay on or fully exit, will influence buyer interest and the final valuation.

3. What multiples do companies like mine usually achieve?

Multiples vary widely depending on your business model, scale, and risk profile. While benchmarks and median multiples can serve as a reference point, they should be viewed as a range, not a rule. Factors such as recurring revenue, customer diversification, churn rate, gross margin, and growth predictability all influence how buyers value your business.

In the technology sector, for example, companies with strong retention, high-margin recurring revenue, and steady growth can achieve significantly higher multiples than peers with similar size but weaker metrics. On the other hand, if your customer base is concentrated or your churn is high, buyers will likely discount the valuation.

Multiples also fluctuate with market sentiment and the availability of capital. During periods of high buyer competition, valuations rise as investors seek quality assets. When financing tightens, the focus shifts toward profitability and stable cash flow.

Rather than relying on a single figure from other deals, use multiples as a guide to understand how the market prices businesses with similar performance. A professional advisor can help you interpret the data, adjust for your company’s KPIs, and position your business to attract competitive bids within a realistic valuation range.

4. Who are the most likely buyers for a company like mine?

The most likely buyers depend on your business model, size, and growth profile. In general, buyers fall into two broad categories: strategic and financial.

Strategic buyers are companies already active in your industry or in closely related markets. They acquire businesses to expand their product offering, customer base, or capabilities. For example:

• In SaaS, typical acquirers include software consolidators such as Constellation Software, Volaris Group, or vertical players that seek to own full software ecosystems in specific niches. Larger software providers may also acquire smaller platforms to complement their portfolio.
• In IT services or managed service providers, many active buyers are roll-up platforms backed by long-term investors. Their goal is to build regional networks or specialized providers within cybersecurity, cloud, or infrastructure.
• In testing, certification, and consulting, global groups like SGS, Bureau Veritas, and Intertek continue to acquire smaller firms to broaden their expertise or geographic coverage.

Financial buyers include private equity firms, investment holding companies, and family offices. They focus on companies with predictable cash flow, recurring revenue, and a clear path for scaling. Financial investors often use acquisitions as platform investments that they can expand with future add-ons, or as bolt-ons to strengthen existing portfolio companies.

For founders, the ideal buyer depends on your personal and strategic objectives. A strategic buyer may offer a higher valuation due to synergies and cross-selling potential, but will likely integrate your company faster. A financial buyer may give you the opportunity to stay involved, retain equity, and participate in the next phase of growth.

An experienced advisor can help you identify which type of buyer fits your company and goals, map active acquirers in your particular industry, and structure a process that attracts multiple qualified offers.

5. What is the typical M&A process and how long does it take?

Selling a company is a structured and time-consuming process that usually takes six to nine months from preparation to closing, depending on your company’s size, financial complexity, and buyer engagement. The key stages are:

1. Preparation (1–2 months)
   This phase involves organizing your financial statements, legal documents, customer data, and key contracts. An advisor will help prepare marketing materials such as the teaser and confidential information memorandum, define your valuation range, and identify qualified buyers.
2. Buyer outreach (1–2 months)
   Your advisor discreetly approaches a curated list of potential buyers under non-disclosure agreements. The goal is to attract genuine interest while maintaining confidentiality. Interested parties receive the CIM and submit initial feedback or valuation indications.
3. Indications of interest and management meetings (1–2 months)
   Selected buyers provide indications of interest with preliminary valuation ranges. You or your management team meets top candidates to discuss strategy, synergies, and deal structure.
4. Letter of intent and due diligence (2–3 months)
   Once you select the preferred buyer, both sides sign a letter of intent outlining key terms. The buyer then conducts due diligence, reviewing fiancial records, legal obligations, and customer contracts. This is often the most intensive part of the process.
5. Negotiation and signing (1 month)
   Following diligence, lawyers draft the sales agreement, including payment terms, representations and warranties, and any earn-out or rollover provisions. Both parties negotiate final adjustments before signing.
6. Closing
   The transaction closes once all documents are executed, payments are transferred, and ownership officially changes hands.

The process requires significant focus and coordination, as it overlaps with day-to-day business operations. Working closely with an experienced M&A advisor, legal counsel, and tax adviser helps streamline the timeline, minimize disruptions, and ensure a smooth path to a successful sale.

6. What are the main steps in selling a company?

Selling a company is a multi-step process that requires preparation, organization, and clear decision-making. Understanding each stage helps you stay focused and maintain control over the sale.

1. Set your goals and timeline
   Decide why you want to sell and what outcome you are aiming for. Your objectives, whether financial security, new ownership, or a growth partner, will shape the entire process.
2. Prepare your company for sale
   Organize your financial records, contracts, and legal documents. Strengthen areas that buyers will scrutinize, such as customer retention, margins, and intellectual property. A clean set of financial statements and a clear growth story make your business more attractive.
3. Determine valuation and prepare materials
   Work with an advisor to estimate your business valuation and prepare marketing materials like the teaser and confidential information memorandum. These documents help present your business clearly while keeping sensitive data protected.
4. Find and engage buyers
   Your advisor will reach out to a shortlist of strategic and financial buyers. After signing non-disclosure agreements, interested parties receive the CIM and decide whether to move forward.
5. Review offers and negotiate terms
   Qualified buyers submit indications of interest or letters of intent outlining valuation and structure. Compare offers carefully, considering not just price but also payment terms, earn-outs, and post-sale involvement.
6. Due diligence
   The buyer reviews your company’s financial, legal, and operational details to confirm assumptions. Being well-prepared with organized data speeds up this step and builds buyer confidence.
7. Closing and transition
   Final contracts are signed, payments are made, and ownership officially transfers to the new buyer. Depending on the agreement, you may stay involved for a transition period or move on immediately.

Each step requires time, patience, and coordination. Working with experienced advisors, accountants, and lawyers helps you manage the details, protect your interests, and achieve a successful sale.

7. What are the risks of an earn-out for founders?

An earn-out links part of the sale price to the company’s future performance, often measured by revenue, EBITDA, or customer retention over a period of one to three years after the sale. It is designed to align the interests of the buyer and seller, but it also introduces risks that every founder should understand before agreeing to one.

The main challenge is control. If you plan to exit immediately after closing, you will have little or no influence over the business results that determine your payout. Buyers may integrate the company differently, change priorities, or allocate resources in ways that affect performance, making it harder to reach the agreed targets.

If you agree to stay on after the sale, you will likely be responsible for meeting the KPIs tied to the earn-out. While this gives you more control, it can also be stressful if the targets are aggressive or depend on factors outside your direct influence, such as market conditions or group-level decisions. Misaligned incentives between you and the buyer can create tension, especially if operational autonomy is reduced.

Another risk is ambiguity in the contract. Earn-out formulas must be clearly defined, specifying what metrics are used, how they are calculated, and what happens in case of an acquisition, restructuring, or accounting change. Vague definitions often lead to disputes and unpaid balances.

To protect yourself, negotiate achievable and objective targets, ensure transparent reporting, and seek advice from experienced M&A and legal professionals. A well-structured earn-out can maximize your payout, but only if it gives you a fair opportunity to meet the performance conditions.