Sale Preparation

In most successful technology sales, executing the necessary components is critical. A typical sale usually contains five major steps.  These include:

1. The Preparation Phase

2. Preparation of a Confidential Information Memorandum

3. Strategy and number of potential buyers to approach

4. Research and preparation of a prospective buyers list

5. Preparation of virtual data room

The Marketing Phase

Once the preparation phase is completed (data room, audited financials, contracts), begin contacting potential suitors from the prospective buyers list. The advisor approaches each buyer and interested parties will be presented with an investment teaser that provides an overview of the opportunity. Each potential buyer will begin their own process of analyzing the prospect of purchasing the company and the potential fit with their acquisition criteria.

The Diligence Phase

Once the marketing phase ends, the process generally becomes more formal. At this stage, it is clear to the seller, which buyers are still interested, and a range of valuations and deal structure for the transaction becomes more apparent. The seller and their advisor can create a shortlist in which they selects only the buyers that are approved to continue with the process.


Negotiation Phase

Once the winning bid is determined, the acquirer and the seller have to begin a negotiation phase that will hand over the business.

Purchase and sale agreement 

The purchase and sale agreement (PSA) is the settlement of the entire sale as followed within the boundaries of the original Letter of Intent (LOI).

Transitional service agreement

A traditional service agreement is when the seller will provide transitional support to the buyer. This can include, but is not limited to accounting, human resources, and other management positions.


Non-competition agreement

A non-competition agreement stipulates that the seller cannot engage in direct or indirect competition with the buyer during a specified term.


Vendor financing agreements

Vendor financing generally occurs when there is a gap between the purchase price and the financeable asset base of the seller.


Transition Phase

The final phase involves the transitioning of the business from the seller to the buyer after the business has been sold. A strong transitional service agreement (TSA) can generally limit conflict and assist with a smooth hand.