M&A Readiness
Transaction Readiness
How to prepare a business for sale before the process begins — reporting quality, owner dependency reduction, management credibility, and narrative consistency.
21 articles
Lease Assignment and Landlord Consent in M&A: The Hidden Deal Party
Commercial leases contain assignment and change-of-control provisions that give landlords consent rights over M&A transactions.
Multi-State Tax Nexus in M&A Diligence: The $200K–$800K Surprise Most Founders Don't See
State tax nexus is one of the most common and expensive diligence surprises in lower middle market deals. Remote work and Wayfair expanded the…
Cash to Accrual Accounting Conversion for M&A: What Founders on Cash Basis Must Know
Roughly 60% of lower middle market companies use cash-basis accounting. PE buyers require accrual financials, and conversion often changes EBITDA.
IP and Intangible Asset Inventory Before an M&A Transaction
Buyers flag undocumented IP as deal risk, and IP that lives in people's heads or is owned by the wrong entity creates purchase price adjustments that…
Fairness Opinions in M&A: When Founders Actually Need One and What It Costs
An ESOP transaction challenged by the DOL can expose the selling founder to repurchase liability equal to 20% of the transaction value. A fairness…
EBITDA Normalization and Add-Backs: The Complete Guide for Founders Preparing for a Sale
Sellers without a sell-side QoE often see adjusted EBITDA reduced in buyer diligence. On a $3M EBITDA business, one preparation decision can move…
How PE Buyers Score Revenue Quality: The Framework Founders Need to Understand
Revenue quality is often the primary driver of multiple determination in LMM transactions. Five measurable dimensions explain where the premium comes…
Audit vs. Review vs. Compilation: What Buyers Actually Require
A first-year audit on a $15M revenue business costs $60K–$100K and takes 14 weeks. A post-LOI restatement finding discovered without one costs far…
Building an Advisory Board Before a Sale: Why It Matters to Buyers
Businesses with documented advisory boards sold at 0.4x higher EBITDA multiples in comparable LMM transactions. On $3M EBITDA, that is $1.2M.
Building a Financial Model for M&A: What Buyers Expect
64% of LMM QoE engagements found material EBITDA differences from the seller's model, with a median gap of $180K. Sellers with documented revenue…
Why Your P&L Shows a Profit But Your Business Isn't Fundable
EBITDA quality adjustments can reduce reported EBITDA by 12–18% in LMM transactions. The P&L will not show that difference; the offer will.
9 Signs Your Business Isn't Sellable Right Now
35–40% of lower middle market deals fail after LOI, most due to conditions that were present before the process started and never addressed.
Preparing Your Team for a Sale Without Triggering Premature Disclosure
Management teams briefed 3–6 months before launch are materially better prepared for buyer diligence. The art is preparing them without triggering…
Retaining Key Employees During a Sale Process: What to Do Before They Find Out
Key employees often sense a sale process before formal disclosure. Retention planning has to start before the process, not after rumors begin.
Transaction readiness checklist for founder-owned businesses
A practical framework for evaluating where a founder-owned business stands relative to what a credible transaction process requires.
Why transaction readiness starts before the CIM
Buyers underwrite reporting quality, management cadence, and confidence in what the numbers actually mean.
How to Reduce Owner Dependency Before Selling Your Business
On a $4M EBITDA business, a 0.7x owner-dependency discount is $2.8M of enterprise value, gone before the LOI is ever signed. The good news: it's the…
What Is a Quality of Earnings Report? A Founder's Guide to Sell-Side QoE
A $200K addback challenge at 6x is a $1.2M reduction in enterprise value. Most founders encounter their first QoE during a live process, when there's…
EBITDA quality: what it is and why it determines deal outcomes
Sell-side QoE reports typically reduce the seller's stated EBITDA by 10–20%. At 5x, every $100K of challenged addbacks is $500K of purchase price.…
How AI Can Accelerate M&A Preparation for Founder-Owned Businesses
AI compresses the most time-intensive M&A preparation tasks by 60–80%. But it only works if the underlying reporting infrastructure is already clean,…
The hidden cost of owner dependency in middle market transactions
Owner dependency is flagged as a material concern in the majority of LMM PE diligence reviews. It shows up as a 0.7–1.2x multiple discount, rarely…