It happens often to successful founders. You check your mail, and there is a professional-looking letter from a Private Equity group or a competitor saying, “We are interested in acquiring a business like yours.”
It feels flattering. It validates your hard work. But getting an unsolicited business offer is rarely as simple—or as profitable—as it seems. Before you reply, you need to understand the strategy behind that letter.
The Danger of the “Proprietary Deal”
These buyers are looking for what is called a “proprietary deal.” In plain English, this means they want to buy your business directly from you, without an intermediary (broker), so they can pay below market value.
When you receive an unsolicited business offer, the buyer knows you haven’t prepared your financials for sale. They are betting that you don’t know your true EBITDA or SDE multiple. Their goal is to get a bargain, not to pay you a premium.
Risks of “Fishing Expeditions”
Some “buyers” aren’t even real buyers. They are competitors trying to get a look at your customer list, your margins, and your supplier contracts. This is known as a fishing expedition.
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Confidentiality Risk: Without a strict NDA, your data is vulnerable.
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Lack of Leverage: If you negotiate with only one buyer, you have zero leverage.
Create Competition
The only way to know if an offer is fair is to compare it against the market. At VR Business Brokers, we create an auction environment to drive the price up.
According to the [Small Business Administration (SBA) – External Link], proper representation significantly increases the success rate of a business transfer.
Don’t let a flatter letter cost you millions. Talk to an advisor who works for you, not them.
Learn about our Seller Representation Services
Frequently Asked Questions
Should I respond to an unsolicited offer to buy my business?
Yes, but carefully. Thank the buyer for the interest, do not share financials until they sign a non-disclosure agreement, and get an independent valuation before you discuss price. A single buyer sets the terms; competition among several qualified buyers usually raises the price.
How do I know if an offer for my business is fair?
Compare it with a professional valuation and look past the headline number. Check how much is paid in cash at closing, how much depends on seller financing or an earnout, the working capital target and whether the buyer’s financing is secured. Read more about business sale deal structure.
Should I tell my employees about an offer?
Usually not at this stage. Early news can cause turnover and worry customers. Most owners share the news only when a deal is close to closing and there is a clear communication plan.