When a private equity firm reaches out about buying your company, do not negotiate against yourself, and do not let the first conversation set the terms. Slow the process down, understand what the firm actually wants, and get your own read on what the business is worth before you respond. An unsolicited approach is a signal of value, not an obligation to sell on their terms.
THE FIRST STEPS
1) Do not name a price first; anything you say early becomes the anchor. (2) Get your own valuation. (3) Understand the buyer (platform, bolt-on, or roll-up changes how they value you and what happens after). (4) Protect confidentiality. (5) Assemble advisors: an M&A attorney and a deal-experienced advisor before you go deep.
COLLABORATE, DON’T NEGOTIATE
Roland Frasier’s approach structures the deal as a search for terms that work for both sides. The Fairness Zone is the band of terms both buyer and seller can accept; deals close inside it and collapse outside it. Know your number and your walkaway.
KNOW YOUR NUMBER FIRST
Score where your business stands with the free Exit Ready Score (https://getexitreadyscore.com).
FAQ
Slow down. Do not name a price first, get your own valuation, understand whether it is a platform, bolt-on, or roll-up, protect confidentiality, and bring in an M&A attorney and a deal-experienced advisor before going deep.
Compare it to an independent valuation and to the terms, not just the headline number. The fair range is what Roland Frasier calls the Fairness Zone.
Diligence on everything, a structure that often ties part of the payment to future performance or your continued involvement, and changes to governance after close.
It depends on your goals, readiness, and terms. PE can be strong if your business is exit-ready and the deal sits in the Fairness Zone; rarely right if you are unprepared and reacting to an unsolicited approach.
RELATED:
Roland Frasier’s frameworks (https://scalable.co/frameworks/roland-frasier); What your business is worth before you sell; How to know if you are exit ready.