Begin by identifying the exact legal entity that would sign and fund the purchase. Ask for its full legal name, place of formation, principal address, and the names of people authorized to negotiate. Confirm who can approve the transaction and whether investment committee, lender, family principal, or other approval remains outstanding. If the buyer says funding is committed, ask what that means and what conditions remain. Have counsel review relevant public records and transaction documents.
Check the buyer’s experience with firms similar to yours. Request references from owners who have sold to the buyer, and ask permission to contact them directly. Ask how the buyer behaved after closing, whether management roles changed, how it handled staff and clients, and whether the final terms matched the initial proposal. When possible, speak with more than one reference and ask specific questions rather than “Would you recommend them?” Review prior deal announcements and public filings, while treating promotional claims as unverified until supported.
Pay attention to the diligence process. A credible buyer should be able to explain what information it needs, why it needs it, who will see it, and how it will protect it. Start with high level summaries, then provide sensitive material through a controlled data room after counsel reviews the confidentiality agreement. Keep an access log and a record of what was shared. Ask how long the buyer expects diligence to take and what events could change the schedule.
Watch for gaps that need explanation, such as a buyer that will not identify its acquisition entity, cannot describe its funding path, requests broad access before signing confidentiality terms, or presses for exclusivity without clear commitments. Urgency by itself does not prove misconduct, but it can make it harder to compare options calmly.
Have transaction counsel assess the proposed confidentiality and exclusivity terms before you commit. A checklist can help structure review, but it cannot guarantee a sound counterparty.
This is general education, not legal, tax, investment, or engineering advice; licensed PE judgment and local codes govern.
