The art (without a manual) of managing timing before signing the LOI
"We’re no longer interested. We’ve been waiting more than two and a half months for a response to our proposal, after improving it several times. We’ve chosen a different path and found an alternative that, frankly, we like even better."
That’s how the conversation ended with the potential buyer who seemed to be the best fit for our client.
Unfortunately, it wasn’t a bluff (as it sometimes is), nor a pressure tactic, nor an aggressive attempt to renegotiate price by taking advantage of the delay.
It was a clean break.
A full stop to any future negotiation.
As was only logical, the buyer had been exploring several options. They had a clear strategic need (one they had identified and openly explained), and the company we were selling was not unique or irreplaceable — it was simply one good option, at the right moment.
But just as the seller had alternatives, the buyer did too.
And while our process dragged on — and while making it clear to them that this was a competitive process — they moved forward with their second-best option.
One that gave them greater clarity.
One that responded faster.
For weeks, we had been warning our client that the offer on the table was excellent, that it met expectations and, frankly, would be difficult to improve upon.
But the client wanted to exhaust every other option.
To be sure they had tested the market.
To make sure there wasn’t something better.
Unfortunately, those other buyers were slower to submit a final offer, slower in their internal process, or had entered the process later for one reason or another.
But today’s article isn’t about the client who waited too long for the “perfect” offer that never arrived and missed the train (although that’s a story for another day).
It’s about something much more structural:
how difficult it is to manage timing in small and mid-market sell-side processes.
The problem starts long before the LOI
In these processes, we prepare the usual materials:
We then contact the buyer universe — usually through a blitz of calls and emails — and share the blind profile.
If they want access to further information on the target, they need to sign an NDA first.
Once signed, they receive:
And that’s where the first timing mismatches begin.
Because buyers never move at the same speed.
Never.
The first gap: signing the NDA
It always happens.
One buyer receives the teaser, responds the same day, signs the NDA without changing a comma, and 24 hours later is already reviewing the documentation and sending specific questions.
Meanwhile, another buyer:
(“We don’t accept Spanish law”, “we need to amend the non-solicitation clause”, “the confidentiality definition is too broad”…)
By that point, they are already six weeks behind the buyer who reacted on day one.
And they haven’t even started reviewing the business.
The differences don’t end when the NDA is signed
But the asynchronicity doesn’t stop there.
Some buyers read everything within days, send a structured first round of questions, and immediately ask for a management meeting.
Others take two or three weeks just to review the materials.
Not because they’re less interested.
Simply because they operate differently:
And then come the meetings.
Some buyers need just one management meeting to decide whether to submit an indicative offer.
Others want to go much deeper and need two or three.
The result is that six to eight weeks after launching the process, every buyer is at a different stage.
And the gap between the fastest and the slowest is no longer measured in weeks.
It’s measured in months.
The process letter: the classic tool to align everyone
The most common way to impose order on this chaos is to send a process letter.
A short document — usually one or two pages — sent to active buyers who have signed the NDA, setting out the formal timeline of the sale process.
A typical process letter establishes the timeline and usually includes instructions on what each offer should cover.
In the type of deals we usually run — where ultimately only one buyer enters exclusivity for due diligence — the process can be structured in one or two phases.
In a two-phase process:
In a one-phase process, everything moves directly to an LOI deadline.
Alongside the dates, the process letter typically outlines expectations regarding:
On paper, the idea is perfect.
Everyone gets the same timeline.
Everyone competes under the same rules.
The advisor controls the process.
On paper.
The problem with sending it on day one
The first dilemma any advisor faces is simple:
when should you send the process letter?
If you send it on day one (or too early) and say, for example, that non-binding offers are expected in eight weeks, you are effectively setting the clock based on the fastest buyer.
The buyer who signed the NDA in 24 hours gets eight full weeks to review, meet management and prepare an offer.
But the buyer who took:
suddenly has only two weeks left.
And when that buyer sees the calendar, they usually do one of three things:
1. Drop out
"Thanks for the opportunity, but the timeline doesn’t work for us."
2. Submit a rushed offer
Usually conservative.
A buyer who hasn’t done the work rarely makes “the offer you can’t refuse.”
3. Ask for an extension
Which immediately creates a new dilemma:
Do you grant it and disrupt the timeline you just imposed on everyone else?
What you learn over the years
One of the things you learn after running enough processes is that it’s almost never a good idea to send the process letter on day one.
We usually send it when enough buyers are aligned.
Not all of them.
That almost never happens.
But enough of the relevant ones.
Of course, that creates another issue.
The fast buyers start asking questions.
“What’s the timeline?”
“Will there be a process letter?”
“When should we submit?”
And the answer needs to provide structure without providing dates.
A formulation that works for me is something like this:
"We’re currently finalising the formal timeline. It has taken us longer than expected to reach some priority buyers at the top of our target list, so we’re waiting to align them before sending the process letter. We’ll keep you updated as soon as it’s finalised."
Usually, that works.
Although fast-moving buyers will often try to use their advantage by submitting an early offer with a short validity period, hoping to prevent the process from becoming fully competitive.
Sometimes you don’t send a process letter at all
This happens more often than people think.
There are processes where, after a few weeks in the market, the picture becomes clear:
there aren’t ten interested buyers.
There are two.
Or three.
And that’s it.
The company hasn’t generated a flood of interest.
In that scenario, sending a process letter can actually be counterproductive.
If you impose a hard deadline with only three active buyers — all at different stages — one or two will probably say they need more time.
Or simply drop out.
And suddenly you risk ending up with only one buyer.
And no matter how much you would never tell them:
"you’re the only one left"
they know.
Or at least suspect it.
And that changes everything.
In those cases, you do the opposite
You stretch time.
You work each buyer individually.
You accelerate the slow ones without pressuring the fast ones.
You keep everyone alive.
You make sure the buyer who already submitted doesn’t become frustrated.
And you gently push the buyer who is lagging behind.
It becomes a balancing act.
Without a manual.
A balancing game with no playbook
Managing timing in a sale process is an exercise in balance.
There is no definitive playbook (and if there is, someone please send it to me).
Setting deadlines from day one works when you are selling a jewel.
A business you know will generate massive demand.
In those situations, deadline pressure accelerates the market, creates order and puts the seller in control.
But if you apply that same pressure in a process where demand is lukewarm, you often create the opposite effect.
Buyers drop out.
Deadlines move.
Extensions appear.
And then you reach that awkward M&A moment:
"Yes, yes, don’t worry… the deadline was actually ten days ago, but don’t worry, I’ll give you another week to submit the offer."
And that — however you dress it up with:
"It’s an exception just for you because you’re our client’s preferred option"
is a very clear sign of weakness.
There are very few innocent people left in this industry.
But the choreography still has to be performed
By Joshua Novick, partner at Bondo Advisors
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