How to Sell Your Business to Private Equity the Smart Way

If you’re a small business owner and a private equity (PE) firm has expressed interest in acquiring your company, you’re not alone. Many PE firms are actively looking to buy stable, cash-flowing businesses—and yours might be a perfect fit.

But before you celebrate or sign anything, take a breath. The way you respond can dramatically impact your valuation, your leverage, and ultimately, your outcome.

Here’s how to sell your business to private equity without leaving money—or control—on the table.

What to do when private equity comes sniffing

1. Call a Broker Before You Do Anything

Most owners only sell a business once. PE firms buy them all the time. That experience gap can cost you.

Working with a business broker helps you:

• Evaluate the seriousness of the offer
• Identify other potential buyers
• Increase deal competition
• Stay in control of the process

A broker doesn’t just help you sell—they help you sell better.

2. Get a Professional Valuation

You can’t negotiate effectively if you don’t know what your business is worth.

Before you sell your business to private equity, get a third-party valuation. This gives you:

• A realistic price range to work from
• Leverage in deal conversations
• Insight into how buyers perceive your company’s value

It’s one of the most important steps in any sale process.

3. NDAs Are Normal—But Be Selective

Private equity firms will almost always ask you to sign a Non-Disclosure Agreement (NDA) before reviewing your financials. That’s fine—and standard.

But don’t hand over everything.

What to share at first:

• High-level financials
• Revenue and EBITDA trends
• General business overview

Save the detailed playbook for after you’ve seen a clear path toward an offer.

4. Don’t Sign Exclusivity Too Early

This is a common mistake. A PE firm may ask you to sign an exclusivity agreement—blocking you from talking to other buyers—early in the process.

Don’t do it.

Until you see:

• A credible valuation range
• A defined path to a Letter of Intent (LOI)
• Real movement toward a deal

…you should keep your options open. Exclusivity kills leverage.

5. Ask for a Price Range and Clear LOI Timeline

Serious buyers won’t keep you guessing. Before you share sensitive data or commit time to deep due diligence, ask:

• What price range are you thinking?
• What’s your target timing for an LOI?
• What does your investment committee need to see?

If they can’t answer those questions, they may just be testing the waters.

6. Use a Broker to Attract or Leverage Multiple Offers

Even if you’re happy with the initial interest, it pays to test the market. A broker can:

• Quietly present your business to other potential buyers
• Create a competitive environment
• Use multiple offers to increase price or improve terms

When you sell your business to private equity, competition increases your power—and your payout.

Why This Matters: Business Resiliency and Exit Value

If private equity is showing interest, you’ve built something valuable. But getting a great deal requires more than just responding to an email.

It requires strategy.

Business resiliency—your ability to operate without you in the day-to-day—is a key factor in both valuation and buyer confidence. Whether you plan to sell now or in a few years, strengthening your team or bringing in a general manager can elevate your business’s appeal to PE firms.

Ready to Talk Strategy?

Whether you’ve already been approached or want to prepare for the future, I help business owners:

• Navigate private equity interest
• Get formal valuations
• Exit on their terms

Or place a general manager to step away from the day-to-day

📩 joe@legacy-eta.com

📞 615-240-7901

Let’s make your next move the right one.