A guide to drafting, signing, and sending an acquisition offer to a seller
Last updated: September 21st, 2023
Once you’ve narrowed down your shortlist of acquisition targets, light diligence will tell you which one is the best fit, conditional on it passing deeper due diligence checks.
You’re now ready to make an offer. To respect both of your time, ensure your offer is fair and entices the seller into further negotiations.
Never make an offer without speaking to the seller first. The seller is far likelier to treat your offer seriously if you've met and spoken to each other, even virtually.
1. Draft a letter of intent (LOI)
The easiest way to draft, sign, and send your LOI is with our LOI builder.
Hundreds of buyers have closed acquisitions using the LOI builder with more and more buyers preferring it to the hassle of manual documents.
It only takes a few minutes to build an LOI and the builder pulls through listing details, your and the seller’s information, and a standard LOI legal wording. You can also customize it with additional terms and conditions.
Otherwise, you can upload your LOI manually and send it through the platform.
Your LOI must include:
- The offer price.
- Terms and conditions.
- A validity period.
2. Send Your LOI
With the terms and price set, sign and send your letter of intent to the founder.
On Acquire.com, you type your signature when prompted and then send it through the platform. If you drafted your LOI outside of Acquire.com, sign it, and then upload it to send it through the platform.
We recommend using Acquire.com to share acquisition documents since the details carry through each stage of the acquisition, saving you time, and leave a verifiable audit trail of your transaction for security.
Before sending your LOI:
- Check the startup and founder details are correct.
- If required, consult legal counsel.
- Sign and date it. If using our builder, sign as an entity or individual.
3. Negotiate LOI
Finalize an offer that makes you and the seller happy.
The seller might counter your offer with an alternative price and terms. You might accept the counter or reconsider the components of your offer to close the deal.
For example, the purchase price typically includes, in varying proportions:
- Cash (payable on closing)
- Earnout or holdback (payable on performance)
- Seller financing (payable over time)
Ready to make an offer? Discover how to draft an LOI in minutes with our builder.
Making an offer with Acquire.com founder, Andrew Gazdecki
- How the Letter of Intent (LOI) Builder Works
- How to Write a Letter of Intent
- Acquire.com Biannual Multiples Report
Letter of intent (LOI)
A formal, written document indicating the terms a buyer is offering a seller in a proposed acquisition. Although not a contract, it is a document stating a serious intent, and may be legally binding in some circumstances. Consider the LOI as a starting point for negotiations.
Seller’s note (seller financing)
A seller's note, or seller financing, is where the seller agrees to receive a portion of the purchase price in installments. The buyer adds this debt note to the startup’s capital stack, and the seller becomes in effect, the startup’s creditor.
If there’s a chance the founder or their employees might compete against you, include a non-compete clause in the LOI. This clause prevents the founder or their employees from operating a similar business in the same industry for 12 months or more.
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