How to go from first call with Seller to LOI?

by a searcher from Duke University

2 months ago

I am a self-funded searcher in central North Carolina looking for manufacturing and industrial services companies. I recently did a direct mailing campaign and my message seems to be resonating because business owners have started calling me. The first call usually goes great but then the trouble comes. I don't have a good process to go from first call to LOI. I have sold an F500 business unit before but I never interned with a search fund, or did an ETA bootcamp, or attended an ETA conference. I think I mostly need practice / more reps in talking to business owners.
Anyone that does done the reps willing to jump on the phone and share their process with me?

*Title updated

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23 comments

searcher from Mercer University

Lately I've been leading with an IOai or LOI, even before the Seller call. I have been exclusively Sourcing through brokers so my goal has been to accomplish the following within a 48 to 72 hour time frame (1) first target an opportunity I like at face value from a brokers site (2) send my full buyer profile, proof of funds, signed NDA to the broker if we haven't already met (3) schedule a call with the broker for intros and to learn about the business (4) review the CIM and submit any additional questions to the broker (5) submit an IOI or LOI - as a conversation starter.

That usually gets the brokers attention and leads to a call with the Seller, followed by an in person meeting (if local) and then a signed LOI after a round of negotiations.

I try to get a "conversation starter" LOI out to the broker/ Seller as fast as possible to build confidence that I'm a serious buyer and not just a "tire kicker" and then take time to refine it before securing signatures and going into DD.

2 months ago | like reply | 0 likes

searcher from University at Buffalo, State University of New York - School of Management

It's a sales job. Identify if they are a prospect. If not next. Bring a NDA with you for the meeting so you can get some basic financials. Then check if the dog hunts. If not next. Have another meeting on what you can offer. Confirm deal points. Have your attorneys draft LOI.

2 months ago | like reply | 1 like

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