What 'Running a Process' Actually Means When You're Selling Your Startup

Most founders first hear the phrase "run a process" from a potential acquirer. Usually the advice is: "You should run a proper process before deciding." What they actually mean is: "Create competitive tension so I don't get to dictate price."

Understanding what a process is . and isn't . is the first step to deciding whether you need one.

What a process is

A structured sequence of steps that creates competitive tension, maximises information asymmetry in your favour, and moves multiple buyers toward a decision simultaneously.

The stages: 1. Preparation (4–8 weeks): CIM, financial model, data room, management presentation 2. Buyer outreach (2–4 weeks): Targeted list, non-disclosure agreements, initial meetings 3. Indications of Interest (IOI stage): Non-binding offers to establish price range 4. Management presentations (2–4 weeks): Deeper diligence with 3–5 shortlisted buyers 5. Letters of Intent (LOI stage): Binding/semi-binding offer, exclusivity negotiation 6. Confirmatory diligence (4–8 weeks): Legal, financial, technical . under exclusivity 7. Purchase agreement and close (4–8 weeks): SPA, disclosure schedules, closing conditions

Total timeline: 4–9 months typical. 6 months is the mode.

When you don't need a full process

• Single inbound acquirer who has strategic and financial logic aligned with your goals
• Deal size under $10M (advisor fees reduce net value)
• You have existing M&A transaction experience (you've sold before)
• Acquirer is committed to a specific deal structure that works for you

When you absolutely need a process (and an advisor)

• Multiple interested parties and you're not sure how to sequence them
• Deal size over $15M (the value of competitive tension almost always exceeds advisor fees)
• First time selling a company (every asymmetry favours the buyer without a process)
• No inbound . you need to proactively identify and approach buyers
• Complex cap table (multiple VCs, employee option pool, debt) requiring coordination

What a banker/M&A advisor actually does for you

• Builds the buyer universe you haven't thought of (the non-obvious buyer is often the highest bidder)
• Creates and manages competitive tension without you having to play both sides
• Keeps the process moving when diligence bogs down (it always does)
• Negotiates purchase agreement terms you didn't know mattered
• Manages founder distraction . you can run the company while they run the deal

What bankers cost and how to evaluate it

• Mid-market M&A advisors: 3–5% of deal value (below $50M), 1–3% (above $50M)
• Minimum fees: typically $300K–$750K for deals under $20M
• Performance structure: retainer + success fee
• Evaluation criteria: who has sold companies in YOUR sector at YOUR size . ask for references

Thunder's model (transparent positioning)

Thunder advises founders at the $5M–$75M ARR scale . the stage where the decision between a process and a direct deal is highest-stakes and where most founders have the least experience. The Founder Clarity Session is a free, no-pitch way to understand whether a process is right for your situation.

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