If you’re prepping your business for sale, here’s one truth you need to grasp up front:
Not all buyers think the same.

An individual buyer isn’t looking for the same things as a private equity firm. Different deal strategy. Different psychology. Different priorities. And if you don’t understand the distinction, interests won’t align and your deal may not close a deal. Let’s get into it:

The Operator Class (Upper Main Street)

These are searchers, first-time acquirers, former execs, or lifestyle buyers. They’re often deploying more traditional deal structures:

They buy 100% of a company by putting down 25%-35% of the purchase price, get a term loan from a bank, and maybe bridge the gap with a vendor note (VTB).

They want to buy a business and operate it hands-on, ideally one that is profitable and doesn’t come with 80-hour weeks.

Here’s what they care about:

Here’s what they fear:

They want to know: “If I step into this business tomorrow, will the boat get rocked?”

The Sophisticated Buyer Class (Lower-Middle Market)

Now flip the script - Private equity, Strategic acquirers, Family offices. These buyers look at things differently. They propose more complex deal structures:

Majority/minority acquisition. Growth investments. Buyouts leveraging forms of senior debt, mezzanine and junior debt. Management buy ins/outs. Earn outs, equity rollovers.. the list goes on. They’ll often retain the exiting owner(s) after the sale via employment contracts, financial incentives, and board seat appointments. Their priority is meeting a desired return or hurdle rate, attaining scale, and they may have a 5-7 year exit map built into their acquisition strategy.

They’re looking for market share, a platform, or to vertically integrate in many cases. They bring capital, teams, and infrastructure.

Here are some of the things they care about:

Here’s what they fear:

They want to know: “Can this business handle the influx of growth when we plug it into our machine and leverage our infrastructure?”

That’s the game at this level. If you’re still managing key client relationships and negotiating every deal yourself? You may not attract this type of buyer.

Why This Matters

Owners have very different conversations when they market their business to everyone. One week they’re pitching a searcher. The next, a strategic. Each one has their own priorities and line of questioning, values different things, plans different exits. Keep this in consideration when positioning your business’ highlights during management meetings and qualifying conversations.

People often mistake deals as financial transactions. In fact, their success largely depends on qualitative rather than quantitative. The people, the relationships - for a deal to succeed, it has to be the right fit where value and vision aligns.

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