An independent sponsor deal moves through five stages: introduction, LOI, diligence, definitive documents, and closing. Knowing what happens at each stage helps founders manage time, energy, and disclosure.
Stage 1: introduction and IOI
The sponsor learns about your business through a banker, broker, or personal referral, requests a CIM, and issues a non-binding indication of interest with a valuation range.
Stage 2: LOI
After meetings, the sponsor narrows to a specific price and structure in a letter of intent. The LOI is non-binding except for exclusivity, which typically runs 60 to 120 days.
Stage 3: diligence
Quality of earnings, legal, commercial, environmental, and operational diligence run in parallel. You will spend significant time responding to data requests.
Stage 4: definitive documents
Purchase agreement, employment agreements, rollover documents, and financing commitments are negotiated.
Stage 5: closing
Funds flow, ownership transfers, and your post-close role begins.
If you are evaluating a transaction in this space and want a candid second look, Solender Capital is happy to compare notes. Reach out through our contact page and share what you are working on.