Preparing to Sell to Private Equity: Advice From the Buyer's Side

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 708 words

Private equity buyers tend to give owners the same advice: start preparing years before you sell, hire a deal attorney who has done it many times, and fix the issues buyers will find before they find them, so the sale does not stall into deal fatigue. Owners who follow it usually sell faster and on better terms, because the buyer spends its effort on the company's future instead of cleaning up its past.

A private equity group invests pooled capital in private companies, usually planning to grow them and sell again later. In the lower middle market, these groups buy companies outright, buy a majority and leave the owner a stake, or buy smaller companies to add to one they already own. Our answer on finding private equity buyers for your company covers how to reach them.

They see the years behind the company

Experienced investors know that most apparently sudden successes rest on years, often decades, of unglamorous work. What they want to understand is whether that success depends on the founder's personal effort or on something that will last: a team, a system, a customer base with reasons to stay.

The best preparation is making the second answer true. Founders who grew a company by bringing in capable people, and then letting those people lead, are the ones private equity groups most want to back. In practice, a buyer will spend time with your managers, not only with you, and judge whether they can run the company under new ownership.

Start preparing earlier than feels necessary

The ideal time to start preparing is at founding; the next best is now. That does not mean selling now. It means running the company the way a buyer would want to find it. The items private equity buyers probe hardest are also the ones that take longest to fix. Our answer on how working capital affects the final price explains why the last item on this list surprises so many sellers.

• Customer concentration. Reduce dependence on any single account by adding customers over time.
• Supplier concentration. Qualify a second source for every critical input.
• Financial statements. Timely, accurate monthly statements and, for many buyers, reviewed or audited annual statements.
• Working capital. Know the normal level of receivables, inventory and payables your company needs, because buyers set a working capital target, called a peg, in the purchase agreement.

Hire a deal attorney, not just a good attorney

Private equity buyers often point out that an experienced transaction attorney on the seller's side makes deals go better for everyone. A lawyer who has negotiated many purchase agreements knows which points are market standard and which are worth a fight, drafts quickly and keeps the documents moving.

A lawyer new to deals may treat every buyer request as a threat, run up time and fees, and leave the buyer's team wondering whether the deal will ever close. That uncertainty has a cost, and it usually lands on the seller.

Deal fatigue is a real risk

Deal fatigue is what happens when a sale drags on: the parties grow tired, small disagreements become large ones, and a deal that made sense in month two dies in month six. Its most common cause is an owner doing two full-time jobs at once, running the company and preparing it for sale, while results slip and responses slow.

The remedy is doing the preparation before the process begins, so the months under a letter of intent are spent answering questions, not creating documents. It also helps to have an advisor run the process, so you can keep running the company and the buyer keeps seeing results that support the price.

How MDR & Associates prepares owners for private equity

Our database of qualified buyers includes private equity groups, and in 2023 MDR & Associates was named to the Axial Advisor 100, a list of the lower middle market M&A advisors and investment banks most referred by the buy side. We recast your financials, prepare the confidential marketing package and HD video, and manage the process so you can run the company. Owners who want to prepare in the 12 to 24 months before a sale use our pre-exit consulting. To start, try the free valuation snapshot.

Where this fitsExit planning for Texas business owners →

Questions owners ask next

Will a private equity buyer want me to stay after the sale?

Often, at least for a transition, and sometimes longer. Many private equity groups prefer to keep existing leadership and may ask the owner to roll part of the proceeds into the new company, so the owner shares in a later sale. If you want a clean exit, say so early, because it affects which buyers fit.

Do I need audited financial statements to sell to private equity?

Not always. Many lower-middle-market deals close on reviewed or well-prepared internal statements, supported by the buyer's own quality of earnings review. Audited statements can help, especially for larger companies, and make due diligence smoother. Ask your advisor what buyers for a company your size typically expect.