How to evaluate an unsolicited offer for your company

By Michael D. Rubin, CEO & Founder · September 2026 · 1,516 words

An unsolicited offer is a data point, not a valuation — and the fact that you received one is more useful than the number attached to it. Somebody has concluded your company is worth acquiring. That is worth knowing. What it is worth, and to whom, is a separate question that the offer itself cannot answer.

Here is how to think about it before you respond, and what to do in the first two weeks.

Why the first offer is rarely the best one

A buyer approaching you directly is doing so for a reason: it avoids a competitive process. There is nothing improper about that — it is good practice on their side — but it means the offer is calibrated to be attractive enough to stop you looking, not to reflect what the market would pay.

The economics are simple. In a competitive process, several buyers value the same business differently: a strategic acquirer with cost synergies, a private equity group building a platform, and an individual buyer will all arrive at different numbers for identical financials. A single buyer only has to beat your alternative of doing nothing.

In practice, the spread between the highest and lowest credible offers for the same company is commonly 20% to 40%. An unsolicited offer is one draw from that distribution, and you cannot tell where it sits without the others.

The first four things to do

• Do not say a number. The single most costly response is to counter with a figure before you know what the company is worth. Whatever you say becomes the ceiling.
• Find out who they are and what they have bought. A funded strategic acquirer, a private equity group and an individual with a plan to obtain financing are three completely different counterparties, with different prices and different odds of closing.
• Get an independent view of value. A confidential opinion of value costs nothing and takes days. It converts the conversation from 'is this a lot of money' to 'is this a fair price'.
• Say nothing to anyone else. Not your team, not your largest customer, not the industry association. Why confidentiality matters here too.

Reading the offer itself

Assuming something in writing arrives, the headline is the least informative part of it. Look for:

• What the number covers — enterprise value, or the amount you receive? Cash-free, debt-free? Is real estate in or out?
• How much is cash at closing versus earnout, seller note or escrow. How to compare offers properly
• Working capital — is a target defined, and how is it calculated?
• Exclusivity — how long are you agreeing not to speak to anyone else? This is the clause with the sharpest teeth.
• Financing condition — is the offer subject to obtaining funding they do not yet have?
• What is expected of you afterwards — transition period, employment agreement, non-compete scope and duration.

The exclusivity trap

Most unsolicited approaches lead to a letter of intent with an exclusivity period of 60 to 90 days. During it you cannot talk to other buyers.

That is the moment your leverage disappears. Everything discovered in due diligence from then on is discovered while you have no alternative — which is exactly why retrading is most common in bilateral deals. If you sign exclusivity, keep it short, tie extensions to milestones, and know what your position is if it lapses.

When taking the offer is the right answer

Sometimes it is, and an honest advisor will tell you so.

• The buyer is a genuine strategic acquirer for whom your business is worth more than to anyone else — a competitor who removes duplicate cost, or an acquirer who needs your license, location or customer
• The number is at or above what a full process would realistically produce, and you have checked that independently
• Speed and certainty matter more to you than the last increment of price
• A process would carry real risk of exposure in a small industry where a leak would be damaging

Even then, run a limited market check first. Approaching four or five likely buyers quietly takes weeks, not months, and either confirms the offer is strong — which makes accepting it easy — or produces a better one.

What a competitive response looks like

Where an owner decides to test the market, the sequence we use is:

• Establish a defensible value, and agree what would make you sell
• Keep the original buyer engaged and informed, without exclusivity
• Approach a shortlist of buyers who would plausibly pay more, confidentially and quickly
• Bring several letters of intent to the table at the same time
• Compare on cash at closing and certainty of completion, not on headline

The original buyer often wins that process — at a higher and better-structured price, because they now have to. That outcome is common enough that it is worth a fortnight of your time before you sign anything. The full ten-step process is here.

If you take nothing else from this

An unsolicited offer tells you that you have something someone wants. It does not tell you what it is worth, and responding as though it does is the most expensive mistake available to an owner in this position.

Before you counter, before you sign exclusivity, before you tell anybody — find out the number independently. It costs nothing and it changes the conversation entirely.

What to do this week

If an approach has just landed, the order matters more than the speed. Reply politely and without a number, asking who they are, what they have bought and how a purchase would be funded. Tell nobody inside the business. Ask independently what the company is worth, which costs nothing and takes days rather than weeks.

Then decide, with a real number in front of you, whether to negotiate with this buyer alone or to find out what three or four others would pay. That decision is worth taking a fortnight over — it is routinely worth a fifth of the price — and it is very difficult to revisit once exclusivity is signed.

Who is actually approaching you

Approaches come from four sources, and what each one is worth to you differs enormously.

What to say in the first conversation

You do not have to be evasive, and you should not be forthcoming. A straightforward script:

"Thank you — we are not on the market, but I am always willing to hear what someone has in mind. Before we talk about numbers, tell me who you are, what you have acquired before, and how a purchase would be funded."

That does three things: it does not decline, it does not commit, and it puts the burden of disclosure on the party who started the conversation. If they will not answer those three questions, there is nothing to evaluate.

Do not send financials at this stage. Anything you send should be under a confidentiality agreement, and by then you should have your own advisor reading the same documents.

If you decide to proceed with them

• Get an independent value first. Everything else depends on it.
• Do not sign exclusivity early, and when you do, keep it short and tie extensions to milestones.
• Insist on the working capital definition in the letter of intent, not the purchase agreement.
• Ask for their diligence request list up front, so you know the scale of what is coming.
• Keep a credible alternative alive, even if it is only the genuine willingness to keep running the business for three more years.
• Bring in a transaction attorney before the letter of intent, not after. The LOI shapes everything that follows, even where it says it is non-binding.

The cost of getting this wrong

There are two ways an unsolicited approach costs an owner money, and both are avoidable.

The first is accepting a fair-looking number that a competitive process would have beaten. That cost is invisible — you never see the offer you did not receive — which is exactly why it is so common.

The second is spending six months in exclusivity with a buyer who could not close, emerging with your team unsettled, your numbers softer, and your negotiating position gone.

Both are prevented by the same fortnight of work: find out what the company is worth, find out who the buyer really is, and find out whether anyone else would pay more. Start with the number — it costs nothing and nobody is contacted.

Sources and further reading

• The M&A Source
• IRS — sale of a business