We signed an LOI, and the buyer wants low-level system access and team interviews immediately. How do we sequence these disclosures safely?

Question

Tyler Smith · Accepted Answer

Once you sign the Letter of Intent, the clock is ticking, and the buyer's diligence team will want to dig into everything at once. They will demand direct access to your leadership team and sensitive operating systems. If you open the gates too early, you risk distracting your team and exposing your proprietary operational processes before you have a binding commitment to close. You must negotiate a strict, phased disclosure schedule in your LOI.

Divide your diligence into three distinct gates:
- Gate one covers standard financial and tax audits, including the buy-side Quality of Earnings review.
- Gate two opens after the initial financial findings are validated, allowing the buyer to review systemized workflows and standard operating procedures without direct employee contact.
- Gate three, which includes direct interviews with your Accountability Chart seat holders, only occurs after the first draft of the purchase agreement is negotiated and major terms are locked.

This phased approach keeps your leadership team focused on running the business and achieving their quarterly Rocks. It also prevents the buyer from learning your operational secrets and then walking away or re-trading the price at the last minute. Maintain control of the process and protect your IP until the deal is real.