In 2012, Tatango got its first unsolicited LOI. A letter of intent from a big public company that wanted to buy us.
I was thrilled. Someone actually wanted to buy the business I had poured everything into for five years. And it was a legit, public company. We had made it.
I told a very experienced entrepreneur we had the LOI and were seriously thinking about selling. He looked me straight in the eye and said:
"One bidder is no bidder."
I didn't understand him at the time. I understood him completely in 2025, after we ran a formal process to sell Tatango and got a room full of buyers to the table.
There are two reasons more than one bidder is critical when you sell your business.
First, a caveat. If you hire an investment bank and run a formal process, you will hopefully already have multiple bidders. So this advice is not really for you.
This is for the founder who gets unsolicited interest from a single company. Most first-time founders think that LOI kicks off the sale. It doesn't. Signing an LOI with one buyer, and only one buyer, puts you in a terrible spot. Here is why.
1. You don't know what you're worth
With one buyer, you have no idea what your company is worth. There is no second number to compare against. You are not negotiating a price. You are accepting one. It might even be a good price. But you have no way to know that until other buyers tell you.
An inbound offer tells you what one buyer sees in your business.
A process tells you what the market thinks your business is worth.
Those are not the same thing.
The advisors who run these deals for a living go further. They will tell you that moving from a single negotiated buyer to a competitive process lifts the price somewhere between 50% and 100%. Treat that as a rule of thumb from people in the arena, not a peer-reviewed number. But it lines up with everything I have seen.
When we finally sold Tatango, we ran a formal process built to attract multiple bidders. The difference was night and day compared to our one-buyer scenario in 2012. Instead of squinting at one offer wondering if it was fair, we had competing buyers setting the market value for us.
That is the whole point. You don't want to be the one deciding what your company is worth. You want the market to do it.
And even if the price looks good, you still want other buyers at the table. Because of the second reason.
2. You have no leverage
This is the half of the advice that took me years to appreciate.
You are going to need leverage during an acquisition. Not maybe. You are. And almost all leverage comes down to one thing. Having other options.
The strongest leverage is being genuinely willing to walk away and keep running the company as is. The next strongest is having more than one buyer at the table. And that second kind matters most at the moment you would least expect it. After you have already picked your buyer.
Because that is usually when the games start. The buyer changes terms. Slows things down. Finds reasons to chip away at the number. This is so common it has a name. A retrade. Other interested buyers are the thing that stops it cold, or that give you a real alternative if the buyer you picked goes too far.
The right process
When you get an LOI, the first thing to understand is what it actually is. It is an offer. Nothing more. You might be happy running your company. You might see way more upside ahead. An LOI does not obligate you to do anything. It can result in a simple "Thanks for the interest, we're not looking to sell right now" email.
But if you get the LOI, you do want to sell, and the number is in the right range, the next move is not to negotiate it, or worse, sign it. It is to hire an investment bank and run a formal process to find other buyers.
The question I get every time here: won't the original buyer be offended? Won't they walk away from the deal?
They might act offended. They might say you have 48 hours to decide. It is all a tactic to keep you from bringing other buyers to the table. A sophisticated buyer knows that competition costs them more, so they will do whatever they can to stay the only buyer.
Running a process is not a personal insult. It is good business, and most experienced acquirers understand that, even if they are not happy about it. In all my years working with other entrepreneurs, I have never seen a buyer who actually wanted the business walk away because the founder ran a process. And in every case, the process produced better offers. Either from the original company, or from the new buyers it brought to the table after the first LOI.
The downside of a process
Running a formal process takes time. That time is usually the sticking point for founders. A process can add a couple of months to your timeline.
For a healthy business and a founder who still has gas in the tank, that is no problem. The extra time is well worth it. You will most likely get a higher valuation, you create leverage in the deal, and you raise the odds the transaction actually happens.
For a company burning cash, those extra months can backfire. You burn more cash. You get closer to empty. You end up with less leverage than you started with. And trust me, a sophisticated buyer will see all of this in your financials.
This is a tricky spot. The best move is to not end up here, by running a process before your cash gets too low. But if you are already here, I still think a process is worth it.
For a company running out of cash, the worst place to be is at the end of an acquisition getting beat up on every term, because the buyer knows you have no other options. No other buyers in the wings. No cash left to keep running the company. A process at least brings other interested buyers to the table, which raises the odds you close at the original terms. Because of competition.
One bidder is no bidder. Multiple bidders create value. And leverage is what makes sure the deal you sign is the deal you actually close.