Mastering the Art of Selling Your Business | M&A Tips from The Deal Room Podcast

Hello and welcome back to The Deal Room and a happy new year to everyone. Stephen, before we begin, how's it been for you? Back in, back in business 2025.

Yeah. Happy New Year, Ant. It's been a, it's been a really nice break actually. I was, I was speaking to you offline. I was saying, look, we've managed to avoid the various illnesses that always transpire over Christmas. We actually had a A brilliant time. Got some nice presents, which is always important. And, yeah, just generally stayed out of trouble. What about yourself?

Yeah, one of the biggest challenges I had this Christmas was the Elf on the Shelf. So, I've not done this yet ever before, but my 6-year-old was like desperate for Elf on the Shelf. She was like, "When's the elf coming?" So, basically for 31 days, I had to creatively, strategically put the elf somewhere new and There's going to be people listening thinking, yeah, I've done that year after year, it's easy. But I found it super hard. If anyone wants to share their most creative place that they put that elf, please do let me know for next year because I found that a real tough call.

I've, I've never even heard of Elf on the Shelf. Have I been kind of, uh, maltreated when I— in my, in my formative years? Do I need to talk to my parents about something I've missed out on?

I'm not going to answer that. I'm going to let, I'm going to let the listening public leave a comment as to whether or not they, they participated in Elf on the Shelf. You're going to have to look it up, Stephen. You'll see some interesting images on Google.

All right, done. There we go.

In this episode, what's really great, you sent me over the, the kind of skinny of what you wanted to cover. I thought this is great because this really, you know, first episode of the year, let's just step back, you know, you know, you mentioned to me offline, we talk about big deals all of the time, but we've never really got into the nuts and bolts of things. And so this is going to be a perfect listen for if you're a business owner, an entrepreneur, if you're thinking about going into M&A and advisory or private equity. This really does have really wide appeal because what you're going to do is you're going to walk us through the entire process from beginning to end to committing to a sale, preparing for that, creating a competitive process, negotiations, due diligence, the whole nine yards. So where do we begin?

Well, I think it's worth beginning by saying that to an extent, no two deals are alike, right? Because to a greater or lesser extent, no two businesses are alike. So there's going to be nuances and there's going to be differences, and businesses are set up in so many different and creative ways. Ownership structures, different geographies, all of this kind of stuff. But I think there are some consistent threads that we can pull on when mapping out what a deal process looks like from start to finish. And what we're going to do is we're going to assume, and I like assuming this kind of stuff, I like kind of dreaming. We're going to assume that me and you and We are running, successfully running, a £30 million revenue, £5 million EBITDA software business growing 30% a year. And look, we're getting towards the time where the attraction, the attractiveness of buying a little island and chilling out there for a few years in our retirement is starting to outweigh the kind of daily grind of running this business. So we, are considering selling this £30 million revenue business. And quite frankly, we've never sold a business before. We know that we've got a nice business. We know that someone is willing to buy it, and we are just starting on that process. So, as you mentioned, there are 5 stages that I want to talk about with regards to our first conversation about selling through to closing, getting that money in the account and buying our lovely island. So the first stage is what I would call committing to a sale, right? A sale process for any business is really, really hard. It's a long process. It's emotionally draining. It has the potential to distract you from your day-to-day running of the business. So before you even launch in and prepare for a sale, you need to ask questions like, why do we want to sell? It may seem stupid, you know, and the answer might be we want some money, but let's peel below those layers and just think, all right, what are our motivations? What are we going to do after the business is sold? And do you want to stay within the new company framework? You know, depending on who we sell it to. Do I want to leave? Do I want to just cash out straight away? What are the motivations for the sale? Once we've kind of squared those away, it's definitely worth thinking, is the timing right? Like, not only from a market perspective, i.e., you know, is there, you know, what are interest rates like? What's M&A activity like? Is it picking up in our particular sector? But also from an internal perspective, is the business at that really, really nice sweet spot where we have proven that lots of stuff is going in the right direction. There aren't any kind of nasties, things that we don't really want to talk about in due diligence. So some form of liability, a contract that we've just— a massive contract that we've just lost, a key employee that's just left. You want the timing to be right. Where we can put our best foot forward as a business and say, look, this is a quality business. There's no skeletons in the closet. We've been growing nicely for the last few years, but we think that there is an acceleration that needs to come through a sale. So the timing is extremely, extremely important.

So, so would there be different narratives depending on where you said they're like the proof of concept? So depending on, just explain to me very briefly if you can, they have different rounds of funding where, what, you'd be pitching something slightly different at that point?

Yeah, it's really, yeah, it's a very, very good question. And I think there's a difference between raising money and selling your company, right? So let's take selling your company. There are, obviously there are different types of potential buyers and the story that you're telling to different buyers is going to be slightly different. So, you know, we would have this conversation, me and you, when we're thinking about selling this company, we would be thinking, all right, who's likely to buy this company? Is it going to be one of our competitors, one of our larger competitors, or is it going to be a private equity firm? And which one of those two is more attractive? Which one of those two buckets is more likely? And what kind of narrative, what kind of story do we need to say do we need to tell to each of these two different potential buyers? Now, if I'm talking— if I'm trying to sell my company to a strategic or trade buyer, my US competitor that's 10 times bigger than us, I'm going to tell the story about, you know, our unique advantage, our market positioning, um, how we can complement a larger player by bringing some amazing pieces to the puzzle to the table. Whereas if I'm trying to sell to a private equity firm, I'm going to be like, all right, strong cash flows, solid growth, massive opportunity to expand, good total addressable market, great unit economics, dot, dot, dot. If I'm just trying to raise money at an earlier stage, yeah, you go much more into vision mode, right? You go, all right, this is the future. This is how this company could become a billion-dollar business. But at the stage that we are at, £30 million revenue, been around for about 10 years, £5 million EBITDA, we've already kind of, we've realised some of that story and proven that there is a decent business here. It hasn't become a total rocket ship. We're not the next kind of Facebook or Google, but we are a really, really solid business that competitors might be interested in, private equity will probably be interested in. And we, you know, again, when committing to that sale, we will need to sit down and go, who do we want to sell this thing to? Right? You know, if we think that we want to sell this thing to private equity, it's likely that they'll want to keep us in the business, me and you, because we're the operational leaders of this business, or at least for a period of time. If it's a trade buyer, our biggest competitor, they may have figured out a way to integrate our company into theirs, and we might only need to stay for 6 to 12 months. So we will need to get squared away as to what we want to do when thinking about selling this business and what we want to do after selling that business. I like this concept of committing to a sale. You get to the stage that you both, or you all as a leadership team, feel super comfortable that this is the right process And then you start, you know, hitting the tracks and going for it properly.

Okay, so you and I, we've sat down over Christmas over some eggnog and we've decided, look, now's the time. That island's not going to sit there forever before someone snaps it up. So how do we prepare for the sale?

All right. Okay. So this is before— so what I call preparing for a sale is before you do anything that involves reaching out to potential buyers. Right. This is getting your ducks in a row, making sure that you have the right people in place and the right materials in place to run a successful process. And the first thing I'd probably do is appoint an M&A advisor. So this is a £30 million business, a £30 million revenue business, uh, £30 million revenue, £5 million EBITDA. We are going to want to sell this business. Let's say for £150 million, 5 times revenue, that would be nice. You're going to need a significant, you know, a high-quality M&A advisor that has done similar transactions that can guide us through the process. We are experts at running our company. We are not experts at M&A. So going through that process of finding the right partner, the right M&A advisor, is extremely important.

Yeah. With the M&A advisor, how much of it, if you were going to break down like the receipt of their line item of expense, how much of it is their expertise in guiding you through the process and how much of it is allocated to their black book of contacts?

It's really, really interesting and you'll get different perspectives depending on who you listen to. You know, a lot of, a lot of businesses will go, hey, we know all the buyers in the market, so we're going to pay you a lot less because we've got the black book. We know everyone that could buy. I'd say over half, if not kind of 75% plus, of the value that an M&A advisor brings is on the negotiation. I'd say maybe 20% is on the structure and the process, running the process, and then 5% is on actually identifying the buyer. So, you know, you can have, you know, me and you can know the 5 potential buyers intimately, but we would not know where to begin, A, running a process, and then B, structuring a process that means that we are going to get value for money. We're going to get a great valuation. And it's almost worth, you know, M&A advisors, they charge a lot. You know, if it's a smaller transaction, it can be 5 to 10% of the transaction value. If it's a larger transaction, it can go down to, you know, 1, 2, or 3%. They might even want to like a monthly retainer as well whilst they're working on it. But I would almost suggest like if something's too good to be true, it probably, it probably is, right? Like don't go for the cheapest option, go for the best people because they're going to get you an extra, you know, an extra turn on your EBITDA multiple, right? And that's going to make you a few million pounds richer instead of scrabbling over a couple hundred K.

This question might not apply in our case of the business you've described, but say if it was a bigger transaction, how would you manage then having multiple M&A advisors who are representing different counterparties, so different banks, let's say, who are running like you see these book runners on a big deal? How do you get them to all work somewhat collaboratively but competitively so that it has the best outcome?

Yeah, I wouldn't, I mean, yeah, I think you're probably right that you wouldn't get multiple M&A advisors on a deal like this, but a bigger deal, you, you know, you will see, you know, Citibank is the lead advisor and Goldman Sachs is on the ticket as well. Right. What usually happens is there is one bank that is running the M&A process, right. And they will have autonomy, leadership over the M&A process. And other banks that are on that ticket have been given an M&A cred, i.e., a kind of tombstone to use the M&A vernacular. They will probably have a titular role, you know, a title only because they're involved in the bond issuance or because they're involved in the term loan, you know, in lending money to the acquisition. And they'll go, look, you know, we're going to lead the bond issuance, but we also want a cred on the M&A piece. They won't actually be involved in the actual negotiation, but they'll just be there, you know, just as part of a sweetener to the deal.

Okay. And then you did mention something at the top of the show about this idea of an earnout. You were saying it could be a couple of years. So what are we talking about here? How does earnout work?

Yeah. So when I'm preparing for a sale, look, I've got to appoint an M&A advisor, but then what I would like to do as a founding team or as a management or as a leadership team, possibly with the M&A advisor, maybe before, establish an agreed transaction criteria. What are your hard stops? What are the things that you need? What are your minimum requirements? And what do you want to be doing once that transaction has completed? So you might establish, or we might establish together, we're not going to sell this business for less than X. We want Y amount upfront cash. So, you know, if I'm selling the business for £150 million, that's not necessarily going to be £150 million hitting our bank accounts the day the business is sold, right? Firstly, it could be a combination of cash and stock in the acquiring company. So do you want a percentage of your upside to be tied to the performance of the company that buys you? Have to figure that out. And a percentage might also be in what's called an earn-out, which is basically a performance-related hurdle that you as the continued business leader needs to hit in order to get the remainder of your payout. So let's say me and you own the business 50/50 each. The transaction is £150 million and you're set to get £75 million. You might get, you know, again, this would be a great world. You might get £20 million in cash, £30 million in Acquirist stock, and then the remainder in earnouts that you have to stay at the business for 2, 3, 4, 5 years in order to get the rest of the upside. Keeps you locked in, can be a little bit of a nightmare just from an incentive perspective, because you've already got the cash, you've already got a bunch of cash up front. Quite hard to figure out, you know, what happens when you almost achieve an earnout but don't quite. There's a lot of legal things, so it can be quite messy. And that's why when preparing for a sale, I think it's really good to like have a clear idea of what your red lines are, what your gray lines are, and, and what you would accept.

Okay, now something I see, just concluding this, preparing for sale on LinkedIn, is a lot of people circulate the Sequoia kind of pitch deck template, and it's kind of like these golden rules. So I'm assuming we're not at due diligence yet, so do you need a little one-pager to get people excited? Is that what happens next?

Yeah, I think, yeah. So definitely when preparing for a sale, you've appointed your M&A advisor, you've established the agreed transaction criteria that you're, you know, your red flags, your minimum criteria. You probably created a long list of potential buyers alongside the M&A advisor. It could be, you know, could be 100, could be 200. There's probably the gold, the silver, and the bronze. Bronze being, you know, pretty long shot. Would they buy us? Not particularly sure. The gold are the ones that you think probably, you know, they're going to be the most interested. And before you go out for the sale process, you are responsible with your M&A advisor to prepare a teaser. Now this teaser, if we think about it in the world of, you know, maybe, you know, when you're dating someone, the teaser is, is kind of, is your, is your, is your dating profile, right? It is the very, very high level, you know, really quite compelling, quite attractive snippet snapshot that is going to want that person, that potential date to click yes, right? So, you know, you are not, you know, you're not opening the, you're not opening the kimono, you're not giving them detailed financials. You are saying high level, these are the top level things that I want you to know to get really interested about this business. It might be growth rate, it might be revenue growth, it might be gross margins, it might be net recurring revenue, it might be you know, uh, customer splits, geographies, technology, whatever it might be. But it should be one of, you know, under 5 slides, under 5 pages. You know, it's always nice to, to, to get it into 1 or 2 because it's literally just the swipe right or swipe left, right? I am interested. Nothing more needs to happen. So prepare that teaser, make it super compelling. By the way, this is not, you know, we're not, we're not saying, we're not putting anything in that is not true. This is not like selling a dream, right? Because you'll get found out later on in the process. You're selling reality, but you're selling, you know, you're putting a picture of your, you know, of, you're putting your best profile picture on the dating website. You're not putting one when you've just woken up and you're, you're hungover and you're bleary-eyed. Probably the best way of saying it.

Yeah, that's right.

I'm 6'6", 6'2", knocking on 6'3", you know, never rounded up to the nearest foot. Yeah, yeah, quite.

Okay, so we've got this teaser prepared. So what, do we move on to the next stage and this goes out to the world?

Yeah, so the M&A advisor will be responsible for sending that teaser to that long list of maybe 200 names, right? Um, and it might be that, you know, those 200 names, some of them have corporate finance teams that you send to the specific corporate finance teams that are responsible for M&A. You might send it to the CEO or the CFO of that particular business. If, you know, let's say the, you know, let's say 50 of these 200 really, really like the look of this teaser and want to find out more. You invite them to sign what's called a non-disclosure agreement, an NDA, which you've probably have heard of. And then you can start sending them the next stage, right? This is like, you know, maybe going on the first date. You're starting to reveal a little bit more about yourself. You're starting to reveal a little bit more about the business. And that is when you send them what's called the confidential information memorandum. So if the teaser is like a 1 or 2 pages, like your kind of very high-level pitch deck, your confidential information memorandum looks a bit more like a business plan. It's kind of a bit chunkier. It's 30 to 40 pages. It involves more detailed financials, more outlines of operations, divisions, personnel, um, locations, key clients, but probably don't probably redact the names, definitely a kind of client breakdown by percentage and wallet size and things like that. You want to give them a lot, but you still don't want to give them everything, right? You want to give them enough to answer or preempt a lot of their questions, right? You know, what are going to be the questions that a buyer might ask? Let's make sure that we're answering enough of them in the information memorandum so that we don't have to answer the same questions again and again and again. And the goal of Confidential Information Memorandum is to encourage a meeting. Early management face-to-face meetings are probably, you know, in this kind of mid-market space, probably the most important, probably the most important element of this whole process. So the CIM, the Confidential Information Memorandum, needs to kind of convert into a decent number of, all right, I'm willing to fly out and meet you. Let's, let's get this thing, let's go face to face and, and, and talk through this, talk through this business.

So preparing this kind of so-called business plan sounds like a lot of work. And let's say, uh, this business we work for in this hypothetical, we have 100 employees or even less because we're software. Um, and so how— yeah, you said it before, this is this where the M&A advisor, you really have to lean into it. In the hope that— I guess there's lots of value there from preparation, fact-finding, guidance, and they're going to pay for themselves ultimately. Is that the point? Because it feels like we're here, we might get distracted quite easily.

Oh my God, yeah, totally. And, and this is one of the biggest difficulties. This is a full-time job, you know, and anyone you speak to will say that it's a full-time job from a, from a company's perspective. To go through this process, much like fundraising tends to be a full-time job for startups, and you have to try and do it at the edges of your normal working day. Now, an M&A advisor will be so, you know, a good M&A advisor will be so helpful in terms of A, telling you what you need to put in the CIM, and then reviewing it, improving it, tweaking, adjusting, and obviously you know, being the relationship between the interface between the company and the potential buyers. In terms of actually putting together the I&A, you know, that has to be the company because the company knows the business better than the— better and can tell the story better than the M&A advisor. Who is going to attend the early management meetings? Well, it's got to be me and you because that's, you know, that's That's the business, right? Uh, and that's going to be who's, you know, who you're buying the business from. And that's going to be who you're going to be interacting with as you go through the next stage of the negotiations. So the M&A advisor can only do so much. And I think if you try and put too much on the M&A advisor, you know, I think that's probably counterproductive. You can't just go, all right, off you go, sell me the business. You know, it just doesn't work in a mid-market. It doesn't work in any context, but especially a mid-market, relationship-driven, quite intimate context.

Would someone be giving us training on how to manage those management meetings then? So this is almost like a little bit of flirting without showing too much, but getting the information we need and to get comfortable. So how does that work?

Yeah, I mean, and that's, that's the role of the M&A advisor. They will brief and support you through those meetings. And it is, it's a two-way street, right? You're not. If you, if you are just set up to answer questions, it's a little bit like the interview guidance that we give, you know, you, you should ask a few questions as well, right? It needs to be the right fit. So yes, you need to be prepared to answer some quite in-depth questions about your business. You also need to be prepared to say, look, I'm not going to give you that yet. This comes in due diligence, right? There's another stage, another door that you can open if you get through to the next stage. But you also need to be prepared to ask a lot of questions to them as well. Like, you know, like, tell me a little bit more about— you might have already asked these beforehand, but, you know, tell me more about your business. Tell me how you run. Tell me how decentralised the acquisitions that you've had in your business look, you know, are, you know, can I speak to any CEOs of acquired companies, of businesses that you've acquired? You know, what's your culture like? You know, are you, are you more focused on debt or equity when it comes to acquiring the business? You don't want to get into specific deal terms in, in these meetings, but you certainly want to, again, continue that flirtation and definitely have a level of comfort when you come out of that meeting where you're like, okay, right, I could go to the next stage with this person. Yeah, I'm pretty, I'm feeling pretty, pretty happy.

All right, well, look, the next stage, fourth stage, is the one I'd probably be the worst at. So this is where, as co-founders, I'd step aside. And I'll leave you to crack on. So tell me about the negotiation period.

All right. So one of the, one of the best bits of advice I ever heard, uh, with regards to corporate finance is, you know, when you're in startup phase, it is so useful and so necessary to be passionate and to get, you know, and to sell the dream, drink the Kool-Aid, get, you know, get your team fired up and we're going to, you know, we're going to shoot, shoot for the moon and go for it. When it comes to corporate finance and things like M&A negotiations, the key is to be as dispassionate as possible, right? You need to take yourself and, you know, the fact that you've founded this company, you need to take that out, out of the picture and look at this business and look at this negotiation for what it is, right? It's, you know, is this, is this going to work for both sides? What does the buyer want in terms of, their incentives, their desires, you know, how can we play on those different things? And also, what leverage do we have? You know, negotiations, as we all know, are all about leverage. So we need to be prepared, and it's good that we're a profitable business, $5 million of EBITDA, we're not going to run out of money. We need to be prepared to walk away and say, look, you know, you're not hitting our valuation floors. You're not hitting our deal structure. You know, thank you. It's been a really engaging process, but I, you know, I don't think that we should take this forward. That is really important. In order to do that, it's really, really good to have multiple options on the table. So just to walk you through very quickly the process, once you've given a certain amount of time for, uh, for potential buyers to digest the confidential information memorandum and meet with the management team and start to get a level of comfort, they will be invited to submit LOIs. So, letters of intent. This is like a non-binding, kind of like a term sheet saying, look, the— this is the deal structure that I propose, subject to due diligence. And it's almost like a— so it's not necessarily like a gentleman's agreement, but it is non-binding, right? So you have to take them at their word that if the due diligence process goes well, then that is going to be roughly the shape of the deal. And obviously, if their letter of intent is way below what you're expecting, you don't have to invite them to due diligence, right? You can just say, look, nope, not happy with that. If they're really close, maybe there's a little bit of back and forth to get that LOI to the level that you want it. And as soon as you've got A, a potential buyer that's hit your required criteria as a seller, it's hit your required criteria. You can then invite them to the due diligence phase. Now this due diligence phase, and we'll talk about this in the next stage, this due diligence phase, it might be exclusive. So we might have found a potential buyer who says, look, I'm up for doing due diligence. I'm up for issuing this letter of intent. 'But I need to have 30 days or 60 days of exclusivity.' So you can't have another player, another buyer creating that competitive tension. So you really need, if there's exclusivity, you really need to back that the LOI is good, that they are good for it. You know, they've got the financial firepower to actually see this through. You know, they've done acquisitions before, you know, all of this kind of stuff. Before you say, yep, let's go through to due diligence, which is, which is obviously the final stage.

So, so what is in your mind the art of the deal when it comes to negotiations?

Uh, not to be too Donald Trump about this, uh, and, and I'm going to give an answer that is exactly the opposite to what Donald Trump's going to say. So I think, I think it's probably trust and honesty, right? Like Again, you're not— at some point, if you are dishonest, if you are selling a dream, if you're selling a fiction, you are going to get found out. And even if it's after the close and you have, you know, puffed up your financials and you think that you've got away with it and you've got, you know, they, there is still recourse to come back and square that deal away. There's legal routes and things like that. I would be so, you know, The goal is to be open, honest, humble, and say, look, you know, don't give the 100x story, give the, all right, this is a really exciting growth opportunity. We've seen it work in different markets, you know, and we think that we can probably do the same, but we're going to need to execute properly, obviously.

Would you change that answer if it was cross-border? And let's say we're dealing with Americans or we're dealing with the Middle East, would you alter the tactic or is it fundamentally the same?

I think it's, again, I don't know necessarily the region by region approach to negotiation, but I do think that in certainly in a, in a US context, this should be the same. And you want partners and you've got your reputation. The last thing you want to do is, is try and pull a fast one. And bearing in mind that these negotiations leading up to the letter of intent, there's still a due diligence process to go through afterwards. So if you are fluffing up your numbers and, you know, and you managed to get a slightly higher EBITDA multiple on the transaction, on the transaction value, that might come right back down once due diligence has been complete and suddenly your reputation is being compromised. As soon as that happens, the buyer's going to start asking more and more and more and more questions. You know, so, and you're a little bit sneaky on those numbers. I don't trust these numbers anymore. That's when trust comes, that breaks down. And you know, more than half of transactions fail. At a due diligence level. So you're not, you're not done when you reach stage 4 negotiations. You're only done when you reach the end of stage 5 due diligence.

Okay. And talking of stage 5 then, this due diligence and close. So what sort of timeframe are we talking about? You mentioned there a bit of a moving goalpost. Is that just dependent on how complex the deal is?

Yeah. And look, I think It's the role of an M&A advisor is to manage these timeframes appropriately. The last thing you want to do across all of these different levels, creating a competitive process, negotiations, and due diligence, is give the buyer the opportunity to take as much time as they want. Quite often, if a buyer's taking too much time, if they're asking for too many meetings, if they're continuing to span this process out, probably means that they're a little bit concerned and they're not that up for doing the deal. If someone's up for doing the deal, they're up for moving fast, right? You give them a little bit of leeway. But when it comes to something like due diligence, we're a $30 million revenue company, $5 million EBITDA. Let's say we've got 3 or 4 products sold to 4 or 5 different regions, but it's a software business. You wouldn't want this taking more than 60 days maximum. You've already given them quite a lot of information, right? They're gonna get under the hood now and look at— well, they're gonna get access to the data room, which is a series of documents, series of folders that have lots of key documents relating to accounts, legal contracts, equipment leases, tax, bank account, payrolls, all of that kind of nitty-gritty stuff. Due diligence is a means to reassure the buyer that what was said in the confidential information memorandum is— holds true, right? And there's no nasties under the table. Now, with a software business like this, you might want to get some specialist due diligence done. So maybe you'll get a technology due diligence provider to look at the code base of this business and make sure that there's nothing untoward there. The most important thing about the due diligence is you're not going to be able to, you're not going to be able to eliminate every single risk from a potential transaction, right? All transactions come with risks. What you want to establish first and foremost is, are the sellers being honest with me? And are the numbers that they're purporting, are they, do they stand the test of due diligence, and is there anything during this due diligence process that would make me walk away from this deal, right? So if you can get comfortable with those two things, then you need to start thinking about the more technical elements of the deal. So these are things like, um, representation, representations and warranties. These things that are written into the purchase agreement that basically say, me and Ant, we represent as founders and directors of this company, we represent to the best of our knowledge. You can always put in a nice knowledge clause. Everything that we have put in our due diligence packs is factually accurate. And we warrant that anything that we are going to do between now and the close is going to be according to the principles of this purchase agreement. That provides the final kind of blanket coverage to get a buyer reassured that if the deal is closed and they suddenly realise a massive, massive piece of fraud that's gone on, they can go after me and you, right? Because we have represented as directors that there's nothing nasty within the business.

Okay. So start to finish then. So that last stage was like 30 to 60 days. So from the point of where we've had our conversation this Christmas and gone, yes, to the point of it's— it— the detailed documents there, the blanket legal agreement is done, what would be quick and what would be long?

Yeah, so I mean, quick would be anything under 6 months. 3 to 6 months is, is punchy, and that would probably mean that in, in order to do something under 6 months, you would need to have a really, really clear list of buyers. You would've needed to prepare the due diligence materials upfront. Confidential Information Memorandum needs to be on point. The process needs to be super tight. There needs to be a real excitement around the company. That means that there's gonna be a lot of potential buyers, right? And I would imagine that a, you know, a top-tier AI lab could be sold in a couple of weeks, right? Because of the hype surrounding it. Now, the normal process, you're thinking 6 to 12 months start to close. So, when you push that button to say, we are for sale, to we've sold, 6 to 12 months. But it might be that you get really close with one buyer and that takes 6 months and it doesn't work out. You lick your wounds for a couple of months and then go again and it takes another 9 months and that time it does work out. So sometimes, you know, it can end up being a lot longer than just the kind of sweet 6 to 12 months. And obviously, as I said at the start of this, you know, every deal is different and there might be tricky bits that are unforeseen or, you know, ownership structures that take a long time to unwind or tax implications for multi-jurisdiction asset bases and all this kind of stuff that prolongs the close.

My final question is on the banker's side. Would that banker who's been advising us on this deal have been running multiple deals, or does it kind of absorb and they do project by project? How does that work?

Yeah, so if you think about an investment bank structure, let's say you, you know, you are working with an investment bank's mid-market team and you're working with a managing director who's originated this deal. Now that managing director might have 4 or 5 deals on the go at various different stages, but underneath them they have 6 or 7 people that are performing different stages within those 4 or 5 deals. So again, quite frankly, when you engage an M&A advisor, you would kind of expect them to be working for you full-time, but it might be that that full-time means 30% of an analyst job, 40% associate, 20% legal, if you get legal representation in there as well. And then the MD comes in for the big negotiation piece, the 10% at the end.

Is there anything like with law? I know with law sometimes it has that same structure of fees, and that sometimes can be like a, uh, a kind of intent shown by the level of solicitor firm that you might use. If you use a certain banker, does it really set the precedence that you're more serious, or there's going to be— or is it not really? Yeah, that doesn't transfer that way.

It definitely does. I, you know, again, it's one of these things that because these are very, very, you know, this is going to be life-changing amounts of money for me and you, and you want the best person that not only gets us the best valuation, but also protects us from the things that we don't want, right? And can cover every single base that we wouldn't have even thought of, you know, with regards to the purchase agreement, the reps and the warranties and things like that. I would always pay more rather than less. And I think, you know, we can, and this is the same criticism levelled with solicitors. You think, okay, all right, I'm being charged 800 quid an hour for a senior solicitor's or a partner's time, but they're outsourcing all of this stuff to the juniors. This is a bit of a screw job. But, you know, an M&A advisor, like someone that's been in the industry and seen hundreds of transactions. You're not paying for 10 hours of their time, you're paying for 30 years of their experience. And one conversation can be worth a few million quid to me and you, right? So you've just got to think about outcomes as opposed to the kind of pay-per-hour, swinging way that we might think about things.

Okay, good stuff. That was a great breakdown, but I'm sure there's going to be lots of questions, and this isn't meant to be a pop at you, Stephen. Questions are good because you sparked a curious— a curiosity in people's mind that they want to ask more questions. So if that is you and listening, you're thinking, what about this, what about that, something wasn't particularly clear, then just let us know with a comment on the Spotify platform, which I know we reply to everyone and everything. So thanks very much, Stephen, great to have you back on, and yeah, look forward to the next conversation.

Yeah, thank you, Ant.