Once a letter of intent is signed, a founder often has no clear picture of what happens next.
They know a deal was, in some sense, agreed, and they know it is not done. In between is a stretch of two to four months that feels, from the inside, like a fog: diligence requests, legal documents, lawyers talking to lawyers, and a slow drift toward a finish line that never seems to arrive. That fog is where deals lose momentum, and where sellers make avoidable mistakes, mostly because they cannot see the shape of what they are in.
But the final stretch is not a void. It is a defined sequence, and knowing the map is most of what keeps a seller calm and a deal on track.
It runs, roughly, in five phases.
The first is confirmatory diligence. Having agreed a price on the strength of the information memorandum and early conversations, the buyer now verifies it. Their accountants, lawyers and sometimes technical specialists go through the business in detail, testing whether what you told them holds up. If you did the work early, ran diligence on yourself, built a clean data room, this phase is fast and uneventful, which is exactly what you want. Speed here is not just convenience; it protects the price. It is also where the retrade lives: a buyer who finds, or claims to find, something new will use it to revisit the number. The defence is preparation, disclosed up front, so there is nothing left to discover.
The second phase is the definitive agreement, and it is where the real terms are decided.
The LOI sketched a price and a shape. The purchase agreement makes it binding, in detail, and a great deal of value moves in the drafting. This is the home of the reps and warranties, the promises you make about the business that you are liable for if they prove untrue; the indemnities, which say who bears the cost if something goes wrong; the escrow or holdback, a slice of the price parked to cover those risks; and the disclosure schedules, where you list the exceptions to your own warranties. Lawyers do the drafting, but a seller who does not understand what is being traded here can give away far more than they ever negotiated on price. A tighter warranty, a smaller holdback, a shorter indemnity period: each is worth real money, and each is settled in this phase.
The third phase is the conditions to close.
Most deals cannot complete the moment the agreement is signed. There are conditions to satisfy first, and they are the single most common cause of delay. Key customer or supplier contracts may have change-of-control clauses that need consent. A landlord may need to approve the transfer of a lease. A regulator may need to clear it. The buyer's financing has to be confirmed and drawn. None of this is glamorous, and all of it takes longer than anyone expects, which is why the sellers who close on time are the ones who started these conversations early, in parallel with the legal drafting, rather than waiting for the agreement to be signed.
The fourth phase is signing and completion, and it is worth knowing they are not always the same moment.
Sometimes a deal signs and completes at once. Often there is a gap: the agreement is signed, the conditions are then satisfied over days or weeks, and completion, the actual transfer of the business and the flow of funds, follows. Until completion, and until the money is in your account, the deal is not done. Signing feels like the finish. It is not. The finish is funds received.
The fifth phase begins the moment the deal closes: the handover. If you took all cash and walked, your involvement may end quickly. But if there is an earnout, or you rolled equity into the buyer's business, the deal is not really over; you now have a stake in how the next chapter goes, and the transition you run in the first weeks shapes whether an earnout pays. Planning that handover before close, not after, is the difference between an earnout you hit and one you watch slip away.
Across all five phases, the same disciplines apply, and they are the ones a good adviser exists to enforce. Keep the momentum; every week of drift is a week for something to break. Treat the process as a project, with someone whose job is to chase consents, answer diligence, and keep the lawyers moving.
Keep running the business, because a wobble now is a gift to a buyer. And manage the emotion, because the final stretch is where nerves fray and good deals die of exhaustion rather than any real problem.The reason so many sellers find this stage bewildering is that no one drew them the map. Drawn out, it is far less frightening: five phases, each with a job to do, each with a known set of risks, and a clear definition of the only moment that counts, which is money in the account.
If you are heading into the stretch between a signed LOI and a close, or want to understand it before you get there, that is the part of a sale where an adviser most earns their keep, and it is work we do with owners every week. The first conversation is free and confidential.