When a Founder Brings You an Unsolicited Offer: The Advisor's First Move
A founder called me on a Tuesday to say a strategic buyer had offered him nineteen million dollars for his business, unsolicited, and he had until Friday to respond. He was not asking whether to take it. He had already decided it was a good number, and he wanted help papering the deal quickly before the buyer changed their mind. The first thing I told him was that Friday was not a real deadline, and the second thing I told him was that we did not yet know whether nineteen million was a good number or a great one, because a single offer is not a market. It is one buyer's opening position, delivered on the buyer's terms, at the buyer's chosen moment. He sold four months later, to a different buyer, for a number that started with a two.
The unsolicited offer is one of the most common ways an advisor gets pulled into an engagement, and it is also where an advisor earns their fee most clearly or fails to. The founder arrives already anchored. Someone has named a number, and that number has become the founder's reference point for what the business is worth. The advisor's first job is not to negotiate the offer. It is to decide, with the founder, whether to run a real process against it, and to do that clearly before the founder gets swept into a bilateral negotiation they cannot win.
Start with why the offer exists at all. An unsolicited approach is almost never a favor. A sophisticated buyer who reaches out directly is trying to buy a company before it hits the market, precisely because a company that never hits the market never draws a competing bid. They are not offering to save the founder the trouble of a process. They are offering to skip the process, because the process is the thing that would cost them money. That does not make the buyer a villain and it does not make the offer bad. It means the offer should be read as the buyer's floor, not the founder's ceiling, and the advisor has to say that plainly while the founder is still flattered by the attention.
The second thing to establish is that the deadline is manufactured. The Friday, the exploding offer, the this-price-only-holds-if-we-move-now, these are pressure devices, and they work because the founder does not know they are common. A legitimate buyer who genuinely wants the business will still want it in three weeks. An advisor should be comfortable telling a founder that a pressure deadline is information about the buyer's strategy, not about the deal's real timeline. The founders who lose the most value are the ones who let an artificial clock compress the one window in which they had leverage.
Then comes the real decision, which is whether to run a process. The unsolicited offer creates a genuine strategic fork, and the advisor's value is in framing it honestly rather than defaulting to the answer that maximizes their fee. On one side, a limited or full auction discovers what the market will actually pay, and the discipline of competition tends to lift both price and terms. On the other side, a process takes months, it risks the confidentiality the founder may care about, and there are cases where the unsolicited buyer is genuinely the best owner and a full auction would only annoy them without producing a better result. The advisor's job is to lay out that trade honestly, including the cases where the founder should just negotiate hard with the one buyer rather than run a full process, and to make the call on the merits of this specific situation rather than reflexively.
Even when a full auction is wrong, the answer is almost never to simply accept the offer as written. The middle path is the quiet market check: the advisor discreetly approaches a small handful of the most logical alternative buyers to establish whether the unsolicited number is competitive at all. This does two things. It gives the founder a real reference point instead of a single buyer's assertion, and it changes the founder's posture in the negotiation, because a founder who knows what two other buyers would pay negotiates differently than a founder who knows only what one buyer offered. Choosing which buyers to approach is its own discipline, and it is the same judgment I described in why most sellers pick the wrong buyer before diligence starts.
There is a preservation-of-leverage point that advisors have to enforce early, because founders give it away without noticing. The unsolicited buyer will often push, near the start, for a signed letter of intent with an exclusivity or no-shop provision. The moment the founder signs that, the process is over whether they ran one or not, because exclusivity legally bars the founder from talking to anyone else for the exclusivity period, which is exactly when a competing bid would have to come from. Signing a no-shop with the only buyer at the table, before establishing any competitive reference, is the single most common way founders forfeit their leverage in an unsolicited situation. The advisor's job is to make sure the founder does not sign away the market before anyone has checked what the market would pay.
Underneath all of this is a readiness problem the offer exposes. An unsolicited approach almost always arrives before the founder has done any of the preparation that a deliberate sale would involve. The books have not been scrubbed, the add-back schedule does not exist, the customer concentration and the working capital position have not been examined through a buyer's eyes. A founder who negotiates hard and then stumbles in diligence gives the price right back, because an unprepared company invites exactly the post-letter re-trading that erodes the number. That is why the advisor's early work on an unsolicited deal looks a lot like the early work on any deal, and it is why I keep returning to the argument in the three patterns that predict whether a deal closes at the LOI price. The offer does not exempt the founder from readiness. It just removes the time they would normally have had to build it.
There is also an engagement-terms conversation to have with the founder before anything else, because the unsolicited offer changes the fee discussion. A founder who arrives with a nineteen million dollar offer already in hand will reasonably ask why they should pay a full success fee on value that was, in some sense, already on the table. That is a fair question and it deserves a real answer, often some form of threshold or tiered fee that rewards the advisor for the value created above the unsolicited number rather than on the whole amount. Getting that clear at the start protects the relationship, and it is part of the same discipline I described in the question a seller should ask before signing any engagement letter.
The founder who was given until Friday did not sell to the buyer who approached him. Once we quietly checked the market, two other strategic acquirers emerged who valued the same synergies more highly, and the original buyer, who had counted on being alone, ultimately did not win. The lesson I take from that deal, and from the many like it, is that the advisor's first move on an unsolicited offer is almost never to engage with the offer on its own terms. It is to slow the clock, establish a real market reference, and protect the founder's leverage until the founder can see clearly what they actually have. A single buyer is not a market, and the advisor exists to make sure the founder never mistakes one for the other. That is the work we do before the founder signs anything at Cordis Group.