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You will also need a lawyer, a specialist tax accountant, personal accountant, etc.

Right now you are at the non-binding offer stage. This is when you shape the deal and negotiate the overall price. Your aim is to not only maximise the sale price but also manage risk by maximising up front cash and minimising proceeds which are dependent on future performance (earn-out). Others have commented on this stage. My advice is to create a formal process - step back and spend a couple of months creating an 'information memorandum' and get it to a bunch of prospective buyers. The only way to get the best deal is to get multiple offers.

Now here is the most important thing I have to say. Negotiating the deal is the easy bit. I repeat - the easy bit. You have to do due diligence and negotiate the long-form contracts. If you get this wrong, the deal rapidly become much less attractive. This is where both your sale consultant and lawyer are critical, but you'll have plenty of work to do too!

Start thinking about due diligence right now. Will your business stand microscopic scrutiny? Do you meet all accounting standards, relevant business regulations, etc. The better the deal you negotiate, the harder you'll be pressed in due diligence. And remember you need to be 100% truthful because the contracts will contain clauses that you won't want invoked if you provide any incorrect information.

The only really important advice you should take from an online forum is to hire great consultants now. Only deal with genuine experts who have real experience with similar transactions. Be prepared to pay high fees, the right people will be worth it!

Creating an impression that "the first offer is the final offer" can safely be assumed to be negotiation tactics. This is what they are paid for; the people you're talking to do this sort of negotiation all the time. You are fencing with someone that has practiced this for years, and they have much less to lose than you. Do not assume malice, just assume that their job is to get a good deal for their employer.

Be frank: Tell them what you think the value of the company actually is. An M&A deal is like getting married: If you don't feel that it's the happiest day of your life when you sign your company over, you probably shouldn't do it. A little bit of cold feet is to be expected, but generally you should -not- enter a deal where you have a bitter taste in your mouth. That would do neither you (nor the potential buyer) any good.

Get yourself advisors (experienced ones, preferably); but be careful: Keep their incentive structure in mind. Some have a lot less to lose than you (e.g. if the deal breaks apart, they lose a couple of hours of work), but can often gain much more from risk-taking (as they usually want a percentage of the proceeds).

Your impression that a lot of advisors seem like they have something to sell to you is correct, because they do. Finding one that you deem trustworthy is important; personal connections are usually more helpful than shopping around.

It is not unheard of to not get the LOI before the basic terms are agreed upon. The buyer wants to avoid giving you something in writing that you could use to shop around.

Good luck !

- Counteroffer. Seriously. - If you're profitable and can keep on going, make this -very- transparent to the people approaching you. - "No deal is better than a bad deal" is very true. Make sure the deal makes you happy. - Having an experienced negotiator along is going to make this a lot less nerve-wrecking. Try finding one, somehow.

1) If they are genuine bidders, then there will be room for negotiation. How much of course depends on a) how much they want to buy and b) how much you are prepared to sell for. Anyway, if they are genuine buyers they will be prepared to negotiate. If they are not, or you can not agree on a deal, then you haven't lost anything (except perhaps some lawyer fees) so don't stress.

2) You should negotiate both the price, the cash/stock mix and the terms. This latter is by far and away the most complex, and YOU MUST GET A GOOD LAWYER TO ADVISE. The devil is in the details, and as you mention, you must make sure they can't do something like arbitarily fire you and take away your stock.

3) Figure out where you are prepared to sell for. Pitch this to them. Don't be a pussy about this. After the back and forth, if you can agree on broad terms great.

4) They will probably want to draw up the contracts. Of course this means the deal will be weighted in their favour, hence YOU MUST HAVE A LAWTER TO ADVISE - and be prepared to haggle on the various clauses.

5) I would say vested stock is pretty common. But you must make sure you are protected against dilution. And you must check the details concerning the circumstances under which they can take your stock. E.g losing your stock for anything other than gross negligence is a no no.

Good luck!