When a Letter of Intent (LOI) is signed, many business owners feel like the hardest part of the process is behind them. In reality, the LOI is not the finish line it’s the starting line for the most detailed and important phase of a transaction.
The first 90 days after signing an LOI are when deals are validated, refined, and ultimately brought to closing. It is also the period where transactions can quietly lose momentum if expectations are unclear or preparation is lacking.
Understanding what happens during this stage helps reduce stress, avoid surprises, and keep the deal moving forward with confidence.
What Is an LOI and What Does It Really Mean?
A Letter of Intent outlines the major business terms agreed upon by buyer and seller. It typically includes:
• Purchase price (or valuation range)
• Deal structure
• Expected timeline
• Exclusivity period
• Key conditions required for closing
Signing an LOI signals mutual commitment to move forward but it is not the final agreement. The buyer still must verify the business through due diligence before closing.
A helpful analogy: the LOI is the engagement ring. Both sides have agreed to move forward together, but there is still meaningful planning and preparation before the wedding day.
The Three Phases of the First 90 Days
While every transaction has unique elements, most follow a similar progression.
Phase 1: Information & Data Gathering (Days 1–30)
This is typically the most document-intensive period of the process.
Buyers will request detailed information, including:
• Financial statements and tax returns
• Customer and revenue data
• Vendor and supplier agreements
• Employee information
• Insurance policies
• Legal contracts
• Operational procedures
Most of this information is shared through a secure virtual data room.
What to Expect
A high volume of questions followed by clarification questions and then additional follow-ups.
This is normal. Buyers are not looking for problems; they are working to reduce uncertainty and confirm assumptions made during earlier discussions.
How Sellers Succeed in This Phase
• Respond promptly
• Stay organized
• Be transparent
Delayed or incomplete responses can unintentionally introduce doubt into the process.
Phase 2: Deep Due Diligence & Validation (Days 30–60)
During this stage, buyers move beyond collecting information and begin analyzing the business more deeply.
Common areas of focus include:
• Revenue quality and consistency
• Customer concentration
• Profitability trends
• Operational risks
• Key employee retention
• Equipment and asset condition
• Legal and compliance exposure
Depending on prior agreements, buyers may also begin conversations with key managers or team members.
What to Expect
• More detailed analytical questions
• Requests for explanations and reconciliations
• Additional supporting documentation requests
Small issues can feel amplified during this phase not because they are deal breakers, but because buyers are testing assumptions.
How Sellers Succeed
• Stay calm
• Stay consistent
• Stay honest
No business is perfect. Experienced buyers understand this. What matters most is clarity, credibility, and how issues are addressed.
Phase 3: Final Negotiation & Closing Preparation (Days 60–90)
- Drafting and negotiating the purchase agreement
- Employment or transition arrangements
- Final financing approvals
- Transition and integration planning
- Closing coordination
- Increased legal documentation
- Frequent advisor calls
- Important decision points
- Lean on experienced advisors
- Focus on long-term outcomes rather than small adjustments
- Avoid reacting emotionally to routine negotiations
Common Surprises During Due Diligence
Even well-prepared companies encounter unexpected developments. Common examples include:
Timing Delays
Lender approvals and document reviews often take longer than anticipated.
Repeated Questions
Buyers may ask similar questions multiple ways to confirm consistency.
Additional Data Requests
A normal part of validating assumptions not necessarily a red flag.
Structural Adjustments
Minor refinements to deal structure sometimes occur as more information becomes available.
The Seller’s Role During This Period
- Continue running the business effectively
- Respond promptly to information requests
- Support your advisory team
- Maintain operational performance
- Poor communication
- Slow responsiveness
- Unexpected financial inconsistencies
- Late discovery of legal or operational issues
- Seller fatigue or distraction
How to Make Due Diligence Easier
- Clean, well-organized financials
- Centralized documentation
- Clearly defined contracts
- A capable leadership team
- Documented processes and reporting
Final Thoughts
The first 90 days after an LOI can feel intense, but this period is where successful transactions are truly built. It is a process focused on confirmation, clarity, and trust between buyer and seller.
Business owners who understand what to expect are typically less stressed, more confident, and better positioned for a successful outcome.
Signing the LOI is a significant milestone. Finishing strong during the diligence phase is what ultimately transforms intent into a closed transaction and the successful next chapter you have worked hard to achieve.
Greg’s Take: The LOI Isn’t the End – It’s Where Execution Begins
One of the most common misconceptions I see from business owners is believing the deal is essentially done once the LOI is signed. In reality, the LOI simply gives both sides permission to start verifying everything that has been discussed up to that point
The next 90 days are less about negotiation and more about confidence building.
Buyers are asking one core question: “Does the business perform the way we believe it does?”
Sellers should be asking a different one: “Are we prepared to demonstrate that clearly and consistently?”
The deals that close smoothly are rarely the ones with perfect businesses. They’re the ones where owners stay engaged, keep running the company well, and rely on their advisory team to manage the process and communication.
My biggest advice to sellers during this period:
- Don’t take diligence personally, questions are part of the process.
- Keep your focus on running the business, not reacting to every request.
- Maintain momentum. Deals lose energy faster than they lose logic.
If performance stays strong and communication stays clear, diligence becomes confirmation not confrontation.
— Greg DeSimone
President, Catapult Advisory Group
