What buyers look for when buying a business, and how brokers can prepare clients

What do buyers look for when buying a business?

Buyers look for earnings they can trust, customers who will stay, a team that runs the company without the seller, processes that are written down, and records that prove all of it. Strategic buyers add fit and synergy; private equity buyers add a growth plan. The common thread is evidence: whatever the seller claims, the buyer will ask to see it.

For a broker preparing a client with 50+ full-time employees, there is a useful overlap. The same clean, connected, well-organized records that satisfy diligence are also what make a company's data licensable. Preparing for one prepares you for the other.

Which criteria drive valuation?

Bain's 2026 global private equity report notes that general partners are holding assets longer to buy time to grow EBITDA, with almost 40% of portfolio companies held more than five years. A sponsor that has to grow earnings wants a business with room to improve, and will probe operating detail accordingly.

How do buyer criteria overlap with licensable records?

The overlap is partial. Buyers care about confidentiality and customer rights too, and so do licensing buyers, which is why the rights review matters. See who qualifies for the baseline: 50+ full-time employees at peak (contractors excluded), several years of documented operations, rights to license the data and an authorized sponsor.

What does a seller-readiness checklist look like?

• Three or more years of financials reconciled to tax returns
• A customer list with revenue, tenure and contract terms
• An org chart with named backups for critical roles
• Core processes written down, as in documenting SOPs before a sale
• A systems list showing what each tool holds and how far back it goes
• A plan for each legacy system: keep, export or retire
• A note on which contracts restrict sharing or licensing records
• An owner willing to discuss structure, including any licensing

Companies that cannot pass the first four may need work before going to market. Selling an unprofitable company with a large team covers a different readiness problem, and how much an owner needs to retire frames the price expectation conversation.

How can a broker add the licensing conversation?

Raise it once the listing agreement is signed and you are building the systems inventory for the information memorandum. At that point you are already asking where the history lives.

1. Ask each client for the systems list during onboarding, including archived platforms.
2. Screen against the baseline with the company fit checker, a preliminary and non-binding tool.
3. Ask permission to introduce the owner to SourceX, which handles qualification, a data inventory, pricing and terms, buyer review, delivery and payment. You introduce; you never export, upload or describe confidential records.
4. Coordinate with deal counsel so any license fits the sale process, not complicates it.

Manufacturing clients need a different angle; see manufacturing succession planning and office records.

What should brokers know about their own regulatory position?

Brokers should treat the licensing referral as separate from their M&A work. Congress created a statutory M&A broker exemption in the 2023 appropriations law (Exchange Act section 15(b)(13)); law-firm summaries describe it as covering brokers who effect securities transactions solely in connection with the transfer of ownership of an eligible privately held company, with conditions, and as not preempting state registration requirements. A data-licensing introduction is not a transfer of ownership, so nothing here suggests the exemption covers it. This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting, including your state's licensing rules.

How are rewards handled?

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. The reward becomes payable only after the buyer pays and SourceX receives its fee; a lead, meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. The reward is a share of SourceX's fee and is never deducted from what the company receives. Read the program terms and see referral opportunities for business brokers. If a listing collapses, what to do when a sale falls through explains how to regroup.

When is it not worth raising?

Skip it when the headcount never reached 50+ full-time employees at peak, when most of the records belong to the company's own clients or are mainly consumer personal data, or when the archives are gone and nobody can export what is left. Also skip it if the owner has said an exclusive license is off the table; the conversation will only distract from the sale.

How should you use this in a buyer conversation?

When a client is preparing for diligence, add one practical question to the readiness review: which systems would a buyer expect to see, and are the records behind them clean and exportable? A tidy, well-labeled archive is easier to present to a buyer and is also what data licensing requires.

Do not promise that licensing raises a sale price or that a buyer will care. Treat it as a separate, optional conversation the owner can have with the company's own advisors, and keep it apart from the sale process so neither distracts from the other.

Next step

Add one line, "where does your history live?", to your next client intake. If a client fits, register as a partner and make the introduction, or send the owner to sourcex.si/apply with your referral link.