Why do unsolicited inquiry from an investor for owner-managed company the weakest negotiating position is.
The call comes unexpectedly, and it’s flattering. An investor—or a consultant acting on the investor’s behalf—has his eye on the company, finds it noteworthy, and would like to have a noncommittal conversation. For an entrepreneur who’s already been mulling over the idea of a sale, this is a welcome opportunity. After two conversations, they’ve gotten to know each other, the chemistry is right, and a figure is on the table. What’s easily overlooked here is the starting point. The entrepreneur is negotiating without a benchmark, without an alternative, and with a counterpart who knows exactly that. The prospective buyer has chosen the timing, prepared the pitch, and, as a rule, has already looked at several comparable companies. The seller, on the other hand, is conducting this negotiation for the first and only time in his life.
Added to this is a market reality that many entrepreneurs underestimate. The DIHK report on business succession reports that, for the year in question, approximately 9,600 companies sought advice from the Chambers of Industry and Commerce regarding a sale, but there were only just over 4,000 potential buyers. For 5 ,620 companies, no candidate was found at all, and this gap has nearly doubled since 2019. Anyone who relies on just one caller in such an environment is, ironically, relying on the scarce side of the market. The buyer who calls first is therefore rarely the best—but initially just the fastest. Whether there are other acquirers who are a better strategic fit, can generate more synergies, or would simply be willing to pay more remains unanswered in a bilateral discussion. Experience shows that the seller doesn’t ask this question until after the closing, by which time it can no longer be answered.
A structured process changes one thing above all else. It provides the seller with an alternative. As soon as several strong candidates from among strategists and financial investors begin evaluating the deal in parallel, the dynamics of the negotiations shift. The timeline is set by the seller, not the prospective buyer; information is released in a staggered and controlled manner; and the entrepreneur can, through his or her advisor, reserve the right to make a decision rather than having to answer every question immediately at the table. Above all, however, renegotiations come to nothing as long as a genuine alternative remains on the table. The fact that competition ultimately has an impact is also demonstrated by the M&A Market Report by Oaklins Germany for the first half of 2026. According to the report, despite generally more selective investor behavior, there remains intense competition for target companies with compelling profiles, resulting in correspondingly high valuation levels. However, above-average purchase prices are paid only for resilient and easily predictable business models. Competition does not affect only the price; it also improves the terms of the agreement—from the amount of purchase price holdbacks and warranties to the question of how long the seller remains bound after closing.
We at Albia Capital therefore do not advise anyone to turn down an unsolicited inquiry. We recommend not misinterpreting it as a sales process. Genuine interest is a good opportunity to clarify your own position and assess whether the timing is right. However, it does not replace the preparing the company nor the targeted outreach to other suitable acquirers both domestically and abroad.
As consultants who have held entrepreneurial responsibilities ourselves, we understand both sides of this decision. Please feel free to contact us at any time—with no obligation and, of course, in complete confidence— contact usif you’d like to discuss this in more detail.
