LOI to accept price and terms.
Due diligence is open book time where buyer investigates the business to see if it is how the seller represented it.
SMB due diligence:
Standard asset purchase agreement is provided by M&A professional and contingencies for due diligence placed in the contract.
A buyer agrees to purchase the company provided the conditions are met. Due diligence items are checked off in writing as they are dealt with and a binding contract is remaining so you are ready to close.
Ex. The “book check” is done by the buyer or CPA
You can use Dropbox or Google Docs
LMM and MM Due Diligence:
Begins with IOI or non-binding LOI. The definitive purchase agreement is not created until after due diligence.
Use V-rooms or Firmex
Usually takes 60-90 days
The definitive purchase agreement is written to address issues discovered in due diligence, otherwise is boilerplate.