New buyer question: NDA required before details — any red flags?

March 02, 2026

by a searcher from Kennesaw State University in Portland, OR, USA

Hi everyone — quick question from a first-time buyer. I’m having my first interaction with a broker on a potential acquisition. They’re asking me to sign an NDA before sharing the CIM/financials. Is that standard practice? Also, at what stage do you typically see NDAs vs LOIs? In other words, is it normal to sign an NDA well before submitting an LOI, or do some sellers/brokers tie NDA signing to LOI submission? Would appreciate any quick “what’s normal” guidance and any red flags to watch for. Thanks!

Reply by an intermediary
from Mount St. Mary College in Orange County, NY, USA

We often do a "teaser" that we will share without a NDA, but nothing past that. Its important to think about the sellers perspective in the "Search Space" this business often reflects their lifes work and they feel protective of the info. Additionally widespread knowledge of an owners intent to sell can impact employee retention and competitors can exploit this info, just to name two concerns amongst many. Read it and make sure to understand but get used to signing NDA's.

Reply by an intermediary
from Baruch College in Roslyn Heights, NY, USA

Hi Eyerusalem, NDA's before receiving any detailed info is very normal and is the standard. Most business owners are very fearful of people finding out they are thinking of selling their business. They don't want their employees, customer or vendors to get concerned which could negatively impact their business. Having buyers sign NDA's is one way to help business owners with this concern.

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