Red Flag or Standard M&A Practice? Draft APA Before Customer Intros

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February 05, 2026

by a searcher from Georgia Institute of Technology in San Francisco, California, USA

Currently in the LOI phase, I'm looking to have a casual chat to learn about the seller's top 5 customers. The broker I'm working with insists on a drafted purchase agreement before initiating the conversations. Just for some context, the seller has had a couple of buyers fall through during the process due to financing gaps, so they may be more cautious this time. Is this expected?
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Reply by a searcher
from The University of Chicago in California, USA
Do you mean chat with the seller about the customers, or a chat directly with the customers? I understand the sensitivity. The seller loses what little leverage they have left. I'd think there might be an indirect way you can get to what you want. Speaking to customers under guise of consulting, fielding a short survey, etc.
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Reply by an intermediary
from University of Notre Dame in Los Angeles, CA, USA
While it can depend on the industry/deal size, etc., I wouldn't necessarily consider this a red flag. The broker just wants to make sure you're serious about the process.
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