Short List

The short list is the narrower selection of addressees derived from the long list who are actually approached in a transaction process. In the mid-market it usually runs to around twenty to seventy names depending on the process, or only a handful in a bilateral approach. Selection turns on strategic fit, financial capacity, transaction experience, the speed of internal decision-making and whether an approach is acceptable from the seller's point of view. A mix of strategic acquirers and financial investors is standard, because only competition between the two groups moves price: strategic buyers can price in synergies, while financial investors decide faster and with lower completion risk.

The selection should be distinguished from the long list, which has its own entry in this glossary and is designed for completeness, whereas here prioritisation is deliberate. The list is approved by the seller, who can strike individual names, for example competitors who would gain insight into sensitive data during the process. Outreach then proceeds in waves rather than simultaneously, so that responses can be assessed and the argument sharpened.

Experience shows only some of those approached sign a confidentiality agreement and a smaller number submit an indicative offer, which is why too short a selection puts the process at risk. Conversely every additional approach increases the risk that the sale becomes known, which can unsettle employees, customers and suppliers. That trade-off is where the actual work lies at this stage. The status of each addressee is documented continuously, because it shows the seller whether the argument is landing or whether the teaser and the approach need sharpening before the circle is widened. It is recorded for each addressee who owns the first contact, because duplicate approaches through different channels create the impression of an uncoordinated process.