November 2026 Newsletter: How AI and the Internet Are Lengthening the Sales Cycle in Lower Middle Market M&A and Main Street Transactions
Bonita Springs, FL • Columbus, OH • New York Metro
Edison Insights | Buyers & Sellers
How AI and the Internet Are Lengthening the Sales Cycle in Lower Middle Market M&A and Main Street Transactions
There was a time when a first-time buyer walked into a transaction knowing they did not know much. They leaned on their broker, CPA, and attorney. They asked questions in the right order because they had to.
That buyer is disappearing. Today's buyer shows up with a 60-question list generated from an artificial intelligence (AI) query, a valuation opinion built from a chatbot, and a due diligence request that runs longer than the business's lease.
Everybody became an expert overnight. The problem is that expertise is not about knowing things, it is about knowing when things matter.
Knowledge is not experience
AI is a remarkable tool. In minutes, anyone can learn what earnings before interest, taxes, depreciation, and amortization (EBITDA) add-backs are, how an asset sale differs from a stock sale, or what a Quality of Earnings (QoE) report covers. That access to knowledge is genuinely valuable.
But knowledge tells you what exists. Experience tells you what applies. AI can explain every clause in a purchase agreement, but it may not identify you need a clause addressing pre-paid maintenance for an HVAC business or gift certificates for a medical spa.
Inexperienced buyers now push knowledge instead of applying it. They raise every issue AI mentioned, with the same urgency, at every stage. The result is noise. Excess noise will slow transactions down and can eventually kill them.
The Confidential Information Memorandum (CIM) question avalanche
The CIM is meant to help a buyer decide one thing: is this business worth a deeper look? It is not the place to resolve every detail of the transaction.
Yet many of today’s buyers upload the CIM into an AI tool—often a free, consumer-level, or publicly available AI tool, platform, or service which assuredly violates the non-disclosure agreement (NDA) they signed and exposes the business’s confidential information to third parties or the public not bound by any confidentiality obligation—and ask it to “generate questions.” The tool obliges. It returns 50, 75, sometimes 100 questions. Most fall into one of two buckets:
Not relevant
Questions about System and Organization Controls 2 (SOC 2) compliance for a landscaping business. Questions about international tariffs for a business that buys everything locally. Questions about union agreements in a non-union area.
Far too early
Requests for customer names, employee details, supplier contracts, and three years of bank statements before the buyer has spoken to the seller or signed a Letter of Intent (LOI).
A seller who receives the list rarely feels impressed. They feel interrogated, and they start to question whether the buyer is serious or simply fishing. The broker must spend time triaging questions that an experienced buyer would never have asked at this stage. The good questions, the ones that help confirm if the business is a good fit and verify value, get buried in the noise and often miss appropriate attention.
The exorbitant due diligence list
The same pattern repeats after a LOI is signed. A buyer asks AI for a “comprehensive due diligence checklist,” and it delivers one built for a Fortune 500 merger, not a main street business transaction, e.g., an environmental impact study for an engineering design firm; board minutes from a business that has never had a board; customer concentration data from a retail outlet serving hundreds of customers per day; and other reports no small business has ever produced.
Every irrelevant line-item costs something—always the seller’s time and often additional expenses for CPA analysis, document collection from attorneys, overtime for office staff, etc. The broker and seller must spend time reading the often-exorbitant list, analyzing each request, and explaining to the buyer why items on the list do not apply. Meanwhile, the due diligence period clock keeps running, extensions get requested, seller fatigue sets in, and the transaction eventually falls apart.
Good due diligence is not about volume. It is about focus—the important items that verify earnings, confirm transferability from seller to buyer, and uncover real risk. Experienced advisors and buyers know which items matter. AI, left unchecked, can generate a ridiculous number of items and treat them all as equal.
Smart use vs. misuse of AI
None of this means AI has no place in business transactions. When used well, it saves time and sharpens judgment. When used poorly, it creates false confidence and new risk. Here are the most common areas where AI is used smartly and misused:
Due Diligence
✔ Smart use
Organizing documents and highlighting inconsistencies.
✘ Misuse
Trusting AI summaries as fact and not verifying.
Valuation
✔ Smart use
Stress testing assumptions.
✘ Misuse
Using AI to produce valuations from partial data.
Confidentiality
✔ Smart use
Using a secure, paid subscription-level plan or account with written data privacy policy terms stating that the submitted data will not be used to train or improve the AI models, be kept confidential, and not shared with third parties.
✘ Misuse
Pasting confidential business information into a free, consumer-level, or publicly available AI tool, platform, or service which assuredly violates the NDA and exposes the business’s confidential information to third parties or the public not bound by any confidentiality obligation.
Why transactions are taking longer
Add it all up and the effect is predictable. Premature questions delay LOIs. Bloated checklists stretch due diligence. Flawed AI valuations reopen price negotiations that should have been settled. Every round of back-and-forth adds time.
Time is not neutral in business transactions. The longer a transaction takes, the more things can go wrong. Business performance can dip. Key employees can hear rumors. Financing terms can change. Sellers become fatigued and begin wondering if selling is worth the hassle.
Plenty of good transactions do not die from a single problem. They die from exhaustion.
The irony is that buyers use AI to feel more prepared and more protected. Misused, it often makes them less likely to transact on a business they wanted.
Use AI as a research assistant, not an expert
AI is here to stay, and buyers who use it well will have a real advantage. The key is treating it as a research assistant, not an expert.
Use AI to learn the vocabulary, organize the documents, and pressure-test your thinking. Then bring those ideas to people who have closed transactions: brokers, transaction attorneys, CPAs, and lenders who know which questions matter now, which can wait, and which do not apply at all.
Everybody can be informed today. Being experienced still takes experience. The buyers who understand that difference will ask better questions, earn more trust from sellers, and get to the closing table faster.
If you have questions or are interested in selling or buying a business, contact one of our talented team members for a confidential, complimentary consultation.
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