Controlled auction (limited auction)

Definition

A sale run to a short invited list of buyers on the seller's timetable.

Why It Matters

It changes what you are doing from negotiating to bidding, and most searchers meet one without being told that is what it is. The tells are a banker instead of a broker, a dated process letter, and a request for a first-round number before you have met the owner. Two consequences follow. Your edge is no longer being the only buyer at the table, so it has to be certainty and speed instead. And the price is set by whoever is least disciplined in the room, which is a reason to write your walk-away number down before the first round and not after it.