Once you have chosen to erase the content and settings from your iPad, you will need to confirm your selection twice. Because this will set your iPad back to the factory default, Apple wants to double check your choice.
After confirming your choice, the process of erasing the data on your iPad begins. The entire process takes a couple of minutes, and during the process, the Apple logo will appear in the middle of the screen. Once it is done, a graphic asking to be plugged into iTunes will appear.
At this point, the data on the iPad is erased and the iPad is at the factory default. At this point, you are ready to transfer it to a new owner.