Shoot the Moon with Revenue Rocket

Do you have the Resources to close a Transaction?

Episode Summary

Proof of funds take many shapes and sizes, but it's important to know the buyer has the proof. When selling your company you need to ensure the buyer has the resources to close the transaction. Cash, stock or a combination thereof. It's common practice for the seller to do a fair amount of due diligence on the buyer (we talked about this in the last Shoot the Moon episode). After all it is only an assumption of capabilities until a combination is completed.

Episode Notes

Here are a few things to consider when understanding the buyer's motives, economics and resources:

• Why are they valuing your business as they are? 
• Does the buyer's board of directors share the passion and commitment of a successful combination 
• What is the currency and who is funding it? 
• Operating capital 
• Capital formation 
• Debt 
• Equity (can the cap table afford it) 
• Lender details and expectations 
• If outside money is being used, have you met with the stakeholder to understand their willingness to fund the deal and what the ROI is for them? 
• Is the cash in hand (can you see it on the balance sheet)? 
• Why work with an M&A advisor? Best interests, can be the bad guy…
   

Summary:

• Proof of funds takes many shapes and sizes
• Seller needs assurances of the resources
• Work with an advisor like Revenue Rocket