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
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