Key questions to ask prospective buyers to assess their suitability
In a highly competitive sale process, the selling entrepreneur may be forgiven for thinking that the transaction resembles that of a dating service. Your M&A advisors (the dating agent) prepares your profile, and then offers it to the wider dating universe to attract interest. Those interested parties share their own profiles for the seller to consider before going on the first blind date, to determine whether there is merit in pursuing a longer relationship.
While M&A advisors may well take offence by such a flippant comparison, citing emphatically that their stressful work involves highly complex, multi-layered and emotionally-draining dynamics of equity transfer, there is however one important learning from such a contrast – being that both parties on the date are being mutually evaluated. It is perhaps easy to understand that after a blizzard of diligence questions and blurry of management presentations, why the seller may feel slightly defensive and feel as exposed as a display on the high-street shop window. The reality however is that for premium assets, buyers still need to show-case their credentials to shareholders in much the same way as the flirting dances of the Amazonian birds of paradise.