Our Process

We conduct an in-depth analysis of documentation. The objective is to thoroughly familiarise our team with the opportunity. This enables us to clarify objectives and priorities and discuss how to best present the opportunity. This also serves as a “mini-audit” of the proposed transaction, to identify and address likely obstacles to a successful deal, including financial, operational and legal issues.

Our knowledge and network of investors and lenders is extensive. Developed over the past 12 years and updated by our analysts continually, our proprietary database details a multitude of lenders and investors, is industry sector and vertical specific and contains details of past transactions, criteria, and up to the minute areas of interest. This covers high net worth individuals, family offices, specialised funds, banks, private wealth managers, opportunity funds, value-added funds, core funds, core-plus funds, pension funds, insurance companies, mezzanine lenders, offshore capital, national and international banks, conduits, private money funds, and other providers of debt and equity. However, it is our in-depth knowledge and relationships at the highest levels which enable us to ultimately execute. We cull carefully from our database to create an initial lender/investor shortlist, with each prospect intensely scrutinised for suitability enabling us to develop a highly qualified targeted lender/investor list based upon our intimate knowledge of their likes and dislikes, and our ongoing conversations with them. The result is a very carefully considered, client-specific, customised shortlist.

We prepare our own presentations that provide a detailed and compelling overview of the opportunity, its market opportunity, strategy and capital structure. This is not a business plan, but rather a document tailored specifically to the target recipient – in many cases we will develop a number of differing presentations, each tailored to the specific recipients “hot buttons”. Our objective is to carefully and strategically position the opportunity in language the recipient understands, clearly articulate the value proposition to the investor or lender, and elicit an enthusiastic positive response.

We have developed and maintained excellent relationships with the investors and lenders we work with over many years. These relationships help to ensure our clients will receive serious consideration by a prospective investor or lender. Our relationships give us unique insight into the objectives and parameters of a great many investors and lenders, enabling us to more effectively and strategically position our clients.

We do not advise on valuation or pricing. But we do analyse the current market valuation of comparable companies or brands where applicable (applying a discount factor because of their liquidity), as well as relevant transactions. With this baseline, we assess a host of client-specific factors which could enhance or diminish the company’s value to a prospective investor or lender. Included in our assessment are the client’s revenue composition, recognition practices and growth. We scrutinise recurring revenue, cash flow and operating expenses, as well as margins and profitability. We also consider the client’s offering, services, product, target market, market opportunity, competition, sales model and pricing. Our objective is to gain an informed and insightful understanding of the likely range of valuation.

Once we have qualified interested investors/lenders, we (or they) typically suggest an initial call. This is a critical step in the process. We help each client prepare for this meeting, providing detailed guidance about the presentation and many of the questions that are likely to ensue. We participate in and facilitate this initial discussion, as well as follow-on meetings and discussions. After each teleconference or meeting, we follow-up to solicit feedback from the investor or lender, addressing concerns and building interest.

If the prospective investor or lender determines there’s synergy, more detailed discussions will follow. A second meeting often demarcates serious from casual interest, and will likely involve additional and higher level investor/lender representatives.

Some prospective lenders and investors will indicate at an early stage likely terms and /or deal structure, while others conduct extensive due diligence first. We think it is sometimes better to defer negotiations until further value has been developed in the prospective investors mind and they have begun to “invest” in the prospective transaction.

There are several potential combinations, each with tax ramifications, many with significant upside, and some with substantial risk. The deal structure must address and accommodate such disparate factors as the financial needs and risk adversity of the parties, the financial condition of lender, investor and investee, and the financial, reporting and regulatory compliance impact the proposed structure will have on all. We help by exploring options, clarifying goals, and eliminating confusion.

Once there’s agreement on the pricing, structure and terms of a transaction, the parties will ordinarily sign a non-binding Letter of Intent (LOI), which serves as a precursor to formal documentation. As the LOI is drafted and reviewed by the parties’ attorneys, we assist in addressing and resolving issues as they are identified. Due diligence usually follows quickly after the LOI is signed, and can consume attention for a lengthy period. However we look to short-circuit that by attacking due diligence early on so that we can better prepare the deal process, and assist in helping resolve issues when they arise.