Closing the Deal


In Chapters 1 and 2 we outlined the overall financing process and provided a flow chart (in Figure 1.1) to highlight the fundamental elements of capital formation and to provide a framework for discussion and analysis. We addressed the need to understand the current financial and strategic position of the company, the business plan, industry comparable performance, and the forecast and a go-forward strategy. Without a clear strategic vision and a disciplined business plan, companies seeking capital will be comparatively disadvantaged in their search, operating in a reactive rather than proactive mode. In addition, we presented the basic concepts used to establish the business valuation, and we emphasized the importance of securing buy-in among the stakeholders with respect to realistic valuations. Without a realistic sense of valuation, stockholders may cause management to expend significant time and organizational resources only to have a potential transaction fall apart in midstream.
In Chapter 3 we introduced an overview of the acquisition process and how to think about recapitalizations. In Chapter 4 we presented a framework to view the capital structure of start-ups, emerging growth companies, and middle-market companies. We highlighted the concept that raising capital is driven by “when a company can raise money” and not by “when it needs funds.” We provided a lookup table (Figure 4.2) indicating the major types of financing ...

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