Every Deal is About the Future

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Capital providers or partners may have reference metrics based on historical performance (e.g. a multiple of EBITDA), but outside of hard asset valuation no transaction thesis is based on last year’s earnings. Instead, it’s about the belief and credibility to replicate and grow upon that historical foundation. So how is that belief and credibility established?

Know Your Story: Connect your potential to financial outcomes and provide the roadmap to get there. Aka have a plan, and the more detail behind it the better. Your team need not have done it 10x before to be credible, but if you are heading into uncharted growth waters, the more scenarios you can work through to proactively respond to changes in wind direction, the safer the journey will seem.

Know Your Audience: Connect your story to the perspective of those on the other side of the table. Lenders, growth investors, and buyers think about the world very differently in terms of risk and return. Showing that you understand their individual perspectives goes a long way to establishing credibility for your team.

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