Startup Funding Espresso – Financial Projections for M&A

Financial Projections for M&A

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

In selling your business, the prospective buyer will want to see financial projections showing how you expect the company to perform.

There are three financial statements to complete:  Income statement, Balance Sheet and cash flow statement.

It’s important to develop a realistic projection.

The projections should take into account the buyer and their plans for the company.

The goal is to show how acquiring your business will help them.

The buyer may want to reduce cost, or increase sales, or maintain the status quo.

The buyer will review the financials for any outstanding obligations such as debt or accounts payables.

They will want to understand the assumptions used to build the numbers.

They want to know how much you believe in the forecasted numbers and may ask you to take ownership of achieving the forecast.

It’s important to understand why the buyer wants to acquire your company before building your financial projections.

The goal is to show how your company can help solve the buying company’s problems.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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