Transaction Readiness

A Key to Growth, Capital Efficiency, & Valuation

Keys To Maximizing Value

  • Tech companies are bought-not sold
  • You need to be ready when the Buyer “comes a courting”
  • Strong diligence enhances seller leverage
  • Capital efficiency most important to investors 2025

Buyers Really Care

  • Buyer’s SWAT team descends on every aspect of business while Seller attempts to conduct business as usual
    • Seller management scrambles to meet Due Diligence requests
      • Battle tested, multiple deals in a month, large checklists
  • Mismatch of Buyer’s Due Diligence teams and Seller’s resources
    • M&A process & execution are core competency for Buyers
    • Large teams of dedicated experts
    • Strategy, Finance & Operations, Legal, HR, IT
  • Buyers will make own assessment of the health and hygiene of your business
    • If Buyer passes, you may never know exactly what turned them off
    • Buyers back away from >50% of deals during due diligence

Deadly Sin #1
Lack of Validation of Benefit to the Buyer

Validation of benefit to the Buyer

  • Can you provide the evidence to support the Buyer’s business case to purchase your Company?
  • Will your customers validate the value when called by Buyer…do you know what they will say?
  • Is your team aligned on articulating value proposition to Buyer? 

Deal Impact

  • This is the first and most important hurdle
  • If cannot validate business case at start, the Deal Team will report back to Business Owner that there is no “there-there”
  • High probability of a Deal Killer-no second chance

Deadly Sin #2
Lack of Strategy

Due Diligence Questions

  • Market Strategy
  • Growth Drivers & Sizing
  • Competitive Landscape 
  • Product
  • Technology
  • Customers
  • Sales
  • Growth & Product
  • Financial Overview
  • Capital Efficiency

Deal Impact

Strong business case with Buyer/Investor

  1. Pitch Deck that nails it
  2. Coherent 3 YR Strategic Roadmap with Management Alignment
  3. Operating Plan. Assumptions challenged & In-Sync with item 2

Deadly Sin #3
Lack of Capital Efficiency

Due Diligence Questions

  • Sales Efficiency
  • CAC Payback
  • Upgrade Path
  • Expansion Motion
  • Customer Retention
  • Net Retention
  • Pricing
  • Gross Margin
  • Incorrect or insufficient resource allocation
  • Incentives
  • Compute Spend Mgmt
  • Revenue per Headcount
  • Burn Multiple

Deal Impact

  1. Capital Efficiency is most important to Buyer/Investor in 2025
  2. Operating in the “Rule of 40” and “1.5X EBITDA to 1.0X revenue” zone

Deadly Sin #4
Lack of Business Operationalization

Dynamics

  • Standardization in place
  • Math in place to assess performance and course correct
  • Forecasting Rigor
  • Operating Drills
  • Streamline & Automate. “Act 30/30” Principle, save waste by 30% in a process and use it to increase revenue by 30%
  • Organization. “80/20” Principle, each 80 for a project needs to have a qualified 20 to ensure the project is delivered
  • “3 X 20” Principle. Have 3 options to achieve the goal  

Impact

  1. Lack of Alignment to the Strategic Plan.
  2. Loss of focus and direction leading to confusion, wasted resources, increased risk, and negative impact on bottom line
  3. Deliver a cohesive financial plan that matches and supports the strategic plan, having challenged and validated assumptions

Other Deadly Sins

Deadly Sin

  • Failure to Show Ownership of Intellectual Property
  • Are there potential lawsuits or litigation that may surface during due diligence or once Deal is announced?
  • Quality of accounting and forecasts.
  • Do any of your agreements have non-standard terms (exclusivity, termination rights) that could impact the value to Buyer?

Deal Impact

  1. Going back to gain “permissions” or to remediate 3rd party code can be time consuming-often a Condition to Closing
  2. Unresolved claims will REDUCE Deal Value, either at Close or from Escrow
  3. Identified exposures will directly REDUCE the Deal Value
  4. Non-assignment or cancellation of customer contracts can reduce future revenue and reduce the value of the Deal

Transaction Readiness Services Phase 1

  • Phase 1. Risk Assessment: A Holistic Strategy | Financial | Operational Review

    Assesses M&A risk factors. Identify gaps in strategy, capital efficiency, and bottlenecks across teams, workflows, and systems. Recommend a course of remedial action Transaction Readiness Services

  • Interviews: CEO, CRO, VP Product, CTO, CFO, FP&A etc.
  • Analytics: Lakeview Advisors internal analytics
  • Summary Report: Identify areas for improvement in your transaction readiness, strategic/financial plan, Org structure, financial, and operational frameworks
  • Recommended Action Plan: Recommended remedial actions

Transaction Readiness Questionnaire

Transaction Readiness Services Phase 2

Phase 2. Lead/Oversee the specific implementation of the recommended remedial actions.

  • The Lakeview Advisors team will supplement your FP&A/SWAT team
  • Perform the specific implementation of the recommended remedial actions
  • Strategic Planning Session with deep dives in the risk areas
  • Implement initiatives to optimize internal financial/operational processes, Org structure, drills, workflows, automation to drive efficiencies and operational reliability

A team of battle hardened CFOs and COOs who can team up with your FP&A, Operations, and Management teams to achieve your Growth, Capital Efficiency, Funding, and Exit goals

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