How to determine which credit company you should choose
There are no hard and fast rules to determine which businesses VCs and banks will support in a traditional MBO. Investment fashions are subject to change, whilst each financial institution will have its own particular investment policy. However, as a generalisation, VCs will consider a business that has the following attributes:
A reasonable asking price arrived at through an acceptale valuation method.
High growth potential, supported by a professionally produced business plan and a trading record that supports the financial projections.
In a high tech sector, such as medical and related industries.
Acceptable CEO supported by suitably competent and entrepreneurial management that is prepared to invest some of its own money in the buy-out.
The ability to borrow against its own assets.
Feasible exit strategy, preferably through a flotation or a secondary sale, within five to seven years.
About Me
My name is Caroline Derringer. I work as a professional business advisor and university professor of economy. The content of this blog is based on a series of lectures that I delivered in a few major US universities. They will soon be published as a book, but for the time being you can read them online.
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