Advice for self-funded search with no current POF?

searcher profile

December 17, 2024

by a searcher from Yale University - School of Management in New Haven, CT, USA

Hey everyone. I’m currently working in a Chief of Staff role for a self-funded search (run by a former colleague) while concurrently doing year 2 of my MBA. In my search for companies, I keep running up against asks for POF (proof of funds) before I can get about ~20-30% of CIMs. Have talked about this with my founder and he says we don’t need this yet and won’t have capital in hand until we find the right deal…but at the same time, I’m realizing we’ll miss out on a number of deals by not having this. Any advice from others who have been in this position? Should I trust my founder when he says we don’t need this - he is also new to the search space although like me has taken steps to educate himself - or are we making a mistake? Appreciate the community’s thoughts.

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Reply by a professional
from University at Albany, State University of New York in Delray Beach, FL, USA
Everyone will have a different view. Here's mine: I require entrepreneurs I work with raise the anticipated equity capital before starting their search for targets. I have talked to dozens of first-time searchers who signed an LOI for a decent acquisition and then aren't able to raise the equity capital necessary to close. Complete waste of time for the searcher, lenders, business brokers, and sellers. Therefore, I'd recommend raising the anticipated equity capital first....
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
We can do pre-approvals on transactions as well. You can reach me here or directly at redacted
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