Deal Team

October 11, 2023

by a searcher from University of Maryland at College Park in South Bend, IN, USA

Hi all - I'm curious about what professionals people have included in their deal teams in early stages/first deals.

Specifically, I know you want a lawyer, accountant, lender... does anyone normally pull in a financial consultant/advisor? Cert valuation analyst? Others I'm not considering? Or are these functions that would really be redundant and/or covered by others? If you do get them on board, at what point in the process and at what scope? I'm asking specifically for my first deal, which will be on the relatively small side ($1mm cash flow)

Thanks!

Reply by a professional
from Clarkson University in Orlando, FL, USA

Operations / Operating Partner — for complex or niche deals, bringing them in early helps uncover real operational issues and opportunities. It’s a way to strengthen the investment, no matter the hold period or structure.

Reply by a searcher
from Columbia University in Las Vegas, NV, USA

I think it depends on what type of deal you are pursuing. If you are acquiring the whole thing outright (I would assume so based on it being on here) and if you have investors, then I would scale the deal team to match the size. If you are buying $1M in cash flows at say 6x, then I would focus on legal & accounting at this point. A good law firm also will have tax in-house to make sure you are being efficient with your capital. If you have outside investors, you might need to do a bit more but then you can charge the diligence fees to the investors. I haven't done a full acquisition yet, but I do growth financings for my day job - and its normally lawyers with tax included on our side & we require the company's legal/accounting to do the other stuff.

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