Ten Ways to Underwrite a Conservative and Realistic Base Case

When building a model and underwriting an acquisition more broadly, many prospective acquirors understandably struggle with how to balance calculated optimism about the future on one hand, with a sense of what is realistically achievable on the other. While investing is an inherently optimistic act (after all, you wouldn’t make the investment if you didn’t believe that the future was likely to be better than the present), acquirors must balance that optimism against the company’s historical performance, possible future headwinds outside of their control, and execution challenges common to first-time CEOs, among other considerations. This week, I present prospective acquirors with ten different ideas on how to underwrite a conservative and realistic base case. Though all of them certainly don’t need to apply to your transaction, the more of them that do, the more likely it is that your base case reflects a grounded view of what’s actually achievable. They are as follows: (1) Don’t Automatically Underwrite to a 35% IRR (2) Base Case Projections are Actually Supported by Historical Performance (3) Every Metric Does Not Need to Improve Every Year (4) Multiple Expansion at Exit: To Assume or Not to Assume? (5) Be Clear on the *Specific* Investment Thesis (6) Leverage: Easy to Add, Hard to Take Away Specific to Acquisitive Growth Strategies: (7) Be Careful Buying a Company Whose Attractiveness is Contingent Upon its Combination with Another Company (8) Don’t Assume 3-5x Entry Multiples for Tuck-Ins If You’re Paying 7x for the Platform (9) Synergies are Great, but Don’t Over-Rely on Them (10) Economies of Scale are Great, but Don’t Over-Rely on Them Link to Article: https://mineolasearchpartners.com/2026/04/30/ten-ways-to-underwrite-a-conservative-and-realistic-base-case/