To LOI or not to LOI, that's the question.

by a searcher from Canisius College

1 year ago

Hello Searchers and partners.

I received a CIM on a company that I find interesting.  The summary and background were informative, but the financial information was lacking.  I have asked the broker for a full TTM income statement and a breakdown of the SDE add backs and have not heard back.  My thought process is that if I can't get the deal to cash flow then what is the point of an LOI.  But I am wondering if perhaps I should have submitted an LOI to get the additional information.  

Thoughts or feedback would be greatly appreciated.

0 likes
144 views
17 comments

searcher from University of San Francisco

in my experience if you've signed an NDA to receive the CIM, a good broker who has done his/her job in prepping all of those docs should have no problem sending you additional info. I've received anonymized employee comp info, last three years of all financials, etc by asking for it.

1 year ago | like reply | 1 like

searcher from Canisius College

My initial thought was that I needed more information to determine if the deal would cash flow. Why bother expressing intent if I can't make the debt service work? But the IOI is a good idea as a step before an LOI so I will do that going forward. I appreciate you taking the time to respond to my post.

1 year ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Thought piece: Proprietary sourcing methods that delivered 2 acquisitions

6-7x for a Self-funded Search Deal?

Examples of self-funded searcher websites

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.