Dealing with Proof of Funds before revealing detailed financials?

by a searcher from University of Rochester - William E. Simon Graduate School of Business

3 years ago

Has anyone dealt with brokers / owners of businesses that ask for proof of funds before they offer to open up the books for you? This is a chicken and egg problem I've been running into and I'm having a hard time getting around it given that I'm currently self-funded? Any advice on how I can get to the books to better evaluate whether its suitable for acquisition?

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searcher from Yale University - School of Management

From searchers I have spoken to, investor interest letters as stated above are the best way to do it. That being said, most have said that they expect this to only be required at the post LOI phase.

8 months ago | like reply | 0 likes

searcher from Humber College

I agree with you, John. A broker recently asked me for POF, and I explained to the broker that I needed to see the CIM and the financials for my team to evaluate and continue the conversation. They decided to provide the CIM and the financials after signing the NDA. However, the financials were incomplete. I asked for the updated financials, and I was told by the broker I needed to provide POF to answer my standard questions. By the way, the CIM was also outdated. For me, it is a simple move on to another opportunity. There are many other companies out there for sale.

2 years ago | like reply | 0 likes

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