RAISE A FUND WITH DEALS? OR WITHOUT DEALS? HOW WOULD YOU DO IT?
On a road show recently to many financial institutions locally to secure financial commitments on the leverage side regarding the search, the typical response from the bankers and investors locally is "we won't make a commitment to anything until we have a deal to analyse in front of us."
I believe the conundrum for Searchers in this type of situation (providing they have a strategy for a particular industry or sector where they have plans to consolidate, is providing targets with some sort of proof of funds or bank endorsement letter which would presumably by requested by targets.
Now this would be an issue with regards to moving forward with influencing the target to disclose basic preliminary financial information (Revenue, EBITDA, FCF). Therefore if a Searcher is unable to provide a target with such documentation as mentioned above, how does the Searcher then get to the point of uncovering deals to bring to the table for investors to look at? (This is outside the realm of brokers, finders, buy-sell advisors etc,) This is from the perspective of making those cold calls and setting appointments.
Would love to hear the take on this from the community.