14 Oct Why Won’t My Deal Sell?
Let’s brainstorm together.
- Is the deal itself a bad deal?
- Does the team lack depth or is it incomplete?
- Does the company have a lack of traction and track-record?
- Has the company or advisor produced poor marketing materials?
- Was the marketing list sufficient to create a true “market” for the seller or issuer’s stock?
- Perhaps the marketing outreach was poorly-executed?
In my experience, an incomplete team and lack of experience/track record are the two biggest deal-squashers for capital raise transactions. Also, today’s capital raise peddlers like to “post and pray” to Reg D 506(c) platforms, hoping accredited investors will simply flock to their offering. Not so. All deals require direct outreach, including regular blocking and tackling.
For sell-side deals, it depends. Assuming the deal has meat on the bone (say EBITDA of $3M+), the deal is likely the inheritor or beneficiary of poor marketing and outreach execution. Otherwise, most sell-side deals are highly-dependent on a dealmakers ability to 1) create great marketing materials 2) build a quality list with the most likely acquirers 3) perform direct phone and email outreach to the list and 4) help negotiate among would-be acquirers and get acquirers to come to the table with their intentions.
When there is meat on the bone, there is no reason a seller should walk away with zero offers.
Whether the valuation meets expectations is another matter entirely, but a sold deal is the culmination of many disparate factors, including all of those listed above. If your deal isn’t selling, perhaps it’s time to get serious and hire an investment banker. Just a thought.