Due Diligence Readiness

Due Diligence Readiness

Case in Point

An Investment Banking firm needed assistance in gathering and analyzing financial information for the sale of a lower market Government Contractor.

Situation Assessed

An Investment Banking firm needed technical horsepower to gather and analyze the Company’s financial data for presentation within the CIM, while the Bank concurrently prepared the Company’s go-to-market strategy.

Challenges Encountered

  • The Company had information spread across multiple accounting systems spanning several periods and resulting in an incomplete 12-month G/L
  • Adequate financial records for key contracts were not properly maintained, including revenue waterfalls, indirect cost calculations, and unallowable expenses
  • Revenue recognition was not consistent with the Company’s performance of services on specific contracts
  • The Company’s financial team had limited experience with corporate exits and sell-side due diligence

Value
Delivered

  • Fostered a steady working cadence with Investment Bank, becoming an extension of their team during the sales process
  • Consolidated financial information into a single, excel data book and prepared critical financial documents for upload to the data room
  • Assessed the revenue recognition for key contracts, and assisted the CFO with revising internal financial statements
  • Developed a consolidated contract waterfall and created an extension of the model allowing for prospective buyers to run iterative scenario analysis
  • Created a sounding board for the Company’s CFO and finance team regarding sell-side due diligence readiness and what to expect during the exclusivity stage

Outcomes Achieved

  • Alleviating certain accounting aspects from the Investment Bank, which allowed them to spend more time identifying prospective buyers and focusing on the strategic aspects of the sale
  • Mitigating financial risks and developing proper financial supporting documents created downstream efficiencies for the buy-side due diligence teams
  • Providing a sounding board the Company’s financial team managed their expectations and inspired confidence, resulting in a successful and timely deal completion

Business Model Redevelopment

Business Model Redevelopment

Case in Point

A middle market education company needed to redevelop its business model and assess future growth potential.

Situation Assessed

A middle market education company needed to redevelop its existing business model and unlock the next phase of revenue and strategic growth.

Challenges Encountered

  • The Company had historical challenges keeping up with competitors and expanding its revenue streams into new areas
  • In-house talent had no exposure to alternative business models
  • Previous attempts at partnering with employers were not successful, creating an internal mindset resistant to change
  • Stakeholders at the campus and headquarters were not aligned on importance of business model redevelopment and topline growth

Value
Delivered

  • Performed in-depth interviews with students and employers to assess the viability of different business models to generate success for the Company
  • Eliminated two of the three market segment areas, where competitive position was relatively weak
  • Conducted market research on successful implementations of three other business models to develop shortlist of potential candidates
  • Developed a new economic structure and outlined implementation strategy for the Company
  • Designed pilot program to expand the student base and increase topline growth

Outcomes Achieved

  • Launched pilot program at one campus and drove participation of initial students and employers
  • Pitched 20 employers and sold initial customers
  • The developed future financing model for students and employers allowed for sustainability of the Company’s program
  • The established playbook provided a scalable pilot program across entire enterprise

Corporate Turnaround

Corporate Turnaround

Case in Point

A lower market company, with a Software-as-a-Solution (SaaS) offering and a strong underlying value proposition, had a negative outlook with stalled revenue growth.

Situation Assessed

While the Company had a very strong value proposition, it was experiencing long sales cycles in the corporate market and had a relatively small sales funnel of corporate prospects.

Challenges Encountered

  • The Company had not experienced scaling of its business
  • Multiple areas of focus limited resources for product development
  • Focused on three distinct markets with limited success in each area
  • Limited internal infrastructure for corporate customer support
  • Fatigued investor base

Value
Delivered

  • Determined the best market and target customers for success in alignment to the competitive position of the company
  • Eliminated two of the three market segment areas, where competitive position was relatively weak
  • Focused on aligning the company’s competitive position with the leaders in the corporate market
  • Secured C-level meetings with several major corporate account who would align well with the company’s value proposition and competitive position

Outcomes Achieved

  • Within one year, the company secured the top two corporate accounts within its target market, outcompeting major billion-dollar companies solution offerings
  • The company’s sales funnel dramatically increased as a result of the top two corporate wins
  • Receive an all cash offer from a strategic acquirer
  • Investors went from a planned write-down of its investment to a major success

Capital Raise Support

stacked coins in increasing with graphic bar graph overlay

Capital Raise Support

Case in Point

An emerging Cleantech company with a revolutionary product required financial executive support through a fundraising process.

Situation Assessed

A cleantech company needed assistance in project management, updated accounting structure and investor outreach to put them on the track for accelerated corporate growth.

Challenges Encountered

  • The Company did not have an internal financial expert to act as a liaison between Management and the potential investors
  • Books and records required extensive clean-up, along with a cash-to-accrual conversion of the Company’s activity
  • The Company’s Cap Table was outdated and key pieces of information were missing
  • Additional investment was needed to hit a key threshold to trigger the convertible notes conversion and de-leverage the balance sheet

Value
Delivered

  • Worked alongside the Chief Executive Officer and Board of Directors to, provide deal expertise and project management, through the due diligence process
  • Managed additional investor outreach and corporate development efforts
  • Developed an 18-month cash flow forecast and an itemized Sources & Uses, providing investors with a detailed financial roadmap for increased commercialization
  • Developed an iterative Cap Table model to the investor group with support behind key valuation metrics, providing greater assurance on pre- and post-money valuations
  • Implemented necessary improvements within the accounting and operating structure to create greater transparency into working capital needs

Outcomes Achieved

  • The Company was able to close its investment round at an increased pace, with the existing terms set forth within its original term sheet
  • Provided the transparency needed for the CEO and Board to see an accurate financial state of the Company
  • Provided key considerations towards increased revenue and profitability
  • Developed a successful relationship leading into follow-up on corporate development and commercialization support

Market Transition

B2C and B2B

Market Transition

Case in Point

A lower-market company with a strong value proposition received a growth capital injection, and required assistance in transitioning its offering from B2C to B2B.

Situation Assessed

While the Company had a very strong value proposition, it had limited experience in the corporate B2B market. The Company initially chose the B2C market as an entry point for its offerings and reached a pinnacle where cost of customer acquisition was impeding the financial model and posing further challenges for a strategic exit.

Challenges Encountered

  • No business development experience of corporate accounts and sales team
  • Long sales cycles for corporate customers
  • Limited investment available for a new market segment
  • The Company had no referenceable corporate customers
  • Limited internal infrastructure for corporate customer support

Value
Delivered

  • Researched alternative distribution channels for indirect access to major corporate clients
  • Formalized the value proposition for the B2B market
  • Developed the competitive differentiation and positioning for the B2B market
  • Secured board approval and investor support for a major market shift
  • Developed the target customer base for initial market penetration

Outcomes Achieved

  • Secured multiple channel partners who had strong corporate connections and existing clients
  • Secured two of the top five corporate accounts in the targeted client customer base, as well as increased the corporate referral base
  • Dramatically reduced cost of customer acquisition
  • Successfully repositioned the company in the B2B market for long term prosperity
  • Greatly enhanced the value proposition of the Company as it began formal discussions on exit strategies and potential acquirers