If you are considering raising capital or selling your company, here are a few of the items you should consider having on hand; they will be among the first things requested:
- Summary of the need for capital or reason for a sale or recapitalization
- Financial statements for the prior 3 years and current year-to-date
- List of sales by major customer for the prior 3 yrs and current year-to-date
- List of sales and gross profit by product or service type (assuming the business has multiple lines) for the prior 3 yrs and current year-to-date
- List of major suppliers and the % of total cost of sales each represents
- Basic organizational chart
- Summary of any excess owners excess compensation, rental expense above or below market rates, and/or excess owners benefits for the prior 3 yrs and current year-to-date
This list expands on the list on our website.
Having this information ready will help a potential capital source, be it a bank, private equity firm, etc., more quickly determine whether there's a fit, and if so, how they would structure the deal. It also gives the impression that you are serious about doing a transaction, which is helpful.