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Here’s what you need to get your finances in order if you want to be acquired – londonbusinessblog.com

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Over the world, financial transactions have shown an upward trend. In 2021, international mergers and acquisitions (M&A) activity increased significantly, over $5 trillion for the first time in history in deal volume, a growth of 64% from the previous year.

I’ve worked at startups, private equity firms, and high-growth companies, handling acquisitions as both the acquirer and target. In virtually every scenario, each transaction had different requirements and needs based on unique factors associated with each deal. But these differences were based on a few crucial similarities with regard to the financial assets purchased.

If acquisition is a goal for your business, consider the following key elements to establish the best possible financial operations in support of a potential transaction.

Hire the right people

Whatever acquisition route you are looking for, it is important to consider the outcome of the trade – all money is not created equal.

Like most aspects of building a business, success largely depends on the quality of the team. The financial management of a company is no different. Defining clear roles for financial management and hiring experienced staff in this space often makes the difference between a 10x valuation and a 20x valuation when negotiating deal terms.

The level and title of the financial management role will, of course, vary based on the stage and end goal of the business. For example, early-stage startups may not need a CFO. Instead, a strong COO and experienced controller often provide sufficient structure and overview in that first phase.

The decision to forgo a CFO in the first instance can also be a function of budget and/or company ambitions. For companies looking to retain a small team, say fewer than 250 people, a CFO can inadvertently create a top-heavy leadership culture alongside an expensive hire. However, if a company is looking to scale and think about its growth path, the CFO position is a critical role.

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