Sometimes the next step is to stop circulating the deal

A financing process can become busy without becoming more credible. The presentation travels, meetings accumulate and new names join the conversation, while the same unanswered question returns.

Perhaps the ownership position is unclear. Perhaps the commercial case depends on a contract that has not been secured. Perhaps the numbers cannot be reconciled.

Institutional appraisal and diligence exist partly to identify issues that prevent an investment from proceeding. At the origination stage, recognising such an issue early can be a useful commercial decision.

Identify what another introduction would change

If the obstacle is a mismatch with one institution’s mandate, a different capital provider may be relevant. If the obstacle is missing authority or unreliable information, widening the distribution can spread the problem.

The sponsor needs a clear account of the issue, the evidence required to resolve it and the work needed next. That may call for revised scope, further preparation or a decision that the opportunity should not proceed.

Protect the relationship around the opportunity

Capital providers remember the quality of what they are asked to review. Advisers and sponsors benefit from a controlled process in which material changes are communicated honestly.

A pause is most useful when it has a purpose. Define what would justify restarting and who is responsible for the necessary work. Avoid allowing a suspended process to keep circulating as though it remains active.

B&A’s view is that judgement includes selection. The willingness to progress a sound opportunity should sit alongside the willingness to stop an unsound process.

Future access is strengthened when today’s introductions are made with care. Sometimes the best next move is to improve the deal before asking anyone else to consider it.