Maximizing the Likelihood of Closing a Deal This Year

A few months ago, I posted a related article about deal timing titled ‘Maintaining Deal Momentum in the Summer Months’.  Now it is early August, and we are deep in the summer slowdown.  Many of us are enjoying the last stints of our summer holidays before returning to our homes and offices for the rest of the year.  I typically tell clients that business effectively starts back up after Labor Day, when there are enough people consistently in the office to get robust meetings and make decisions.  That leaves limited time as we quickly move through the fall months and towards the winter holidays and end of the year.  Here are some keys to success as you roll out a process for the rest of the year.

August – Develop traction with champions and get all materials ready to go

While it may be challenging, or even impossible to get a meaningful face to face meeting during the month of August, you can typically find opportunities to schedule one-on-one calls with people that can serve as champions for your transaction.  Conversations may be light, but you can provide overviews or updates which begin to prepare your targets for an aggressive schedule starting in September.  The objective is to have your champion(s) positioned to place your opportunity at the top of the list when it is time to allocate resources next month.

It is equally challenging to get your internal team together, however August can be a great time to allow your contributors to work virtually on presentations, white papers, and analyses that you will need.  In fact, many of these items can receive better attention when resources are out of the office.  The key is keeping people organized and reasonably on task.  The other items to add to your to-do list: Updating the virtual data room, talking with your attorneys (IP and corporate) that you plan to involve in the deal, as well as general discussions of strategy among senior executives and the board.

September – Gaining momentum and preparing for road show(s)

The objective for September is to quickly address questions and get calls scheduled to discuss the opportunity.  Having short teaser style information (i.e. 2 pager) can be very useful for first socializing an opportunity with teams, and the next step is a conference call with relevant resources to discuss a short non-confidential deck.  The process needs to build momentum, so your effort should focus on having the right people, and right information, at the right time.  Be prepared to quickly triage CDAs and cycle them back to counterparties.

October – Moving towards term sheets and diligence

Now for October, where the funnel of interest should be trimming down, and you will need to target in-person meetings to present the team and opportunity in depth.  You should identify critical questions in advance, and as needed, bring in subject matter experts to help with the storytelling.  Transaction committees typically only meet once a month, so you will need to inquire about each party’s internal process and attempt to stay ahead of the timing.  Frequent check-ins with the champions are essential to moving through this phase and getting a party to a term sheet.

November – Select leading parties and move towards contracting

Ideally, you’ve received a good offer in late October or at the start of November.  Move quickly to negotiate, and have your management and board in a position to make the selection of a party to take into contracting.  If possible, connect the lawyers prior to generating the first draft, or even better, get the contracting working groups together for a kickoff dinner to build comradery.  There is a brief window between signing of a final term sheet and the start of contracting – It’s a great opportunity to mark the milestone with a meeting between the teams that will be working together on the definitive agreement.  Discuss the key concepts and get the lawyers talking collaboratively on how to develop the constructs.  In-person drafting sessions at an offsite location can be very helpful to quickly turn drafts and will result in much less redlining.

December – Can you close before the end of the year?

In certain cases, strategic buyers and investors can be motivated to close a transaction before December 31st for accounting purposes.  Any process should attempt to exploit that.  Contracting is a significant undertaking, and a drain on resources, but lawyers will gladly work on a deadline to get things wrapped up.  The bigger questions are whether your counterparts can put the necessary decision makers in the room during the holidays, and whether your management and board can work together to make the needed final decisions to wrap up the deal on this timeline.

While this is certainly an aggressive timeline, I can speak from experience that deals can and do get done this way.  Timelines often lag, and going through the end of the year and into January can be a risk or benefit.  When you get to the annual JP Morgan Conference, you may be able to create leverage through face-to-face interaction with secondary targets that might elevate their interest and create a competing offer.  But the opportunity goes both ways, and if your prospective partner/investors find something that week in San Francisco that captures their interest, it could distract from your deal or ultimately end it.

If you have questions or would like to discuss how Locust Walk might be able to help you with a strategic transaction or fundraising, you can reach me at  As always, thanks for visiting us and reading our Insights.

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  Written by Michael McCully