⇧ Appoint advisors

Well done for drafting the Term Sheet and here is an example:

Term-sheet-VSC

Now that you have accepted a preferred bidder, you need to determine which advisors to appoint. You will most likely need some experts to support you during the deal process and you may have already been working with a few advisors during the early stages of the fundraising process.

There are various advisors that you may wish to appoint, for example:

• Lawyers: Legal experts to help you with the written documents and to clarify the impact of each clause.
• Investment bankers: Supporting you throughout each stage of the deal process and saving you valuable time.
• Tax advisors: Determining the tax implications of the deal and how to structure it to deliver maximum benefit to you.
• Project manager: Providing you with project management support throughout the deal process.
• Accountants: Helping you understand the accounting impact of each element within your funding agreements.
• Negotiators: Professional negotiators who can help you to obtain the best deal terms.
• Technology providers: Specialist firms who provide deal-related software such as data room management tools.

Each deal will have its own unique set of circumstances based upon the structure of the deal and the nature of the parties involved.

Note that finance leaders will often line up advisors at the very beginning of the fundraising process to support you through the initiation, negotiation and execution of the deal.

This allows you to build relationships with them early on and leverage their specialist knowledge. It helps to select your shortlist of preferred suppliers before any deal process kicks off.

⇧ Action required

Write down your answers to the following questions:

1. Which advisors would you use for this fundraise?
2. When would you appoint each one?
3. What would you ask each of them to help you with?
4. How much would you be prepared to pay for each advisor?
5. List any existing relationships that you already have with each type of advisor to identify gaps in your network.

There is no right or wrong answer to the above and you will need to agree on these answers with your company.