De-risking the future of a SaaS startup.
David's company, generating $2 million ARR, has attracted significant interest. He's torn between the potential for greater long-term growth with Series A funding versus the immediate payout of an acquisition. However, he lacks the financial tools to properly vet potential acquirers and ensure their long-term stability, a crucial factor in the earn-out structure of most acquisition deals. The risk of an acquirer's financial distress jeopardizing his future earnings is a major concern.
Using Golden Door Asset's Altman Z-Score Calculator, we analyze the financial health of three potential acquirers. One acquirer, initially offering a seemingly attractive deal, reveals a Z-Score indicating a high probability of financial distress. By identifying this risk early, David avoids a potentially devastating acquisition, instead pursuing a Series A that allows him to maintain control and further increase his company's value before a future, more secure, exit.
The Altman Z-Score Calculator provides a standardized measure, easily implemented using publicly available financial data. This quantitative analysis complements qualitative due diligence efforts.
$2.5 Million Potential Loss Avoided: Preventing a failed acquisition safeguards projected earn-out payments and future equity value.
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