Based on the history following the dot.com bubble, the GFC and other market falls, we know that it is very common to see a sharp rebound in private equity activity. In other words, professional business buyers often become very active at times like these.
A recent survey conducted by SourceScrub of venture capital and private equity firms highlights two key factors:
- At the moment they are spending 39% of their time managing and protecting existing portfolios during COVID-19. As soon as this passes (the consensus estimate was for Q3 of this year) they will spend 36% of their time sourcing new deals and 28% of their time in executing those deals.
- 76% of respondents said that deal sourcing would be their top focus post-COVID-19 and 32% said they would be more aggressive in deploying capital compared with the period before the pandemic.
To maximise your potential during this time, you need to do two things well: explain the past and sell the future.
This means you should be taking a hard look at the business (with a buyers lens): review risk, performance, benchmarking and most importantly valuation. Our Business Insights report will help with all of these factors – knowing what the business is worth and why and how you can maximise valuation and prepare for a buyer.
The alternative is to wait for the ring and hope you can exit (not recommended!).
