Replies to post #12024 on Full Alliance Group Inc. (FAGI)

[poco_trabajo_mucho_dinero]

business 101:

How long does it take from the first meeting for an acquisition to close?

My first start-up as a co-founder: 14 months from first meeting (pre-incorporation) to acquisition.

My second start-up as a co-founder: 67 months from first meeting to acquisition.

n acquisition has multiple phases:

Term Sheet. This can usually be done in just a few days. We’re talking one or two pages that outline the broad strokes of the deal. It can be countered, and is non-binding.
Short Form agreement. This is a 10–20 page legal document going into greater detail on the deal: escrow provisions, disclosures etc.. Typically takes 1 month to close.
Final long form agreement. This can be a quite lengthly agreement and it will typically include retention agreements, employee contracts, escrow provisions, disclosures and a whole host of other items. This typically takes a minimum of 3 months to negotiate between all parties — and can drag on for as much as 9 months.
In between short form and long form there is an enormous amount of technical, legal and financial due diligence — especially if this is a true acquisition and not just an asset sale. The buyer is taking on potential legal liabilities of the seller (lawsuits, potential lawsuits etc, unpaid debts etc..) This cannot be rushed.
Closing signing. Once everything is all done, the lawyers prepare the closing documents. Typically all the investors at every round need to sign off, as well as all the executives of the selling party and legal representatives of the buying party
Once the signatures are all in, money is wired. Typically 1–2 days.
Escrow agreements usually take 1 year. A certain fraction of the deal amount (10–20%) is held in escrow to account for unforeseen events (new lawsuits, founder leaves for Venezuela etc..) .
It’s a long process. At minimum, 3–4 months till money hits the bank accounts and realistically, 6–9 months.

Generally speaking, if you are starting from scratch and following the Roadmap approach that I advocate, you should be able to close on your first acquisition within twelve to eighteen months. If you push any faster, it is unlikely that you will have time to do the necessary research and examine a sufficient volume of markets and prospects.

This is typically set away for 12-36 months