Selling my regional taco truck chain (don't laugh, it's 6 figures EBITDA) and I'm getting a lot of interest. But I'm wondering: do you guys ask for proof of funds upfront during the first screening? I don't want to waste time with tire-kickers, but I also don't want to scare off legit buyers by being too aggressive too early. What's the norm here?
Deal Vetting
Do you ask for proof of funds during the first screening?
Yeah we do. First phone call, no POF = no NDA. Simple as that. Not handing over my P&L to some guy who might just be a competito poking around.
I've sold two businesses and bought one. Hated being asked for POF before I even saw the CIM. Felt like I had to basically prove I was 'worthy' of a conversation. That said, I get why sellers are paranoid about competitors.
Taco truck chain. Six figures EBITDA. You're gonna need a proof of appetite, not funds. 😂 But seriously—just ask for a bank letter or statement screenshot. Takes 30 seconds for a real buyer.
I ask for POF at the second phone call. First call is vibes. If they're still interested after hearing the general pitch, they can send a statement.
Second call is more reasonable. But a screenshot? Easy to fake. Bank letter or nothing. And honestly, if a buyer balks at that, they're either broke or a tire-kicker.
No. I use a broker. He vets them. I just show up to the closing table.
Sellers always say 'don't waste my time' but then get weird when you ask for basic diligence. POF is a two-way street. If you won't trust a signed NDA and call, why should I trust your numbers
Because my numbers are audited. Your 'proof of funds' can be a screenshot from Monopoly. Not the same thing.
Ugh, this debate again. Just put 'POF required before CIM' in the teaser. Saves everyone the headache.
Alright, seems like the split is about timing—first call vs later. I'll probably ask for a bank letter after the first call and see how it goes. Appreciate the input, even the taco joke.