Companies with a runway of six months or less need to take a stance of executing a transaction in distress M&A.
It's often difficult to see high-potential companies in this situation of very short runway, but there are not few cases of promising companies that misjudged this situation.
In this case, three principles must be kept in mind:
REALISM:
It doesn't matter how one got to this point, but rather what can be done now to preserve value. The quicker one recognizes the problem, even if it requires a new valuation paradigm, the more time will be available for finding a solution.
ALTERNATIVES:
Explore all strategic alternatives; do not dismiss an offer without having another in hand while keeping as many doors open for as long as possible. Be clear about whether there is a need to approach sequentially to avoid timing issues in negotiations. Avoid non-binding offers with exclusivity.
FOCUS:
Prioritize what truly matters and make assertive decisions quickly. Time is one of the most precious assets, and it is better to close a transaction with less-than-ideal terms than not to close at all.
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