Happy New Year. I spent the break properly offline with my family. No panels. No decks. No pipeline calls. Somewhere between long walks and quiet mornings, a familiar instinct kicked back in. I am ready to engage again. Ready for real underwriting conversations. Ready for situations where conviction still has to be earned, not assumed.
What follows reflects how I have been thinking about readiness from the buy side, and why so many processes lose momentum long before price is ever the issue.
How conviction actually forms and why it decays
Transactions rarely break because of a single red flag. They stall because confidence erodes gradually.
Small frictions compound. Slow responses. Numbers that shift subtly between conversations. Ownership of answers that feels unclear. Each instance is interpreted as information. Over time, conviction weakens and risk is reintroduced into the price or, more often, into structure.
The implicit question being tested is constant
What will we discover later that we cannot price with confidence today?
The underwriting reality behind multiples
Multiples are shorthand. The real work is underwriting future cash flows adjusted for risk, durability, and controllability.
Value expands when cash flows are predictable, explainable, and resilient across scenarios. It compresses when they depend on fragile assumptions, heroic execution, or a narrow set of conditions.
When risk feels unresolved, it does not disappear. It migrates into earnouts, escrows, holdbacks, working capital mechanics, or tighter covenants.
What “ready” actually looks like
Readiness is not polish. It is transferability without interruption.
Conviction builds when a buyer can move from interest to underwriting without forced pauses. That requires
• Valuation expectations supported by verifiable evidence
• Questions answered quickly, consistently, and without rework or escalation
In practice, readiness shows up across five dimensions
• Performance clarity: stable definitions, defensible run rates, reconciled bridges
• Operational transferability: decision rights pushed down, documented processes, predictable governance
• Risk containment: key risks identified, quantified, and actively managed
• Data discipline: one source of truth, clean version control, current documentation
• A coherent equity story: consistent across materials, discussions, and diligence responses
Revenue quality over growth optics
Growth attracts attention. Fragile growth undermines confidence.
What matters is not just the rate, but how it is earned
• Concentration and renewal behavior
• Pricing power and churn dynamics
• Repeatability of pipeline conversion
• Dependency on individual customers, channels, or people
Two workstreams tend to anchor the underwriting
• A customer and revenue pack fully tied to the P&L
• A pipeline and forecast pack with objective stage definitions, historical conversion, and a documented forecasting method
Leadership dependency as a risk signal
Strong leadership is attractive. Operational dependency is not.
Confidence rises when it is clear that
• Decisions do not bottleneck at the top
• Customer relationships are institutional
• Reporting, pricing, approvals, and escalations are system-driven
This risk is not mitigated through reassurance. It is mitigated through observable behavior and evidence.
Diligence should confirm, not discover
When a clean fact base is missing, underwriting becomes conservative by default.
Preparation replaces narrative with proof
• Revenue reconciles cleanly from customer to P&L
• Gross margin methodology is stable and well-bridged
• KPI definitions do not drift mid-process
• Q&A is controlled, logged, and consistent
Data discipline is not administrative. It directly protects value and terms.
Why structure often matters more than price
Headline valuation rarely tells the full story. Structure determines what is realized, when, and with what residual risk.
When conviction is high, competition centers on price.
When it is fragile, it centers on risk transfer.
Earnouts, escrows, holdbacks, and extended indemnities are not aggressive tactics. They are symptoms of unresolved uncertainty. The only durable way to preserve leverage is to convert unknown risk into bounded, evidenced risk.
The simplest discipline that changes outcomes
Run a pre-mortem early.
Assume the process fails in the final weeks. Identify what broke conviction, define the evidence required to satisfy a skeptical underwriter, and address the highest-impact gaps first.
The strongest outcomes occur when readiness is treated as an operating priority
• Clear owners
• Weekly cadence
• Single source of truth
• Response standards where a slower right answer beats a fast wrong one
I’ll be on the road over the coming months, largely around conversations where investment and value creation intersect. If our paths happen to cross, even briefly, it would be good to connect.
• Jan 19–20: ICE Conference, Barcelona
• Jan 27–30: London
• March 9–11: Speaking at MoneyLIVE, London
• March 16–19: Speaking at Merchant Payment Ecosystem, Berlin
• Late April (likely): Zurich
• June: Money20/20 Amsterdam
If you are quietly underwriting a situation this year, or simply want to pressure-test readiness from an investor’s lens, I’m always open to a thoughtful conversation.
Tom C. Schapira
Founder and CEO
Imagine Capital Group
E: tom@imaginecapitalgroup.com
Website http://www.imaginecapitalgroup.com
