Reading the Room: A Two-Track Diagnostic for the Exit You’re Actually Facing
Most African venture-backed companies are positioned for a buyer conversation they haven’t mapped — and a due diligence process they aren’t ready for
This piece assumes you’ve read Saturday’s essay. If you haven’t, start there. What follows is the operational version — the specific checks that determine whether your company is positioned for the buyer that’s arriving, or the one that isn’t coming.
The exit conversation most African founders and GPs are having starts with the wrong question. “Are we ready to exit?” is not the question that determines the outcome. The question that matters is: ready for which buyer, on whose terms, at what price?
Trade sales are the dominant exit route for African private capital — and two buyer classes now define that market. Each requires a different company. Most cap tables are built for neither — or built for the one that pays less.
Work through both tracks below against your current position. Be precise. Vague answers produce vague diagnoses — and vague diagnoses are how founders end up in a thirty-day exclusivity window discovering problems that should have been fixed eighteen months earlier.
Track One — PE Readiness
Private equity acquires to sell again. That single fact determines everything about what they need from you at due diligence. They are not buying your story. They are underwriting a financial model that has to work twice — once when they buy, once when they sell. Every item below is something a PE fund will verify before issuing a term sheet. If you can’t verify it yourself first, they will find it — and price the uncertainty into the offer.
Financials
Are your last three years of accounts audited by a recognised firm — not a local bookkeeper, an actual audit? Are those accounts segmented by revenue line, geography, and product, or presented as a single consolidated figure? Can you produce a trailing twelve-month P&L within five working days of being asked?
I’ve seen data rooms where management accounts were presented as a substitute for audited financials — sometimes with genuine confidence that the distinction wouldn’t matter. It always matters. PE funds model entry on audited segment financials. The due diligence process will either stall at that point or produce a price adjustment that reflects the uncertainty introduced. In the transactions I’ve seen move cleanly, the financials were audit-ready before the first conversation, not after the LOI.
