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When building a model and underwriting an acquisition more broadly, many prospective acquirors understandably struggle with how to balance calculated optimism about the future on one hand, with a sense of what is realistically achievable on the other.

While investing is an inherently optimistic act (after all, you wouldn’t make the investment if you didn’t believe that the future was likely to be better than the present), acquirors must balance that optimism against the company’s historical performance, possible future headwinds outside of their control, and execution challenges common to first-time CEOs, among other considerations.

In today's episode, I present prospective acquirors with ten different ideas on how to underwrite a conservative and realistic base case.