Dealing with Investors who Want to Buy Your Business
Engaging Investor-Buyers: A Practical Guide for iGaming Owners
For most iGaming entrepreneurs, serious approaches from “outside investors” arrive only a handful of times in a company’s life-cycle. When they do, the way you handle the first exchange will colour everything that follows – from valuation discussions to the final wire transfer. Drawing on a decade of advising gaming studios, platform providers and affiliate networks, the guidance below will help you set the right tone, protect your data and keep leverage on your side.
Why investor enquiries deserve extra scrutiny
In mid-market iGaming, financial investors (family offices, private equity and UHNW individuals) account for roughly one in five completed deals, while strategic operators still drive the majority of M&A volume. In 2024 there were 198 gaming transactions worth US $10.5 billion; only 37 % were led by pure financial sponsors.
Because a fund or family office may be evaluating multiple verticals simultaneously—sports betting, casino content, esports—only a fraction of the enquiries you receive will convert into signed letters of intent (LOIs). Rigorous front-end screening saves weeks of data-room time and prevents sensitive player or affiliate information from circulating unnecessarily.
Investor Screening Checklist
| Item to verify | Why it matters | Typical red flags |
|---|---|---|
| Liquid capital available for closing (ask for figure + proof of funds) | Confirms your counterpart can cover cash at close, escrow and any regulatory capital requirements | Exhibits hesitancy in producing a recent bank or brokerage statement |
| Net worth (personal or fund level) | Ensures buyer can support earn-outs, working capital and potential licence bonds | Reliance on forward fund-raising or undisclosed co-investors |
| Prior gaming or highly regulated-sector deals | Demonstrates familiarity with licence transfers in Malta, the UK or US states | None—this is their “first gaming deal” and they “will hire lawyers later” |
| Regulatory posture (background checks completed?) | Regulators may run suitability probes on all >10 % shareholders; surprises delay completion | Investor unwilling to undergo probity checks or supply KYC documents |
| Decision-making structure | Identifies who must sign term-sheets and NDAs and clarifies timelines | “Our investment committee meets quarterly; we’ll revert in three months” |
Structuring the conversation
Insist on dual NDAs. Both the intermediary and the ultimate capital provider must execute the same confidentiality agreement. If the investor balks, treat it as a signal that they are not yet table-ready.
Verify claims early. Proof of funds or evidence of committed capital should arrive before you release the full data deck, not after. Otherwise any buyer can play the “I have an investor” card to bypass scrutiny.
Control the narrative. Provide a concise teaser, then escalate to a redacted CIM (Confidential Information Memorandum) only once NDAs are in place. Save granular KPI feeds (e.g., monthly GGR by jurisdiction) for the confirmatory stage.
Pros and Cons of Selling to a Financial Investor
Advantages
Financial sponsors often pay aggressive multiples for growth assets. Example: Betnacional’s majority stake attracted an estimated 18.4× EBITDA valuation in 2024, buoyed by Brazil’s forthcoming regulation. Investors may also accept minority positions, allowing founders to roll equity and de-risk without relinquishing full control.
Disadvantages
Funds usually demand detailed covenants and earn-outs tied to future performance. If the business stalls or a market licence is suspended, headline valuations can evaporate. Moreover, closing cannot occur until every regulator with look-through powers approves new ownership—a process that can stretch to nine months in multi-jurisdiction portfolios.
Frequently Asked Questions
Q: Do I need to disclose player data before we have an LOI?
A: No. Aggregate metrics (monthly active users, GGR, NGR, ARPPU) suffice at pre-LOI. Individual player IDs or KYC files should remain encrypted until confirmatory due diligence.
Q: How long does diligence typically take in iGaming?
A: For a €10-50 m revenue business, expect 60-90 days once legal diligence starts; regulators may add another 30-120 days for ownership approvals.
Q: What deal structures are common?
A: Cash-at-close plus a 12- to 36-month earn-out tied to EBITDA or NGR is the norm. Rollover equity—founders retaining 10-30 % in the new vehicle—is increasingly popular, giving you a “second bite of the apple” if the investor exits to a strategic later.
Q: Can an investor fund the purchase through debt?
A: Yes, but insist on visibility into lender term-sheets. Too much leverage can choke post-closing investment in new licences or product upgrades.
Q: What happens if regulators reject the buyer?
A: The SPA should include a “regulatory out” clause with reverse break-fee protection, so you are compensated if approval is denied for reasons outside your control.
Final Thoughts
Treat every self-described investor as a genuine buyer—because they are. By demanding dual NDAs, documented proof of capital and evidence of regulatory readiness, you position yourself as a sophisticated counter-party and preserve negotiating leverage. In a market where EBITDA multiples can fluctuate between 6× and 18× depending on jurisdiction, growth story and licence regime, disciplined screening is not bureaucracy; it is value protection.
