In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by Baton Market.

Stop Wasting Months Chasing Deals

Most SMB searches drag on for 12+ months
chasing brokers, signing NDAs, and only seeing the real numbers too late

With Baton, you get:

• Instant access to financials

• One NDA for the entire platform

• Standardized deals you can actually compare

• Owner interviews and real operating context

Cut your search time in half
(12 months → ~5.5 months)

Browse vetted deals on Baton →

📰 Articles

I summarize, so you capitalize.

Prairie Middle Market Perspective Spring 2026

Prairie Capital’s Spring 2026 market update says lower middle-market M&A remains active but disciplined. Deal volume is still below historic highs, yet strong businesses continue to attract buyers, resilient valuations, and available financing. The central takeaway: sellers can achieve strong outcomes, but preparation and quality matter more than ever.

Key insights from the report:

• Market Still Moving – Overall transaction activity remains measured, but aggregate deal value has improved as larger deals return. Buyer demand remains strong for attractive lower middle-market companies.

• Quality Wins Premiums – Businesses with recurring revenue, scale, strong margins, and clear growth opportunities continue to command higher valuations, while weaker or riskier assets face more selective buyer interest.

• Private Equity Demand – PE firms still hold significant dry powder and face pressure to deploy capital and generate exits. That is sustaining competition for well-positioned businesses.

• Financing Available – Banks and private credit lenders remain active, though debt structures are more conservative than the borrower-friendly market of 2021. Stronger companies receive better leverage and terms.

• Preparation Is Critical – Buyers are heavily focused on diligence, including earnings quality, customer concentration, tariff exposure, management depth, and reporting quality. Well-prepared sellers running organized processes are seeing the best outcomes.

— — — — — — — — — — — —

Most Effective Cold Outreach Message

A Searchfunder discussion on cold outreach suggests there is no single “best” message, but the most effective approaches are direct, personalized, and concise. Searchers and operators largely agreed that owners ignore generic templates, while authentic outreach that shows research and respect performs better.

Key insights from the discussion:

• Be Direct – Many commenters said owners are busy and prefer clear intent. Stating upfront that you’re interested in buying or discussing succession often works better than vague networking messages.

• Personalization Matters – Referencing something specific about the business—reputation, growth, reviews, niche, or history—helps prove the message is genuine and not mass outreach.

• Keep It Short – Several users recommended brief messages with three parts: who you are, why their company stood out, and a low-pressure request to connect. Too many words reduce response rates.

• Channel Depends on Owner Type – LinkedIn worked better for some because owners can verify credibility quickly, while others said direct mail or phone calls outperform email for older or smaller business owners.

• Test and Iterate – Contributors recommended A/B testing messaging, tracking response rates, and refining outreach over time. Success is often a numbers game where relevance and persistence matter more than one perfect script.

— — — — — — — — — — — —

Strategic Equity Partners: Expertise vs. Governance Friction

Offit Kurman’s article argues that adding a strategic equity partner to ETA, search fund, or independent sponsor deals can improve credibility, capital access, and execution support—but often creates governance friction if introduced late in the process. The core message: strategic partners can help close deals, but poorly designed control rights can slow post-close execution and weaken returns.

Key insights from the article:

• Strategic Partners Add Value—but at a Cost – Additional investors may bring expertise, lender confidence, and capital, increasing certainty of close. However, they also introduce another layer of approvals and decision-makers.

• Governance Friction Hurts Execution – Consent rights, board approvals, and reserved matters can delay routine decisions like hiring, budgeting, refinancing, or acquisitions. That friction often becomes most visible in the first 100 days after closing.

• Roll-Ups Are Most Sensitive – In acquisition platforms where speed and repeatability drive returns, even modest governance drag can reduce competitiveness on add-ons and slow momentum.

• Deadlock Terms Matter – Buy-sell clauses, forced sales, put/call rights, or redemption provisions may resolve disputes but can become financially painful if triggered during stress periods.

• Structure for Speed Early – The article recommends aligning board control, approval thresholds, leverage capacity, and management authority with the operating model before close. Oversight should protect investors without impairing execution.

🧵 Online Highlights

I scroll, so you don’t have to.

Hidden payroll tax exposure, multi-state nexus, and trust fund penalties are the quiet killers in small-business diligence…

A MedSpa roll-up is seeking DIP capital to prime out a bank that wants an exit. May be of interest to some readers…

Cold email for M&A is now 80% infrastructure and 20% craft — and most buyers still get the infrastructure wrong….

The 2024 boom pulled demand forward and masked operational weakness that is now fully visible. John offers a good read on what’s happening in the trades…

Employee compensation is the most leveraged post-close decision operators rarely discuss in depth…

P&L mechanics can be taught in a few days; ownership mentality and follow-through cannot…

🗓️ Events

• SMBash 2026 (Apr 22-24) - Dallas, TX

• M&A Launchpad Conference (May 2) - Houston, TX

• ACG Private Equity Two-Step (May 5) - San Antonio, TX

• Southeast ETA Conference (Sept 18-19) - Durham, NC

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🤔 Other - Baton Market, SBA Loan Intelligence

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by Baton Market.

Stop Wasting Months Chasing Deals

Most SMB searches drag on for 12+ months
chasing brokers, signing NDAs, and only seeing the real numbers too late

With Baton, you get:

• Instant access to financials

• One NDA for the entire platform

• Standardized deals you can actually compare

• Owner interviews and real operating context

Cut your search time in half
(12 months → ~5.5 months)

👉 Browse vetted deals on Baton

📰 Articles

I summarize, so you capitalize.

Small Business Exits: Deal Data From 292 Recently Closed Transactions

This report from Axial breaks down 292 closed small business transactions from Q1 2026, showing how deal size, buyer demand, and industry dynamics are playing out in the lower middle market. It highlights where buyer competition is strongest, how processes are being run, and what types of businesses are attracting attention.

Key insights from the data:

What to Buy

This data clearly favors businesses with predictable revenue, fragmentation, and scalability.

• Recurring Revenue Models – SaaS, telehealth, and education platforms stand out due to subscription revenue, low churn, and operational leverage.

• Fragmented Home Services – Roofing, pool services, HVAC, and contractors consistently attract high buyer interest due to roll-up potential and steady demand.

• B2B Essential Services – Accounting, consulting, and maintenance businesses perform well because they’re sticky and less cyclical.

• Niche Industrial Plays – Specialized contractors and distributors (e.g., structural, electrical) show strong EBITDA and buyer competition when they have defensible positioning.

• Asset-Light Operators – Businesses with lean teams and strong margins (vs. heavy inventory or equipment needs) tend to draw more buyers.

What to Be Careful With

Not “avoid completely,” but these require tighter underwriting.

• Low-Margin, High-Revenue Businesses – Some large revenue deals (e.g., distribution, transportation) show surprisingly thin margins → risk of overpaying on top-line.

• Capex-Heavy Models – Vehicle dealers, equipment businesses, and certain industrials may look stable but require constant reinvestment.

• Owner-Dependent Operations – Many deals are being sold due to retirement; if knowledge transfer is weak, risk is high.

• Highly Competitive Consumer Plays – Retail or non-differentiated consumer businesses show mixed buyer interest and less consistency.

• Deals with Massive Buyer Interest – Counterintuitive, but highly shopped deals (hundreds of buyers) can lead to price inflation and tougher execution.

How to Win Deals (Based on This Market)

This is where the report is most useful if you’re actually trying to acquire.

• Move Early, Not Broad – Competitive deals get crowded fast; targeted outreach and quick conviction matter more than seeing everything.

• Lean Into Proprietary / Limited Processes – Some of the most successful deals had restricted buyer groups, improving close rates.

• Underwrite for Diligence Risk – Many deals fall apart late; build in buffers for retrades, quality of earnings issues, and operational gaps.

• Be Flexible on Structure – Sellers often want partial exits, rollovers, or transition periods—rigid offers lose deals.

• Differentiate Beyond Price – Certainty, speed, and seller alignment can beat higher bids in a market where many LOIs fail.

• Focus on Operational Upside – Buyers are clearly targeting businesses where growth can be accelerated post-close (not just stable cash flow).

Browse Vetted Deals on Baton

🧵 Online Highlights

I scroll, so you don’t have to.

The case for bearishness on franchises: the operating system moat is gone, and only the brand remains…

Search, independent sponsor, and serial acquirer look alike on a deal sheet — the games being played aren't the same…

Buying buys speed and working capital; building buys optionality on industry, geography, and exit multiple…

Nine AI deployments already running on manufacturing floors — from 60-second quoting to on-prem ITAR document search…

The realistic acquisition arc: 30 days of quick wins, three months of firefighting, then six months of real strategy.…

🤔 Other

Baton: A Better Small Business Marketplace

Our new sponsor - Baton makes buying a small business transparent and straightforward.

Here’s what you get:

• Verified listings with real financials upfront: Browse verified first-party financials, owner video interviews, and our proprietary valuation in any deal’s Data Room.

• One NDA, unlimited access: Sign once when you join. A single 2–5 minute NDA gets you under the hood of every verified listing on the platform.

• High-quality, consistent listings: Every listing meets the same rigorous standards, so you can focus on finding the right deal instead of filtering out the noise.

• Advisors who actually move deals forward — Advisors help you navigate analysis, financing conversations, diligence, and closing without sky-high fees.

Baton is regularly mentioned in acquisition entrepreneur communities alongside tools like Searchfunder as a legitimate source for vetted deal flow at a lower cost than traditional brokers. Buyers on Trustpilot back this up. One noted that Baton’s data rooms were well-organized with financials actually present (a bar many brokers fail to clear) and that communications throughout were timely and professional. Another put it simply: “Wish I knew about Baton Market sooner.”

With deals across all 50 states and a 70% close rate, there’s real inventory and real momentum here.

Stop chasing brokers for basic info.

👉 Find your next deal at baton.com

— — — — — — — — — — — —

SBA Loan Intelligence (2.1M+ Loans Mapped)

I recently came across a tool from Mazeka Labs that’s worth a look.

There’s a gap between how people talk about SBA loans and how they’re actually deployed. This tool helps close it.

They’ve visualized 2M+ SBA loans going back to 1992, turning what’s usually buried in spreadsheets into something you can explore in a few clicks.

What makes this interesting isn’t just the data, it’s what it reveals:

• Certain industries get funded far more consistently than others

• Lending activity is heavily concentrated in specific geographies

• Loan sizes cluster in ways that don’t always match buyer expectations

• Some lenders show clear patterns in the deals they back

For buyers, this is a useful reality check. If your target market or industry doesn’t show much lending activity, that’s worth understanding early.

Capital isn’t evenly distributed. That matters more than most people think.

Here’s the free tool → SBA Loan Intelligence

🗓️ Events

• SMBash 2026 (Apr 22-24) - Dallas, TX

• M&A Launchpad Conference (May 2) - Houston, TX

• ACG Private Equity Two-Step (May 5) - San Antonio, TX

• Southeast ETA Conference (Sept 18-19) - Durham, NC

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

How Trump’s SBA Quietly Pulled The Rug On Small Business Investors

The Forbes article explains how the SBA may have quietly changed how it treats investors in its flagship 7(a) loan program, creating unexpected and retroactive risks for anyone involved in small business acquisitions. The shift—poorly communicated and inconsistently applied—could significantly disrupt the ecosystem of buyers, lenders, and passive investors who rely on SBA financing.

Key takeaways:

• Expanded Liability – The SBA now appears to treat all owners (including passive minority investors) as equally responsible for loan failures, not just the primary borrower.

• Retroactive Risk – Investors may be penalized for past deals under rules that didn’t exist at the time, potentially blocking future access to SBA, FHA, or VA loans.

• Deal Disruptions – Transactions are being flagged or stalled if any investor has a history of delinquency, creating a new and unpredictable failure point.

• Lack of Guidance – The SBA has not clarified whether this is an intentional policy change or a system issue, leaving lenders and investors guessing and acting conservatively.

• Chilling Effect on Capital – Passive investors—often friends, family, or small funds—may avoid SBA-backed deals entirely, reducing deal flow and access to capital in the small business market.

— — — — — — — — — — — —

The SMB M&A Pipeline: Q1 2026

The report provides a data-driven snapshot of SMB M&A activity on Axial’s platform in Q1 2026, focusing on deal volume and early-stage buyer interest (“pursuit rates”). While overall deal flow remained stable year-over-year, sector-level shifts reveal growing selectivity among buyers and uneven alignment between supply and demand.

Key insights:

• Stable Deal Volume – 3,047 deals came to market, essentially flat vs. Q1 2025, with growth concentrated in Transportation and Business Services.

• Sector Divergence – Industrials continues to lead in both volume and buyer interest, while Consumer Goods and Healthcare saw notable declines in new deals.

• Buyer Selectivity – High-supply sectors like Food & Hospitality and Consumer Goods show weaker pursuit rates, signaling caution around margin pressure and demand volatility.

• Demand for “Quality” Sectors – Technology and Healthcare attract disproportionately strong buyer interest relative to deal volume, reflecting preference for growth and defensibility.

• Pipeline Signal – Pursuit rates highlight early funnel dynamics, suggesting that while listings remain steady, buyer behavior is becoming more discriminating across industries.

Note: The chart below highlights historical deal activity on Axial and aligns with data from the BizBuySell quarterly insights report. Despite the narrative, there is no evidence of a “silver tsunami” and never has been…

🧵 Online Highlights

I scroll, so you don’t have to.

Sales ability predicts search success, capital raises, and ownership outcomes more than any other single trait…

Small business buying may have already passed its peak popularity moment, and most participants haven't noticed yet…

The SBA lending boom of 2020–2023 may have seeded a default cycle that hasn't peaked yet…

Closing the deal is the easy part — managing five or six competing capital obligations afterward is where most operators get caught off guard…

Private equity isn't just buying businesses anymore — it's quietly becoming the capital infrastructure behind every asset-heavy industry…

🗓️ Events

• Community Development Investors (Apr 10) - Washington D.C.

• LBS ETA Conference (Apr 9-10) - London, UK

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

• M&A Launchpad Conference (May 2) - Houston, TX

• ACG Private Equity Two-Step (May 5) - San Antonio, TX

• Southeast ETA Conference (Sept 18-19) - Durham, NC

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

2026 Lower Middle Market M&A Outlook: Valuations, Deal Activity & Market Trends

The updated report from Axial outlines a cautiously improving outlook for lower middle market M&A in 2026, following a volatile 2025 marked by valuation gaps and macro uncertainty. While capital remains abundant and seller activity is increasing, successful deal execution will hinge on valuation alignment and disciplined underwriting.

Key insights from the report:

• Valuation Gaps Persist – The top reason deals failed in 2025 was misaligned valuation expectations (28.3%), followed by diligence issues and macro uncertainty, highlighting continued friction between buyers and sellers.

• Improving Deal Sentiment – Investors are more optimistic heading into 2026, with over 30% expecting easier deal execution and far fewer anticipating worsening conditions compared to mid-2025.

• Capital Deployment Challenges Shift – Limited deal flow remains the top constraint, but concerns around operational risk and macro factors are rising, signaling more selective and disciplined investing.

• Seller Activity Rising, but Cautious – Advisors expect more engagements and note increased seller participation, though most sellers remain “opportunistic but cautious,” often pausing deals rather than abandoning them.

• Stable Valuations, Competitive Pressure – Most expect valuation multiples to hold steady in 2026, with strong buyer competition supporting prices while macro uncertainty and business performance apply downward pressure.

— — — — — — — — — — — —

What Is Search Fund D&O Insurance

This article is clearly an advertisement but nonetheless, it does offer some good insights on how D&O insurance is tailored specifically for search funds, addressing the unique risks faced by entrepreneurs, investors, and board members during acquisition and operation. It highlights why standard policies may fall short and how specialized coverage protects against legal and financial exposure.

Key insights from the content:

• Search Fund Risk Profile – Search funds face distinct risks across phases (fundraising, acquisition, operation), requiring D&O coverage that adapts to evolving liabilities.

• Coverage Gaps in Standard Policies – Traditional D&O insurance often doesn’t fully address search fund structures, leaving potential exposure for founders and investors.

• Protection for Key Stakeholders – Policies are designed to cover searchers, board members, and investors against claims related to mismanagement, fiduciary duties, and governance decisions.

• Importance During Acquisition Phase – The acquisition stage carries heightened legal and financial risk, making tailored D&O coverage especially critical at this point.

• Specialized Underwriting Matters – Working with providers experienced in search funds ensures proper structuring of policies, limits, and exclusions aligned with real-world deal dynamics.

🧵 Online Highlights

I scroll, so you don’t have to.

Route density, urgent jobs, and repeat customers make septic a strong operator-driven cash flow play…

The complexity most buyers avoid is exactly what creates long-term competitive moats in industrial businesses…

Small liabilities don’t stay small—missed diligence on “non-core” segments can sink an entire deal…

Good discussion on a lost deal. In crowded “boring” industries, discipline on EBITDA quality matters more than winning the deal…

🗓️ Events

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2-3) - Philadelphia, PA

• Community Development Investors (Apr 10) - Washington D.C.

• LBS ETA Conference (Apr 9-10) - London, UK

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

• M&A Launchpad Conference (May 2) - Houston, TX

• Southeast ETA Conference (Sept 18-19) - Durham, NC

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Traditional Search vs. Self-Funded Search: The Real Economics in 2026

The article explains how traditional search funds and self-funded search differ economically in 2026, focusing on ownership, risk, and return outcomes for entrepreneurs. It highlights that while traditional search offers structured support and lower personal risk, self-funded search can deliver significantly higher upside if executed well.

Key insights from the discussion:

• Ownership & Dilution – Traditional searchers often end up with ~20–30% ownership after investor dilution, whereas self-funded searchers can retain 70–90%, dramatically impacting long-term wealth.

• Risk Profile – Traditional search provides a salary and investor backing, reducing personal financial risk; self-funded searchers bear more upfront risk but maintain control.

• Return Potential – Despite lower risk, traditional search outcomes are capped by equity splits, while self-funded deals can generate outsized returns due to higher ownership.

• Capital Constraints – Self-funded searchers must be creative with deal structuring (e.g., SBA loans, seller financing), while traditional searchers have easier access to institutional capital.

• Market Shift (2026) – Increasing competition and higher acquisition multiples are making traditional search less attractive, pushing more entrepreneurs toward self-funded paths.

— — — — — — — — — — — —

Monthly Targets for CIM, Broker Calls, Seller Calls, LOIs, etc.?

The discussion on Searchfunder centers on how searchers should think about deal funnel metrics (CIMs, calls, LOIs). Most participants argue there’s no universal “right” number—emphasizing that search success depends more on time invested, quality of evaluation, and adaptability than rigid KPIs.

Key insights from the discussion:

• No Universal KPIs – Many argue fixed monthly targets are misleading since deal flow and responses from brokers/sellers are outside your control.

• Time Over Targets – Several searchers prioritize dedicating consistent time and effort rather than hitting arbitrary numeric goals.

• Quality vs Quantity – Focusing on high-quality opportunities and thoughtful diligence is more valuable than maximizing volume.

• Benchmarks Vary Widely – Some examples shared: ~25–30 CIMs/month, 1–3% LOI rate, ~1% close rate, or high-volume outreach (100–150 companies/week), but all depend on strategy and market.

• Adaptive Approach – Targets should be flexible and used as feedback loops—helping identify when to expand criteria, improve sourcing, or adjust strategy.

— — — — — — — — — — — —

Will we start to see a decline in the number of traditional searches?

The discussion on Searchfunder explores whether traditional search funds are declining as newer models (HoldCos and committed capital vehicles) gain traction. Contributors broadly agree the ETA landscape is evolving, with more competition, structural shifts, and pressure on the traditional model to adapt.

Key insights from the discussion:

• Shift Toward HoldCos & CCVs – Many investors are seeing increased adoption of committed capital and HoldCo structures, offering more flexibility and long-term compounding vs one-deal search models.

• Pressure on Traditional Search – Competition from PE, independent sponsors, and new entrants is squeezing traditional search, especially in target deal size and quality.

• Model Limitations – Criticism includes rigid economics (e.g., fixed ~25% equity), investor behavior, and misaligned incentives that may push top talent toward alternative structures.

• Market Maturation – Growth in ETA has increased competition, lowered returns in some cases, and raised the bar for searchers (clear thesis + “right to win” now critical).

• Not a Decline, but Evolution – While traditional search may decrease from peak levels, most believe it won’t disappear—rather, it will coexist with and adapt to newer models globally.

🧵 Online Highlights

I scroll, so you don’t have to.

If the SBA is applying default penalties to passive investors, outside equity in search deals just got a lot more expensive to raise…

Multiples are rising even in the micro market as PE dry powder flows further downstream than most searchers expected…

The real operator dependency risk isn't the owner leaving; it's the GM who stays and resents you for showing up…

Sellers price on add-backs, buyers underwrite on reality, and banks lend on something lower than both…

The hidden downside of subscale acquisitions: same workload, fewer resources…

🗓️ Events

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2-3) - Philadelphia, PA

• Community Development Investors (Apr 10) - Washington D.C.

• LBS ETA Conference (Apr 9-10) - London, UK

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

• M&A Launchpad Conference (May 2) - Houston, TX

• Southeast ETA Conference (Sept 18-19) - Durham, NC

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Actionable Search Tactics at BYU’s 2026 SMB Conference

The article recaps a panel at BYU’s 2026 SMB | ETA Conference where experienced searchers shared practical tactics for sourcing, evaluating, and acquiring small businesses. Speakers discussed how to build deal flow, establish credibility with brokers and sellers, and manage risks while searching for acquisition opportunities.

Key insights from the discussion:

• Education Before Outreach – Successful searchers study acquisition strategies through books, podcasts, and conferences before contacting brokers or sellers so they can engage as credible, informed buyers.

• Broker Relationships Matter – Building trust with brokers helps buyers stand out among hundreds of inquiries for attractive listings and increases the chance of seeing deals early.

• Cold Outreach for Proprietary Deals – Directly contacting business owners using personalized outreach can uncover off-market opportunities and improve deal flow beyond brokered listings.

• Flexible Search Criteria – Being industry-agnostic and avoiding overly narrow filters (industry, size, geography) keeps pipelines full and exposes searchers to more viable opportunities.

• Systems & Risk Management – Using CRMs to track conversations, maintaining a low burn rate, and preparing for SBA loans or personal guarantees helps searchers stay organized and financially prepared during acquisitions.

— — — — — — — — — — — —

Fundraising Without A Track Record: How New PE Funds Can Find Their First Limited Partners

The article explains how first-time private equity funds can successfully raise capital despite lacking a formal track record. Instead of targeting every investor, emerging managers should focus on investor types most receptive to new funds and build credibility through relationships, specialization, and strong governance.

Key insights from the discussion:

• Target the Right Investors – Successful fundraising comes from focusing on investor segments most open to emerging managers rather than broadly approaching every potential limited partner.

• Family Offices as Early Backers – Family offices are often accessible for new funds because they value relationships, flexibility, and unique deal access, and may participate through co-investments or SPVs.

• Private Investors for Early Capital – High-net-worth individuals can move quickly and accept flexible structures, though their check sizes are usually smaller than institutional investors.

• Institutional Investors Require Patience – Pension funds, endowments, and insurers rarely invest in first-time funds immediately; instead, they observe managers for years to assess governance, discipline, and risk management.

• Credibility Drivers – Even without a fund track record, managers can attract LPs by demonstrating differentiated strategy, proprietary deal flow, strong governance, meaningful GP commitment, and consistent communication during the fundraising process.

— — — — — — — — — — — —

A Guide To The 6 Archetypes Of Acquirers

The piece argues that not all acquisitive companies should be lumped together as “roll-ups.” Instead, it offers a practical framework of six acquirer archetypes, each defined by different capital structures, ownership goals, operating models, and exit expectations.

Key insights from the discussion:

• Why the Distinction Matters – Companies that all make frequent acquisitions may look similar on the surface, but their underlying logic differs in critical ways such as time horizon, investor expectations, integration model, and value-creation strategy.

• Six Archetypes – The framework breaks acquirers into six groups: holding companies, niche acquirers, roll-ups, buyout funds, strategic acquirers, and independent sponsors, each with a distinct approach to M&A.

• Hold vs. Exit – One of the biggest dividing lines is whether the business is built to own companies indefinitely or to eventually sell them, with permanent-capital models looking very different from PE-style, time-bound structures.

• Integration vs. Autonomy – Some acquirers preserve subsidiary independence and focus mainly on capital allocation, while others rely on integration, synergies, and operational change to create value.

• Use as a Strategy Tool – The taxonomy is less about labeling firms perfectly and more about helping builders ask the right questions about where capital comes from, what it expects, who operates the business, and how value will ultimately be realized.

🧵 Online Highlights

I scroll, so you don’t have to.

A practical 24-month roadmap for new independent sponsors and ETA buyers — from building credibility to getting to LOI…

Most new owners are caught off guard by the first year revenue decline. The three reasons are predictable and almost always the same…

The most compelling AI use cases in SMBs aren't coming from consultants — they're coming from owners who just started building…

Most SBA deals fail the same basic checks: leverage, equity, customer concentration, and transferability…

$3.4T in small business value will change hands by 2035. The opportunity is bigger—and more industry-specific—than most buyers realize….

Customer concentration isn't always a dealbreaker — but for first-time buyers using SBA financing, it can turn a good business into a bad deal…

Personally, I would use Claude for this type of workflow…

🗓️ Events

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2-3) - Philadelphia, PA

• Community Development Investors (Apr 10) - Washington D.C.

• LBS ETA Conference (Apr 9-10) - London, UK

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

• M&A Launchpad Conference (May 2) - Houston, TX

• Southeast ETA Conference (Sept 18-19) - Durham, NC

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

The Great Ownership Transfer: A new era of business stewardship

Millions of baby boomer business owners are approaching retirement, triggering what McKinsey calls the “Great Ownership Transfer.” Over the next decade, this demographic shift will determine whether millions of small businesses close or transition to new owners—an outcome that will significantly affect jobs, wealth creation, and local economies.

Key insights from the report:

• Massive Ownership Shift – By 2035, roughly 6 million U.S. small and midsize businesses will face ownership transitions, representing up to $5 trillion in enterprise value. How these transitions are handled will shape the future of local economies and employment.

• Small Businesses Are Economically Critical – SMBs make up 99% of U.S. companies, employ over 60 million people (nearly half the workforce), and generate about 35% of business revenue, making their continuity vital for economic stability.

• Closures Outnumber Transfers – Most small-business exits today happen through closure rather than sale or succession, meaning many viable companies disappear instead of transitioning to new owners. This risks job losses, disrupted supply chains, and weakened local communities.

• Uneven Impact Across Regions and Demographics – Rural areas and underrepresented groups face greater risk due to limited access to capital and acquisition networks. Under current trends, only 28% of transferred business value will go to women and Black or Latino owners.

• Opportunity for Wealth Creation – Expanding access to business ownership—through financing, buyer preparation, and models like employee ownership—could preserve up to 12 million jobs and unlock $2–3 trillion in new household wealth while strengthening local economies.

Key implications for search funds, ETA buyers, and investors:

• Massive Deal Supply – With millions of owners retiring, the supply of businesses seeking succession will far exceed the number of prepared buyers. This imbalance creates strong opportunities for acquisition entrepreneurs and search funds to buy stable, cash-flowing companies.

• Fragmented, Off-Market Opportunities – Many retiring owners are not working with brokers or investment bankers. Successful buyers will need proactive sourcing—direct outreach, local networks, and relationship building—to find deals before they hit formal marketplaces.

• Operational Succession Is the Hard Part – Unlike traditional PE deals, many small businesses rely heavily on the founder’s relationships and tacit knowledge. Buyers who can implement systems, retain key employees, and professionalize operations will capture the most value.

• Creative Financing Will Be Key – Transactions will often rely on combinations of seller financing, SBA loans, minority equity investors, and employee ownership structures because many buyers lack large amounts of upfront capital.

• Wealth Creation Through Ownership – For first-time operators, ETA buyers, and underrepresented entrepreneurs, acquiring an existing business can be a faster and less risky path to wealth creation than starting a company from scratch.

— — — — — — — — — — — —

Are Search Funds Moving Up Market?

The article from Mineola Search Partners examines whether traditional search funds are beginning to target larger companies than in the past. While data shows average deal sizes increasing, the shift is driven less by strategy changes and more by market forces like rising competition, higher valuations, and increased capital availability.

Key insights from the analysis:

• Rising Deal Size – Median enterprise values for search fund acquisitions have increased significantly over the past decade, reflecting both inflation in valuations and a gradual shift toward larger businesses.

• More Capital in the Ecosystem – The growth of search fund investors, funds, and institutional backers has increased the amount of capital available to searchers, enabling them to pursue larger acquisitions than earlier cohorts.

• Competition for Quality Businesses – As more searchers enter the market, competition for attractive small businesses has intensified, pushing many buyers to look slightly up-market where there may be fewer competitors.

• Financing Enables Bigger Deals – Greater familiarity with SBA loans, mezzanine capital, and equity syndicates allows searchers to structure acquisitions with larger enterprise values than historically typical.

• Not a Full Strategic Shift – Despite the upward movement in deal size, most searchers are still targeting small to lower-middle-market companies; the increase is more of a gradual scaling effect than a fundamental change in the search fund model.

— — — — — — — — — — — —

2026 State of the Industry Report

Empire Flippers argues that the digital M&A market is stabilizing after several volatile years shaped by AI disruption, tighter financing, changing buyer behavior, and the collapse of past valuation bubbles. The report’s core message is that deals are still getting done, but buyers are more selective, valuations have normalized, and businesses with stronger moats, stable cash flow, and better deal flexibility are winning.

Key insights from the report:

• Market Normalization – Transaction volume rose in 2025, but average listing multiples, sale multiples, and listing prices declined, signaling a return to more traditional valuation ranges rather than a market crash.

• Buyer Profile Shift – Buyers are described as more conservative and structure-focused, with growing interest in “full funnel” businesses like DTC ecommerce and agencies where operators control more of the customer journey and depend less on platforms like Amazon or Google.

• AI Reshaping Business Models – The report argues AI has weakened content sites, is starting to threaten smaller SaaS businesses by reducing software-building barriers, and is inflating AI-company valuations in ways that may prove unsustainable.

• Deal Structure Matters – Seller financing and earnouts remain common, especially for larger deals, and the report claims sellers who accept flexible structures often achieve somewhat higher valuations than those demanding all-cash offers.

• What’s Selling Now – Amazon FBA remained the largest share of deals, while content sites lost appeal and DTC ecommerce, YouTube channels, and service businesses gained relevance due to stronger control, diversification potential, or AI-driven margin expansion.

🧵 Online Highlights

I scroll, so you don’t have to.

The quick balance sheet check that reveals whether EBITDA is real…

A simple example of operating leverage every small business owner should understand…

Partial ownership deals under SBA: the rules lenders actually underwrite to…

One cross-border play: acquire internationally, integrate in the U.S., exit at a higher valuation…

🗓️ Events

• Babson ETA Conference (Mar 6) - Boston, MA

• BYU ETA/SMB Conference (Mar 6) - Provo, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• evolutiq Search Fund Day (Mar 12) - Ehrenfeld, DE

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Almost bought a €45k SaaS. Dodged a bullet by asking one question.

A founder shared how he nearly wired €45k to acquire a small SaaS with €3.2k MRR and 180 users—until a simple request to review the code changed everything. After gaining GitHub access, he found messy, AI-generated “spaghetti” code, hardcoded API keys, and no tests, prompting him to walk away. The thread sparked debate over whether code quality or revenue matters more when buying a SaaS.

Key takeaways from the discussion:

• Technical Due Diligence – A short architecture walkthrough can quickly reveal whether a founder truly understands the system or is masking fragile code.

• Hidden Legal Risk – Hardcoded API keys, missing GDPR features, and security flaws create compliance exposure that can’t be easily undone after acquisition.

• Revenue vs. Code Debate – Some argued that demand and MRR matter most since code can be rewritten; others stressed that poor foundations create costly rewrites and churn risk.

• AI-Generated Code Concerns – Several commenters suspected the app (and even the post) was AI-generated, highlighting skepticism around “vibe-coded” SaaS products.

• Acquisition Strategy Split – Buyers differ: some purchase for users and plan a rebuild, while others require maintainable, scalable infrastructure before closing.

DueDilio Note:

We’re seeing more of these “vibe-coded” SaaS projects hit the market after gaining early traction. While revenue and user growth may look attractive, these deals require heightened technical and legal due diligence. Poor architecture, hardcoded credentials, missing compliance features, and lack of testing can create significant post-acquisition risk.

For AI-generated or lightly engineered projects, we recommend:

• Independent technical code review

• Security and compliance audit

• Verification of revenue via direct integrations (e.g., Stripe API)

• Clear rebuild cost and migration risk assessment

• Founder walkthrough of key systems and data flows

Traction is valuable — but only if the underlying system can support and sustain it.

🧵 Online Highlights

I scroll, so you don’t have to.

I’m seeing this play out in my own friend group. More and more people are turning to franchising as an off-ramp…

“Almost closed” and “hands-off owner” aren’t positives. They’re often cover for weak fundamentals…

As traditional PE tightens, independent sponsors fill the gap. Expect more flexible capital structures ahead…

Private equity’s local roll-up boom is reshaping Main Street. Limited oversight may mean higher prices for consumers.

A seller’s biggest liability may start after closing. Stress-test your insurance stack 12–24 months before a sale…

Inventory isn’t automatically “on top” of the multiple. It depends on how much net working capital the business truly requires to operate…

🗓️ Events

• MIT ETA Conference (Feb 28) - Boston, MA

• Babson ETA Conference (Mar 6) - Boston, MA

• BYU ETA/SMB Conference (Mar 6) - Provo, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• evolutiq Search Fund Day (Mar 12) - Ehrenfeld, DE

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Is the SBA Loan Killing Deals?

On Reddit, a buyer asked whether SBA loans are “killing deals” after a broker claimed SBA-eligible businesses are flooded with 20+ similar offers, with lower all-cash bids often winning. Commenters largely pushed back, arguing the issue isn’t SBA financing itself but heightened competition, positioning, and deal execution.

Key takeaways from the discussion:

• Crowded SBA Market – Businesses in the $350k–$500k SDE range attract many first-time buyers using SBA financing, leading to heavy competition and multiple comparable offers.

• Deal Structure Constraints – SBA rules limit flexibility (e.g., seller rollovers requiring personal guarantees), making offers look similar and reducing creative structuring options.

• Retrading Risk – Many deals are renegotiated post-LOI after due diligence uncovers overstated financials; excessive price cuts can kill deals, but justified adjustments are common and expected if framed properly.

• Cash vs. Certainty – Sellers prioritize deal certainty and clean execution; strong all-cash offers may win, but SBA buyers can compete if they demonstrate credibility, rapport, and a high likelihood of closing.

• Competition from New Buyers – An influx of buyers, fueled by online courses promoting business acquisition, has intensified competition more than SBA loans themselves.

— — — — — — — — — — — —

Who’s Buying in the Lower Middle Market in 2026? Key Buyer Trends From Axial Data

The lower middle market buyer pool expanded significantly in 2025, with record new entrants and a meaningful shift in who is closing deals. Data from Axial shows a more diversified mix of acquirers, intensifying competition—especially for $1M–$3M EBITDA businesses.

Key insights from the report:

• Record Buyer Growth – Axial added 2,635 new buyside members in 2025, up 36% YoY, continuing a multi-year acceleration that began in 2023 and signaling sustained acquisition appetite.

• $1M–$3M EBITDA Sweet Spot – Across Private Equity, Independent Sponsors, Search Funds, Holding Companies, Family Offices, Corporations, and Individual Investors, mid-90% of active mandates target $1M–$3M EBITDA, with strong secondary demand in the $3M–$5M range.

• Shifting Buyer Mix – PE Funds and Independent Sponsors accounted for 61% of closed deals in 2021 but only 45% in 2025. Search Funds (14%) and Individual Investors (13%) now represent a growing share of completed transactions, creating a more balanced buyer landscape.

• Sector Supply–Demand Gaps – Industrials ranks #1 in both deal activity and investor interest, while Business Services (#2 interest, #6 activity) reflects heightened competition. Food & Hospitality shows the opposite dynamic, with deal flow outpacing buyer enthusiasm.

• Evolving Deal Sizes – Average TEVs fluctuate by buyer type: Holding Companies led 2025 at $17.4M, followed by Family Offices ($12.4M). Search Funds and Individual Investors are moving upmarket, while PE averages declined, likely due to increased add-on acquisition activity.

— — — — — — — — — — — —

DealStats Value Index Q1 2026

The DealStats Value Index summarizes private-company transaction multiples and margins through Q4 2025, highlighting moderating valuations and mixed profitability trends across sectors and size bands

Key insights from the report:

• EBITDA Multiples Eased Late 2025 – Median private-company EBITDA multiples declined to 3.5x in Q4 2025, down from the 2024 peak of 4.8x, reflecting valuation normalization after post-2022 recovery.

• Revenue Multiples Rebounded – Net sales multiples rose to 0.62x in Q4 2025 after midyear softness, continuing a gradual upward long-term trend despite periodic volatility.

• Margins Stabilized, Then Mixed – EBITDA margins recovered to 16% in Q4 2025 after dipping to 14% in Q3. Over the long term, margins have ranged mostly between 11% and 18%, with 18% representing cyclical peaks.

• Sector Dispersion Remains Wide – Information and Utilities command the highest all-time EBITDA multiples (10.8x and 8.2x, respectively), while Accommodation & Food Services and Other Services trade at the low end (2.6x–3.1x).

• Public Buyers Pay Premiums – Across sectors, public-company acquirers consistently paid higher revenue and EBITDA multiples than private buyers, likely reflecting strategic synergies and scale advantages.

🧵 Online Highlights

I scroll, so you don’t have to.

In a downturn, “need-to-have” home services win. Foundation, plumbing, and critical repairs command higher multiples than discretionary remodels…

The multiple lives beyond the P&L. Team depth, customer stickiness, and owner transferability often matter more than headline EBITDA…

Good market perspective on ecom space. Seems like M&A activity bottomed and starting to accelerate…

“The market had a boom around 2021 as all aggregators raised a lot of funds and artificially pumped the multiples. Which if you look at a lot of these aggregators today most have gone bust or divested their portfolios at a significant loss. I feel the market today is maturing and has a lot more diversity in acquirers as more awareness comes to the space . Q1 2026 has actually been extremely active with a lot of high net worth individuals, strategic buyers and Aggregators. We have had the most activity this month than ever before.”

Good tips on drafting your LOI…

Asset purchase or equity deal? Your SBA checklist changes with the structure…

SBA pre-approvals qualify access to financing — not the business or the buyer’s ability to close…

🗓️ Events

• MIT ETA Conference (Feb 28) - Boston, MA

• Babson ETA Conference (Mar 6) - Boston, MA

• BYU ETA/SMB Conference (Mar 6) - Provo, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• evolutiq Search Fund Day (Mar 12) - Ehrenfeld, DE

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

2. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Investing: Underwriting the Searcher

Search investing hinges heavily on evaluating the operator, not just the business. Unlike traditional private equity—where experienced CEOs can be hired and industry dynamics dominate outcomes—search deals rely on often first-time operators leading fragile small businesses, making leadership quality a primary driver of returns.

Key insights:

• Jockey vs. Horse – In search investing, operator quality can outweigh industry quality, unlike larger PE deals where scale and market forces dominate performance.

• CEO Experience Gap – Most searchers lack prior CEO experience, and small businesses can’t afford seasoned executives, increasing execution risk.

• Operator Impact on Returns – Strong operators can temporarily outrun weak industry dynamics in small businesses, while weak leadership can sink even solid companies.

• Indexing vs. Underwriting – Investors can diversify broadly across many deals or selectively assess searcher quality; the latter is more subjective but potentially higher conviction.

• Rising Deal Variability – While strong deals still exist, the overall quality of search opportunities appears to be declining, making rigorous operator evaluation increasingly important.

— — — — — — — — — — — —

Behind the Deal Docs: What Really Happens When Lawyers Negotiate Your Business Sale

Sara Sharp explains what really happens during the legal negotiation phase of a business sale—and why it often feels slow and opaque. Once the LOI is signed, attorneys enter a detailed drafting and redlining process designed to allocate risk, prevent future disputes, and quietly move the deal toward closing.

Key takeaways:

• Documentation Is Risk Management – After the LOI, buyer’s counsel drafts the purchase agreement, and both sides negotiate language carefully to prevent post-closing lawsuits—not to stall the deal.

• Redline Realities – Clean, track-changed drafts speed negotiations; messy markups, unclear summaries, and piecemeal edits create unnecessary delays and confusion.

• Strategic Pushback – Good attorneys accept most proposed changes (70–75%) and focus negotiations on high-impact provisions like indemnification, liability caps, escrow terms, and restrictive covenants.

• Lawyer-to-Lawyer Dynamics Matter – Private conversations between attorneys often resolve issues faster and more candidly than large group calls filled with posturing.

• Speed vs. Friction – Deals slow down due to poor communication, over-negotiating minor issues, and repeated new edits; they accelerate with responsive counsel, clean drafts, aligned clients, and a focus on the big picture over perfection.

— — — — — — — — — — — —

Top Small Business Statistics

I like to revisit articles like this from time to time. Even if the data is a bit stale (2024), it’s a great reminder of the power of SMBs.

Small businesses remain the backbone of the U.S. economy, driving job creation, innovation and resilience despite inflationary pressures and post-pandemic recovery challenges. The data highlights both strong growth areas—like healthcare and digital commerce—and persistent risks, including capital shortages and early-stage failure rates.

Key insights from the report:

• Economic Backbone – There are 33.3 million small businesses in the U.S., representing 99.9% of all businesses and employing 61.6 million people (45.9% of the workforce), though over 80% operate without employees.

• Job Growth & Industry Shifts – Small businesses created nearly 13 million net new jobs over 25 years. Healthcare, social assistance and home health are projected to see the fastest growth, while professional services leads in job openings.

• Wages & Ownership Trends – The average small business owner earns $69,119 (16% above the national mean wage). Women own 43.4% of small businesses, minorities 20.4% and veterans 6.1%, while Millennials account for just 13% of ownership.

• Digital & Cost Pressures – Over 25% of business is conducted online, yet nearly one-third of businesses lack a website. Labor consumes 70% of business spending, inventory 25–35%, and marketing about 9% of revenue, with inflation driving cost-cutting and efficiency strategies.

• Survival & Risk Factors – 20% of businesses fail within their first year and 50% by year five. The top failure causes are running out of capital (38%) and lack of market demand, while healthcare and social assistance have the highest survival rates and construction the highest first-year failure rate.

🧵 Online Highlights

I scroll, so you don’t have to.

In seasonal businesses, survival is a cash planning problem. Underwrite winter like revenue could stall for weeks…

Most vertical acquisitions don’t create value. In healthy markets, focused operators usually outperform fully integrated stacks…

Most sellers are honest. The few who aren’t can cripple your business if your docs and diligence aren’t tight…

Could be an interesting opportunity for someone…

Small tuck-ins can drive outsized returns. But the real upside comes from building a platform buyers will pay 8–12x for…

Roofing checks the roll-up boxes: fragmented, asset-light, high ticket. A good discussion around this industry…

UCC, tax lien, and litigation searches should happen early— not the week of closing. Surprises are expensive when the wire is queued…

Don’t just buy cash flow. Buy attention — traffic acquisitions often compound faster than standalone revenue…

🗓️ Events

• NOVA ETA (Feb 18) - Fairfax, VA

• Acquire Fort Worth (Feb 19) - Fort Worth, TX

• Texas ETA Summit (Feb 13) - Austin, TX

• MIT ETA Conference (Feb 28) - Boston, MA

• Babson ETA Conference (Mar 6) - Boston, MA

• BYU ETA/SMB Conference (Mar 6) - Provo, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• evolutiq Search Fund Day (Mar 12) - Ehrenfeld, DE

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🤔 Other - Buying a Business in 2026: A Reality Check

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Best Sourcing Strategies: Findings from 314 Searchers

On Searchfunder, Matthew Peery shared his analysis of the deal sourcing strategies of 314 succesful first-time searchers. There’s no clear source for this data so I would take it with a bit of caution but overall, the insights seem to line up with what I see at DueDilio.

Pay attention to the fact that 177 deals were brokered while just 59 were through proprietary outreach.

— — — — — — — — — — — —

EBITDA Multiples: What’s Actually Clearing in the Search Market?

On Searchfunder, Kirupa Jayapal sparked a wide-ranging discussion among searchers, advisors, and investors about what EBITDA multiples are actually clearing in today’s lower middle market. The consensus: while headline expectations have crept up, real clearing prices still depend heavily on risk, structure, and buyer profile.

Key takeaways from the discussion:

• 4× vs. 5–6× Reality – Many SBA-backed search deals still clear in the 4–6× EBITDA range, but 5–6× is increasingly positioned as the starting point for “very good” businesses, especially above $1M EBITDA.

• Structure Matters More Than Price – Higher multiples often rely on seller notes, earn-outs, or creative structuring; pure leverage rarely supports 5–6× without meaningful growth or downside protection.

• Seller Expectations vs. Financeability – Sellers frequently anchor to peak or anecdotal multiples, but lenders ultimately constrain deals when coverage ratios and risk profiles don’t pencil.

• Competition & Industry Effects – PE firms, holdcos, and SBA buyers chasing the same quality assets (home services, healthcare, insurance, tech-enabled businesses) are pushing multiples higher in select sectors.

• Patience & Strategy for Searchers – Several experienced buyers emphasized discipline: targeting off-market or “hairy” deals, staying close as a second bidder, and avoiding overpaying just to get a deal done.

— — — — — — — — — — — —

2026: The Biggest Tear of M&A in History?

David Haber recaps a candid fireside chat with David Solomon and Ben Horowitz, arguing that 2026 could mark an inflection point for capital markets, AI-driven value creation, and M&A. The conversation frames today’s moment as a rare convergence of technological leverage, capital availability, and macro stimulus.

Key takeaways from the discussion:

• 2026 as a Potential M&A Record Year – Solomon predicts 2026 could be the biggest year in M&A history, driven by rate cuts, fiscal stimulus, and a capital investment supercycle that’s hard to slow.

• AI Changes the Economics of Growth – Horowitz argues AI breaks the “mythical man-month” constraint, allowing companies to throw capital (data + compute) at problems to accelerate outcomes and justify larger, earlier raises.

• Private vs. Public Market Divide – Private AI companies can burn cash to build the future, while public firms like Goldman Sachs must show near-term returns on massive equity bases, slowing adoption despite clear productivity upside.

• Entrepreneurial Institutions Win – Goldman’s long-term success is framed as the product of an American, pro-capital environment and an internal culture of entrepreneurial expansion—paralleling how Andreessen Horowitz sees itself today.

• Capital Markets Momentum Is Shifting – After a muted period since 2022, M&A sentiment rebounded in late 2025, especially across tech, financials, and healthcare, setting the stage for outsized deal activity ahead.

— — — — — — — — — — — —

Key Insights From the BizBuySell 2025 Report

I believe I highlighted this report last week but this infographic is really helpful.

🧵 Online Highlights

I scroll, so you don’t have to.

The SBA just narrowed the buyer pool: LPRs are out of SBA-backed acquisitions starting March 2026. High chance that this gets challenged and reversed…

These timelines reflect an experienced, well-networked buyer. If that ain’t you, plan accordingly…

Valuation always matters…

Can’t overstate how important it is to get NWC right and communicate it early with the seller…

Asset vs. stock deals aren’t just legal structure, they determine what risks and tax benefits you actually buy…

🤔 Other

Buying a Business in 2026: A Reality Check

I recently spoke with a seasoned corporate executive exploring the idea of buying a small business while keeping his day job. He came in skeptical of the booming “buy a business” course industry and wanted straight answers on what actually works, what things really cost, and where buyers waste the most time and money.

Here are a few highlights from our conversation that I think may be useful:

Courses vs. Doing the Work
Acquisition courses can be useful for people who need structure, community, and hand-holding. They typically bundle education, group forums, office hours, and vendor introductions. But they’re expensive ($7k–$15k), and even after paying, buyers still need to hire attorneys, diligence providers, lenders, and advisors separately. For experienced operators or self-directed buyers, much of the value can be replicated without paying for the “course premium.”

Deal Sourcing Myths
There’s no magic proprietary deal faucet. Brokered deals are accessible to everyone, and “off-market” sourcing usually costs extra, even inside paid programs. Aggregators can help, but preparation matters more than platform access. Most quality deals are shared first with brokers’ internal buyer lists, long before they hit public marketplaces.

What Buyers Get Wrong About ‘Passive’ Deals
The idea of a small, affordable, fully passive, under-the-radar business with growth upside is mostly fantasy. Anything resembling a “Goldilocks” deal attracts serious competition and institutional capital. Below ~$2M in deal size, competition eases slightly, but buyers still need to be realistic. This is a seller’s market, and multiples reflect that.

Where Deals Actually Happen
Most activity is in Main Street and lower middle market businesses: B2B services, home services, light manufacturing. Buyers tend to avoid ecommerce and software due to volatility, shifting multiples, and tech risk. Businesses that can’t easily be replaced by Amazon, Google, or AI remain the most durable.

Financing Reality (Especially SBA)
SBA lenders vary, but manufacturing and service businesses are generally easier to finance than ecommerce, software, real estate-heavy, or construction-related deals. Industry still matters, even if deal structure and borrower quality matter more.

What Deals Really Cost
Rough benchmarks still surprise first-time buyers:

• Legal: ~$13k–$20k

• Financial due diligence: ~$8k–$12k

• Other diligence is highly situational. Pricing depends on complexity, not just deal size.

It’s a Numbers Game
Buyers should expect to review dozens of deals and submit 50–100 LOIs before landing one. Preparation is the real differentiator: professional email, simple website, a one-page buyer profile, proof of funds, and SBA pre-approval all signal seriousness. Think of it like competing for a house in a hot market.

The Uncomfortable Truth
There is no easy button. Courses don’t change that. Platforms don’t change that. What works is preparation, patience, and credibility. Buyers who treat this like a real acquisition process, not a side hustle fantasy, give themselves the best odds.

Timeline Expectations
Six to eighteen months from search to close is normal. Anything faster is an exception, not the rule.

The biggest takeaway: most disappointment in this space comes from mismatched expectations, not lack of opportunity. Strip away the hype, do the work, and treat the process like the competitive market it actually is.

🗓️ Events

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Veteran ETA Day (Feb 12) - Philadelphia, PA

• NOVA ETA (Feb 18) - Fairfax, VA

• Acquire Fort Worth (Feb 19) - Fort Worth, TX

• Texas ETA Summit (Feb 13) - Austin, TX

• MIT ETA Conference (Feb 28) - Boston, MA

• BYU ETA/SMB Conference (Mar 6) - Provo, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• evolutiq Search Fund Day (Mar 12) - Ehrenfeld, DE

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

Join me today (Friday) at 12:30pm ET for a free webinar followed by Q&A on due diligence focus areas and costs.

Free RSVP 👉 https://www.eventbrite.ca/e/due-diligence-101-key-focus-areas-costs-tickets-1981248724268?aff=oddtdtcreator

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Dead Deal Report: Unpacking 2025’s Broken LOIs

The report analyzes 75 Axial-sourced deals in 2025 that fell apart after an executed Letter of Intent (LOI) to understand what factors most commonly prevented transactions from closing. It combines transaction-level data with contextual insights provided by members participating in those deals.

Key takeaways from the report:

• Top deal-breaking cause — Diligence issues: Non-Quality-of-Earnings (non-QoE) diligence findings were the most frequent reason LOIs didn’t close (≈25.3%), including uncovered legal risks, customer concentration problems, and problematic contracts.

• QoE EBITDA discrepancies matter: Divergences between expected and validated earnings accounted for about 21.3% of broken deals, underscoring how significant earnings adjustments can derail negotiations.

• Renegotiation and seller decisions: Around 14.7% of deals fell apart due to renegotiation challenges (price/structure disagreements), and roughly 13.3% involved sellers withdrawing from the process.

• Financing and performance issues: Financing constraints caused about 10.7% of failed deals, while business underperformance during diligence explained around 8%.

• Real examples illustrate patterns: The report includes anonymized deal anecdotes showing failures across buyer types and industries — from private equity to independent sponsors — reinforcing how varied the breakdown points can be.

Overall, the analysis highlights the increasing importance of thorough diligence and alignment of financial expectations in progressing from LOI to closing in middle-market M&A.

— — — — — — — — — — — —

Legitimate Addback or not?

This article from Bruce Marks reinforces how easily EBITDA addbacks can be misused—and why buyers and lenders push back hard during diligence. It emphasizes that addbacks should normalize earnings, not retroactively erase real operating decisions.

Key insights:

• Purpose of addbacks – Addbacks exist to remove non-recurring, non-operating, or owner-specific expenses to reflect sustainable cash flow, not to boost valuation artificially.

• Failed hires are real expenses – The full salary of an employee who “didn’t work out” is not a legitimate addback; it was a genuine operating cost, similar to a failed marketing spend.

• Valuation overreach risk – Adding back $75k of employee costs and applying a multiple (e.g., 4x = $300k) is a common but unjustifiable inflation tactic that lenders typically reject.

• Proper treatment is pro forma – Cost savings from eliminated roles should improve forward-looking projections, not historical EBITDA.

• Defensible employee-related addbacks – One-time severance, family or inactive payroll, and excess owner/executive compensation may qualify if rare, well-documented, and reasonable.

The takeaway: aggressive or poorly supported addbacks erode credibility, invite clawbacks in diligence, and can derail a deal—making early, rigorous scrutiny essential before submitting an LOI.

— — — — — — — — — — — —

Business Sale Failure Rate 2026: Why 80% Don’t Sell + How to Beat the Odds

The article from DueDilio explains why most privately held businesses fail to sell and shows that poor preparation—not market demand—is the core problem. While overall failure rates remain high, the data makes clear that sellers who prepare early, price realistically, and work with high-quality advisors can dramatically improve their odds.

Key insights from the analysis:

• Failure Rates Are Structural – Roughly 70–80% of small businesses never close a sale, with failure rates reaching 85–90% below $500K EBITDA and dropping sharply above $3M as institutional buyers enter.

• Valuation & Financials Kill Deals – Unrealistic pricing (35%) and weak financial documentation (25%) are the top reasons transactions fail, with QoE discrepancies increasingly breaking deals post-LOI.

• Mid-Market Is the Danger Zone – Businesses in the $500K–$3M EBITDA range face the worst odds due to limited buyers, SBA financing risk, and intense diligence scrutiny.

• Diligence Now Drives Failures – As financing availability improved, deal breaks shifted toward diligence findings like EBITDA overstatements, customer concentration, and legal issues.

• Preparation Changes Everything – Sellers who invest 12–24 months in cleanup, valuation, documentation, and advisor selection can boost success rates from ~25% to 65–90%.

🧵 Online Highlights

I scroll, so you don’t have to.

The data keeps saying the same thing: most small business buyers don’t regret the deal…

Preparation is key. We have many free tamplates & checklists in the DueDilio Knowledge Center…

Cheap multiples signal tradeoffs: sourcing effort, business quality, or both…

A searcher in the SoFlo WhatsApp group is dealing with this situation right now. Early alignment on net proceeds prevents wasted diligence and broken deals…

As an entrepeneur, this one hit home. Logos, tools, and SOPs don’t save businesses—solving the bottleneck does…

🗓️ Events

• ACG M&A South (Feb 2-4) - Atlanta, GA

• SDA Bocconi ETA Club (Feb 5) - Milan, IT

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Texas ETA Summit (Feb 13) - Austin, TX

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• SoCal ETA Conference (Apr 2) - Los Angeles, CA

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2026) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2026.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Q4 2025 BizBuySell Insight Report

The BizBuySell Insight Report shows a U.S. SMB acquisition market that stabilized in 2025 after volatility, with flat transaction volume, modest price growth, and increasingly selective buyers. Heading into 2026, disciplined operators, AI adoption, and preparedness on both sides are shaping outcomes more than interest rates or headlines.

Key insights from the report:

• Stabilized but selective market – Transactions were flat year over year while median sale prices rose 2% and total enterprise value increased 3%, signaling resilience despite inflation and policy uncertainty.

• Buyer pool expansion with friction – Private equity, search funds, and “corporate refugees” intensified competition for quality deals, but also lengthened diligence timelines and added complexity. Inflation, tariffs, and policy uncertainty have increased scrutiny on cash flow durability, cost structure, and forward-looking assumptions.

• Quality assets move fast – Well-run, profitable businesses often go under contract within weeks, so pre-qualification for financing and clear acquisition criteria are essential.

• AI as a valuation lens – Buyers increasingly view AI either as risk mitigation or upside potential; 33% see AI adoption as value-enhancing, while many owners already report performance gains from AI use. Businesses already using AI are viewed as more resilient, while laggards may offer margin-expansion opportunities for capable operators.

• K-shaped sector performance – Service and niche retail businesses with pricing power commanded premiums, while restaurants and manufacturing faced margin pressure from labor, tariffs, and input costs.

• Preparation beats macro factors – Interest rates had minimal impact on deal behavior; clean financials, reduced owner dependency, documented systems, and buyer readiness were the strongest determinants of successful transactions.

When someone online tells you of a “silver tsunami”, just ask them to highlight it in this chart…

— — — — — — — — — — — —

Cognitive Load of Command: What Building a $40M Roofing Company Taught Me About Processing Reality

The author reflects on how scaling a roofing company to nearly $40M in revenue fundamentally rewired their brain, not just their business. Entrepreneurship, they argue, creates a permanent shift in how reality is processed—expanding cognitive load, emotional capacity, and personal identity, often at a quiet cost to presence and relationships.

Key takeaways from the reflection:

• Cognitive Rewiring – Building a fast-growing company shifts thinking from linear problem-solving to holding thousands of interconnected variables simultaneously.

• A Different Kind of Stress – Entrepreneurial stress isn’t just “more pressure,” but a qualitatively different load that forces the brain to process complexity spatially rather than sequentially.

• Nervous System Growth – Repeated high-stakes decisions and uncomfortable conversations train the nervous system to tolerate tension without collapse.

• Invisible Weight of Decisions – The hardest part isn’t big decisions, but realizing any small decision can carry asymmetric, million-dollar consequences.

• Redefined Balance – Balance isn’t splitting time evenly, but becoming someone capable of carrying extreme complexity at work while consciously choosing presence at home.

— — — — — — — — — — — —

Seller wants to stay on as GM -- thoughts/guidance?

Jason W. sparked a wide-ranging Searchfunder discussion by asking whether it makes sense to keep a seller on as GM post-acquisition. The thread reveals strong opinions shaped by hard-earned experience, especially around control, culture, and emotional risk.

Key insights from the discussion:

• Clear Control Is Non-Negotiable – Most respondents stressed that keeping a seller as GM only works if authority, reporting lines, and decision rights are unambiguous from day one.

• Emotional & Cultural Risk – Founders often struggle to transition from owner to employee, which can create friction, slow change, or destabilize teams loyal to the former owner.

• SBA Constraints Matter – Multiple commenters noted that SBA financing generally limits seller involvement to 6–12 months, effectively forcing a transition whether it works or not.

• Transition vs. Permanence – The few positive experiences framed seller involvement as temporary knowledge transfer, not a long-term operating role.

• Family Complications – The presence of a son-in-law or other relatives increases complexity around succession, loyalty, and exit risk if things sour.

Overall, the consensus leaned skeptical: keeping a seller on as GM can work in rare, tightly structured cases, but most operators advised treating it as a short, contractual transition—not a permanent solution.

🧵 Online Highlights

I scroll, so you don’t have to.

Seller integrity is the single most important factor in a home service acquisition…

Rising fees and ad costs have eliminated most low-margin FBA opportunities…

Private equity ownership requires early alignment on expectations and exit timing…

Most Main Street M&A deals fail when financial reality doesn’t match seller presentations and asking price…

Buying a franchise as a side hustle is a common and costly mistake…

The ETA model is shifting from financial buyers toward operator-buyers…

Revenue growth can create liquidity risk if working capital isn’t planned early…

The gap between how search is sold and how it operates is widening fast…

🗓️ Events

• Butler University ETA Conference (Jan 26) - Indianapolis, IN

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• ACG M&A South (Feb 2-4) - Atlanta, GA

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Texas ETA Summit (Feb 13) - Austin, TX

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

How to Retain Key Employees After Buying An Accounting Firm

The Deal Makers newsletter outlines how buyers can retain top performers after acquiring an accounting firm, emphasizing that the post-close transition is the most dangerous period for talent loss. Her advice focuses on clear communication, written commitments, and incentives that prioritize stability over short-term perks.

Key takeaways include:

• Early Visibility & Continuity – Meet employees as early as possible, ideally pre-close, with the seller’s endorsement to establish confidence and reduce uncertainty.

• Written Offer Letters – Provide printed offer letters confirming job security, pay, and benefits to give employees tangible reassurance during an emotionally charged transition.

• Hidden Internal Dynamics – Ask the seller whether anyone internally expected to buy the firm, as overlooked successors or family members can create resentment and disruption.

• Retention Bonuses Over Raises – Use time-based retention bonuses instead of immediate raises to incentivize stability while you assess long-term fit and performance.

• Stability First Mindset – High performers leave first when things feel uncertain; clear, immediate assurances help preserve talent, client trust, and revenue momentum.

— — — — — — — — — — — —

The SMB M&A Pipeline: Q4 2025

Axial reports that Q4 2025 marked a strong finish to a record year for SMB M&A activity, with rising deal volume signaling increased seller readiness across most industries. However, buyer interest remained selective, concentrating in sectors viewed as durable and defensible.

Key insights from the data:

• Record Deal Activity – 2,854 deals came to market in Q4 (+11.7% YoY), bringing total 2025 volume on Axial to 12,856 deals, the highest annual total on record (+17.1% YoY).

• Healthcare Surge – Healthcare led all sectors with a 40.5% YoY increase, driven by consolidation, regulatory clarity, and demand for predictable cash flows.

• Supply–Demand Alignment – Industrials ranked #1 in both deal volume and pursuit rate, reflecting strong buyer confidence in asset-backed, essential-service businesses.

• Seller-Heavy Sectors – Food & Hospitality and Consumer Goods showed high deal volume but weak pursuit rates, suggesting sellers are testing the market while buyers remain cautious.

• Buyer Selectivity in Tech – Technology attracted outsized buyer interest relative to supply, indicating fewer deals but higher-quality or more defensible assets drawing competition.

— — — — — — — — — — — —

The Golden Handcuffs Are Getting Less Golden: Why More PE Pros Are Choosing Ownership Over Waiting

Private equity carry is increasingly viewed as a long, uncertain promise rather than a reliable path to financial freedom. As opportunity costs rise and timelines stretch, more PE professionals are reassessing whether waiting on the ladder is worth it compared to owning something outright.

Key takeaways:

• Carry Is Conditional – The “big payout” in PE depends on timing, firm dynamics, and factors outside individual control, making it far from guaranteed.

• Probability Over Narrative – Professionals are shifting from aspirational stories about upside to probability-weighted life planning.

• Ownership Changes Outcomes – Examples of peers who left PE to build and sell businesses highlight how direct equity can outperform years of comp grinding.

• Rising Cost of Waiting – Higher living costs and slower wealth accumulation make long, deferred payoff structures less attractive.

• Shift Toward ETA & Succession – Entrepreneurship Through Acquisition and succession-driven deals offer clearer effort-to-reward alignment, especially in Europe and CEE.

Overall, the essay argues that while PE remains elite training, true financial freedom more often comes from equity you own, control, and can compound on a timeline that fits real life.

🧵 Online Highlights

I scroll, so you don’t have to.

Most ETA deals don’t fail on price—they fail on people, risk, and structure…

Companies are bought when buyers are ready, not when founders decide to sell…

Sales tax on acquired vehicles can quietly blow up your closing cash needs…

More capital, more buyers, fewer great businesses: the search fund squeeze is real. ETA landscape has changed…

Once an SBA loan closes, fixing a bad structure is painfully hard…

Make sure you have these figured out before starting your ETA journey…

🗓️ Events

• Butler University ETA Conference (Jan 26) - Indianapolis, IN

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• ACG M&A South (Feb 2-4) - Atlanta, GA

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Texas ETA Summit (Feb 13) - Austin, TX

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• Wharton ETA Summit (Apr 2) - Philadelphia, PA

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Demystifying Deal Structure

This guide from Permanent Equity lays out a practical framework for negotiating lower middle-market acquisition agreements by starting from “middle ground” deal terms rather than extreme positions. It aims to reduce friction, transaction costs, and failed deals by explaining what’s typical, why terms matter, and where buyer–seller preferences usually diverge.

Key insights from the guide:

• Middle-Ground Philosophy – Instead of negotiating from extremes, the guide defines standard deal terms that reflect balanced risk allocation, using deal-specific facts to justify deviations when necessary.

• Deal Term Classification – Terms are grouped into deal-driving, situation-specific, moderately material, and under-the-radar categories to help parties prioritize time and negotiation effort.

• Asset Purchase Focus – The analysis centers on asset purchase agreements, the most common structure in lower middle-market deals, while highlighting where stock sales differ.

• Risk Allocation Mechanics – Representations, warranties, covenants, and indemnification work together as core risk-management tools, with indemnification determining whether protections are enforceable.

• Practical Negotiation Guidance – Each term explains its purpose, typical “middle” position, buyer vs. seller preferences, and the likely impact on value, risk, and deal completion.

— — — — — — — — — — — —

Exploring Bilateral Conflicts of Interest

This Yale case examines the inherent tensions in search funds and entrepreneurship through acquisition (ETA), arguing that even well-designed incentive structures cannot fully eliminate conflicts between entrepreneurs and investors. The authors surface predictable, structural misalignments so participants can recognize and navigate them with eyes wide open rather than be surprised mid-journey.

Key insights from the case:

• Structural Misalignment Is Inevitable – Search funds generally align talent and capital, but certain conflicts are baked into the model and recur despite good governance and intentions.

• Entrepreneur-Driven Conflicts – CEOs act as “option holders,” creating incentives to close marginal deals, push high-variance growth, time exits around personal liquidity, manage information selectively, and allocate capital in ways that improve personal utility.

• Information & Control Asymmetry – Entrepreneurs control operational data and day-to-day decisions, which can skew transparency and delay investor intervention when problems arise.

• Investor-Driven Conflicts – Investors can fire CEOs but not vice versa, may sit on competing boards, optimize portfolios over individual companies, influence exits (e.g., equity rollovers), and shape cap tables and advisors in their favor.

• Practical Takeaway – These conflicts are not moral failings but predictable dynamics; acknowledging them early enables more rational governance, clearer expectations, and healthier long-term relationships between CEOs and capital providers.

— — — — — — — — — — — —

2025 Blooma Annual Letter

The annual letter from Big Deal Small Business offers a candid, operator-level view of what it actually takes to stabilize and grow a small service business after acquisition. For someone considering buying a business, it highlights the often-underestimated work required between closing a deal and achieving durable growth.

Key takeaways:

• Post-Acquisition Reality – Buying the business was only the starting point; years of systems, team, and cultural rebuilding were required before growth was even appropriate.

• Mission as an Operating Tool – Clearly defined mission and vision weren’t aspirational slogans, but practical frameworks for making hard people, capital, and strategy decisions.

• Team Before Growth – Meaningful scale only became viable after investing in leadership, operations, and decision ownership beyond the founder.

• Experimentation Has a Cost – Pricing, capacity utilization, and service-line expansion required trial and error, temporarily suppressing profits in exchange for long-term clarity.

• Enduring > Fast – The letter underscores that slower, intentional growth can be the right choice when the goal is a resilient business that doesn’t depend on heroic effort from the owner.

— — — — — — — — — — — —

5 Keys to Being a Great CEO

The post on Searchfunder lays out a candid framework for what actually determines success for first-time CEOs coming out of a search or acquisition. Rather than focusing on deal mechanics or strategy theory, it argues that personal resilience, people, and relationships are the true long-term differentiators.

Key insights for searchers and new owners:

• Mental Fitness Is Foundational – CEO performance is inseparable from physical and mental health; neglecting it leads to poor decisions, burnout, and avoidable failure.

• Your Management Team Is the Flywheel – Sustainable success hinges on hiring people who are better than you, aligned on values, customer-centric, and capable of carrying real ownership.

• Peer Groups Reduce Failure Risk – Small, trusted peer groups provide perspective, pattern recognition, and emotional support that boards and investors often cannot.

• Board Quality Beats Board Size – A small, engaged board with clear roles, relevant expertise, and genuine commitment to the CEO dramatically improves outcomes.

• The Right Mentor Changes Everything – A deeply trusted guide with lived experience in search and operations can accelerate learning, prevent catastrophic mistakes, and shape both the CEO and the business over decades.

— — — — — — — — — — — —

U-Haul Growth Index 2025

The article analyzes U-Haul’s 2025 Growth Index to show where Americans are relocating, using one-way moving data as a proxy for population and economic momentum. For SMB buyers, the data offers practical signals about where demand, labor, and exit opportunities are most likely to strengthen.

Key takeaways for SMB buyers:

• Demand Follows Migration – States like Texas, Florida, North Carolina, and Tennessee continue to attract inbound movers, supporting long-term demand for local service businesses.

• Labor Pools Are Shifting – Population inflows increase the availability of workers over time, which can ease hiring constraints for operators in growing regions.

• Regional Tailwinds Matter – Buying in high-growth states can provide organic revenue lift independent of operational improvements, reducing reliance on aggressive pricing or expansion.

• Out-Migration Creates Risk – Persistent population loss in states like California can pressure customer counts, labor availability, and valuations for small businesses.

• Exit Optionality Improves – Businesses located in growth markets are typically more attractive to future buyers, improving exit prospects and multiple durability.

🧵 Online Highlights

I scroll, so you don’t have to.

The real purpose of a subordinated seller note is accountability after close…

Is this the new gas station play?

If you’re exploring accounting firm acquisitions, this thread has some good insights…

Why SBA “low default” stats are the wrong metric for modeling deal risk…

In smaller businesses, fixed costs magnify both growth and downside…

A vague LOI creates deal risk long before diligence starts…

🗓️ Events

• Butler University ETA Conference (Jan 26) - Indianapolis, IN

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Texas ETA Summit (Feb 13) - Austin, TX

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

I hope everyone had an amazing holiday season! Wishing you a very successful and healthy 2026!

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

‘AI roll-up’ investors think services firms can trade more like software companies. Here’s what they get wrong

Nathan Benaich and Nikola Mrkšić argue that the popular “AI roll-up” investment thesis misunderstands the difference between improving operations and transforming a business model. While AI can meaningfully boost efficiency in services firms, it does not change the structural economics that cause markets to value services far below software.

Key insights from the article:

• False Arbitrage – Buying low-margin services firms and adding AI may improve margins, but it does not justify software-like valuation multiples.

• Public Market Reality – Even heavily automated BPOs continue to trade at services multiples, far below true software companies, signaling entrenched structural differences.

• Structural Barriers – Client control, hourly billing models, and low switching costs all work against automation-led value capture in services.

• PolyAI Case Study – After extensive diligence, PolyAI rejected acquiring contact centers, concluding BPOs are neither incentivized nor rewarded for innovation.

• Correct Use of AI – The most successful services firms use AI to augment human labor and relationships, not replace them, and therefore still trade like services businesses.

🧵 Online Highlights

I scroll, so you don’t have to.

One edge for independent sponsors is finding smaller deals with operational risk…

Helpful resources…

New SBA rule tightens who can own and guarantee 7(a) and 504 borrowers…

Deal dynamics are not what they used to be…

Buying “small” works when you’re willing to actually operate the business…

🗓️ Events

• Butler University ETA Conference (Jan 26) - Indianapolis, IN

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

What's your best tip for someone beginning a self-funded search?

This Searchfunder thread centers on practical, hard-earned advice for MBA graduates and first-time searchers committing to a self-funded search, with an emphasis on discipline, leverage, and patience. Contributors consistently stress that success comes less from brilliance and more from building the right systems, relationships, and habits early.

Key insights from the discussion:

• Mentorship as a force multiplier – Repeatedly cited as the highest-ROI decision: learn directly from someone who has completed a self-funded search or join an accelerator/community to avoid costly mistakes.

• Deal team before the deal – Line up trusted legal, accounting, QoE, and SBA/lending support early so you can move fast and confidently when opportunities arise.

• Process and leverage matter most – Successful searchers emphasize scalable sourcing (on- and off-market), CRM discipline, and positioning yourself as a “qualified buyer” to handle volume efficiently.

• Clarity of thesis and buy box – Defining industry focus, criteria, and personal pitch early builds credibility with brokers and owners and reduces distraction from “shiny objects.”

• Patience, consistency, and community – Expect a long, sometimes lonely search; staying in touch with owners, networking with other searchers, and maintaining daily structure are critical to eventually closing a deal.

— — — — — — — — — — — —

Lawyer Just Killed a Deal

This Reddit discussion recounts a business acquisition that collapsed late in the process, with most participants attributing the failure to legal mishandling rather than deal fundamentals. The thread highlights how misaligned incentives, inexperience, and poor process management from lawyers can derail otherwise viable transactions.

Key insights from the discussion:

• SPA sequencing matters – Commenters broadly agree it’s unreasonable for a buyer to waive conditions and risk a non-refundable deposit before negotiating and agreeing to the final Share Purchase Agreement.

• Wrong lawyer, wrong outcome – Many point to the seller using a real estate or non-corporate lawyer who lacked experience with business transactions, creating confusion and unnecessary conflict.

• Lawyers can kill momentum – A recurring theme is that time, over-lawyering, and rigid positions from attorneys often destroy deals, especially when they are paid hourly regardless of outcome.

• Seller motivation questioned – Several respondents suggest the seller may have been lukewarm or looking for an excuse to walk away, with the lawyer’s stance amplifying cold feet.

• Broker responsibility and lessons learned – Brokers and operators stress the importance of vetting attorneys early, aligning on commercial goals, and knowing when to stop negotiating and close.

— — — — — — — — — — — —

SBA vs. Conventional Loans: Why Small Business Buyers Choose 7(a) Financing

This article explains the practical differences between SBA loans and conventional bank loans for small business acquisitions, with a focus on how structure, risk, and borrower profile affect financing outcomes. It frames the choice as less about “which is better” and more about which fits a buyer’s deal, experience, and balance sheet.

Key insights from the discussion:

• Down payment & leverage – SBA loans typically require lower equity (often ~10%) versus conventional loans, which demand more cash and lower leverage.

• Risk allocation – SBA guarantees shift some risk to the government, making banks more flexible with first-time buyers, while conventional loans put more risk directly on the lender.

• Borrower profile – SBA loans are friendlier to searchers and new operators, whereas conventional loans favor experienced owners with strong net worth and liquidity.

• Cost & complexity – SBA loans carry guarantee fees and heavier documentation, while conventional loans can be simpler and cheaper if you qualify.

• Deal fit matters – Factors like deal size, speed to close, seller rollover, and buyer experience often determine which option is realistic, not just interest rates.

— — — — — — — — — — — —

Amazon FBA Due Diligence: Complete Buyer’s Guide (2026)

This guide walks through how to properly diligence an Amazon FBA business, emphasizing that surface-level metrics can hide major operational and platform-specific risks. The core message is that buyers must go far beyond revenue screenshots to understand sustainability, compliance, and true cash flow.

Key insights from the discussion:

• Revenue quality over top-line growth – Sales concentration, product lifecycle stage, and reliance on a small number of SKUs can dramatically affect durability.

• Amazon platform risk – Account health, policy compliance, suspension history, and IP issues are critical because Amazon can shut down a business overnight.

• Financial normalization – Buyers need to validate add-backs, advertising spend (PPC), inventory accounting, and true owner earnings rather than trusting broker-provided SDE.

• Supply chain and inventory risk – Supplier dependency, lead times, MOQ requirements, and inventory aging can create cash crunches even in “profitable” businesses.

• Competitive dynamics – Reviews, rankings, pricing pressure, and copycat risk matter more than branding narratives when assessing long-term defensibility.

🧵 Online Highlights

I scroll, so you don’t have to.

Fewer deals, lower quality: why buyers are struggling post-Liberation Day…

Crowded markets haven’t changed the fundamentals of buying a good business…

Broadly, the default rate remains very low. ETA risk is real, but even at 5%, the risk-return profile remains compelling…

ETA in 2026 looks evolutionary, not transformational…

Franchise royalties rarely justify the cost without real brand pull…

It’s expensive, but writing off proprietary sourcing is a mistake for long-term search outcomes…

Unrelated to ETA: This is a great aggregation of 2026 outlooks from various investment banks…

🗓️ Events

• Butler University ETA Conference (Jan 26) - Indianapolis, IN

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• HoldCo Conference (Feb 9-12) - Sundance, UT

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🤔 Other - Silver Tsunami?

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

Post-Merger Integration: Ensuring a Smooth Transition

Attorney David Sterrett explains why post-merger integration—not deal closing—is the true determinant of whether an acquisition delivers its promised value. He outlines practical steps buyers and sellers can take to reduce disruption, retain trust, and create long-term value after the transaction.

Key takeaways include:

• Early Integration Planning – Using diligence insights to map operational changes, role overlaps, system migrations, and timelines prevents confusion immediately after closing.

• People & Culture First – Clear communication, leadership alignment, and respect for the seller’s legacy help reduce uncertainty, protect morale, and retain customers.

• Systems & Process Alignment – Gradual consolidation of technology and workflows supports daily operations while moving toward a unified organization.

• Customer & Vendor Protection – Proactive, transparent outreach reassures stakeholders, preserves goodwill, and safeguards revenue continuity.

• Ongoing Monitoring – Tracking KPIs like retention, financial performance, customer satisfaction, and system stability allows teams to adjust before issues escalate.

— — — — — — — — — — — —

If You Can’t Join ‘Em, Beat ‘Em

The piece from a16z argues that weak job markets push more young graduates toward entrepreneurship, especially in tech. As hiring slows, starting a business becomes a more attractive alternative to traditional employment—particularly for those steeped in startup culture.

This piece talks about the shift into entrepreneurship but I’m seeing the same trends into ETA. 4 out of 5 searchers I talk with are coming from tech.

Key points include:

• Inverse Hiring Relationship – As hiring rates fall, a higher share of would-be jobseekers pursue entrepreneurship instead.

• Post-2022 Shift – Rising interest rates and a tougher job market in 2022–2023 coincided with more grads choosing to start businesses.

• ZIRP Contrast – During zero-interest-rate periods with strong hiring, fewer people opted to go it alone.

• Tech Dominance – The largest group of founders jumping straight from school launch tech startups, with marketing a distant second.

• Startup Culture Fit – High-agency, self-starting individuals are especially drawn to entrepreneurship when traditional paths are blocked.

— — — — — — — — — — — —

Search Funds in Canada: Navigating Cross-Border Challenges

Osler Hoskin & Harcourt explains why search funds are gaining traction in Canada—but also why blindly adopting U.S.-style structures can create unnecessary friction. The piece emphasizes that thoughtful, Canada-specific structuring is critical to avoid tax inefficiencies and execution risk.

Key points include:

• Two-Phase Search Fund Model – Search funds follow a search phase (18–24 months) funded by investors, followed by an acquisition and operator-led growth phase with priority investment rights and equity incentives.

• U.S. LLC Mismatch – While common in the U.S., LLCs are treated as corporations for Canadian tax purposes, creating double-taxation risk and added compliance burdens for Canadian investors.

• Investor & Compliance Friction – Canadian investors in U.S. LLCs may face foreign affiliate rules, U.S. tax filings, and reduced after-tax returns.

• Canadian LP Advantage – Canadian limited partnerships offer flow-through tax treatment, liability protection, and flexibility familiar to private equity and VC investors in Canada.

• Plan Early, Avoid Conversions – Converting a U.S. LLC to a Canadian LP later is complex, costly, and potentially taxable, making upfront Canadian structuring far more efficient.

— — — — — — — — — — — —

Hard to Kill: A Four-Part Framework for Evaluating Small Business Acquisitions

Mineola Search Partners share a personal, downside-focused framework for judging small business acquisitions — more “stay alive and compound” than venture-style swing-for-the-fences. The core idea: prioritize asymmetry, avoid existential risks, protect the downside, and buy businesses that are operationally resilient (“hard to kill”), especially for first-time CEOs.

Key insights:

• Asymmetry – Favor deals where upside meaningfully outweighs downside (“heads I win, tails I don’t lose much”), and be wary of leverage-driven negative asymmetry.

• Don’t Multiply by Zero – Avoid “single points of failure” (e.g., heavy customer concentration, extreme cyclicality, over-leverage) because rare blow-ups can erase everything.

• Downside > Upside – Embrace “errors of omission” (missing a great deal) to avoid “errors of commission” (doing a fatal deal); prefer high-probability solid wins over low-probability moonshots.

• “Hard to Kill” Targets – Look for resilient traits like recurring revenue, high switching costs, low key-person/customer concentration risk, strong retention, healthy margins/EBITDA scale, simple operations, and defensible end markets.

• Tails Still Happen Without Binary Bets – Outlier outcomes can come from strong fundamentals plus execution/timing/luck—not necessarily from taking fragile, all-or-nothing risks—so the framework aims to keep you in the game long enough to get lucky.

🧵 Online Highlights

I scroll, so you don’t have to.

A well-oiled machine executes 1 deal per 100. How many LOIs do you think you need to submit in order to get one across the finish line?

High multiples on small deals deserve more skepticism, not excitement…

Geography matters more than most buyers admit in search outcomes…

Post-acquisition - process and people create returns before automation does…

Lender-funded earnouts can bridge valuation gaps without overleveraging…

Independent sponsors take real risk before they ever get paid…

🤔 Other

Silver Tsunami?

This Reddit thread debates whether a “silver tsunami” of Boomer-owned small businesses will ever really hit the market—or whether most owners will keep delaying, overpricing, or simply wind down instead of selling. The consensus is less “wave” and more “slow drip,” with deals concentrated among insiders and characterized by messy financials and mismatched expectations.

Key takeaways:

• No Sudden Flood – Many commenters doubt a mass listing event; they describe decades of “it’s coming” narratives and expect continued trickle, not a supply shock.

• Valuation & Book Quality Gap – Buyers are applying increasingly rigorous diligence (even at $150k–$700k SDE), while many sellers have messy books, aggressive add-backs, and expectations that don’t match buyer financing constraints.

• Incentives to Hold On – Owners often earn more by continuing to operate than by selling at ~3x SDE (after tax), especially when autonomy and identity are tied to the business.

• Insiders Win – The strongest opportunities often go to industry incumbents via off-market conversations, who can absorb customers when weaker operators shut down or “sell” client lists cheaply.

• Quiet Closures & Slow Unwinding – Several comments point to owners shrinking operations, firing clients, or closing when health/energy forces the issue—meaning value dissipates rather than transferring via clean sales.

🗓️ Events

• Search Fund & Independent Sponsor Roundtable (Dec 17) - Philadelphia, PA

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

The Merger Playbook: Crossbeam’s CEO Breaks Down Every Detail of the Deal That Worked

Bob Moore, CEO of Crossbeam, recounts how merging with rival Reveal — despite heavy skepticism and a 75% merger failure rate — transformed both companies’ trajectory. By centering customer experience, aggressively frontloading pain, and unifying products, teams and pricing, the combined company accelerated growth, improved efficiency and strengthened its market position.

Key insights from the story:

• Why merge at all – Crossbeam and Reveal were burning too much cash in a slow, category-creation market while splitting the network in half, confusing customers and making it impossible to fully realize network effects or build a scalable pricing model.

• Founder alignment & deal principles – Moore and Reveal’s CEO, Simon Bouchez, aligned early on core values: customer experience first, “one company” (no co-CEOs or optics games), frontloading pain, and focusing on the future — principles that guided decisions on structure, messaging and integration.

• Deal structure & negotiation – The merger was a stock deal with a 70/30 ownership split in Crossbeam’s favor, clean 1x preferred terms, and straightforward board composition; both founders pushed their investors to accept the 70/30 to avoid ego-driven haggling that could kill the deal.

• Executing the integration – To avoid “gun jumping,” they used clean teams and deal teams pre-close; post-close they messaged it as a merger (not acquisition), unified leadership under Moore as CEO and Bouchez as COO, right-sized headcount, chose Crossbeam’s backend as the single platform, adopted Reveal-inspired UX, and “crossboarded” all Reveal customers onto Crossbeam contracts and pricing.

• Results after one year – The combined company surpassed $20M ARR (approaching $25M), cut burn multiple from 5.9x to ~1.1x, lifted NRR from ~90% to ~105%, fully unified product/network/customers on “Crossbeam paper,” improved employee NPS by 20 points, and freed the roadmap to focus entirely on new product and GTM innovation.

— — — — — — — — — — — —

How Long Does It Really Take To Buy a Business In Canada?

For first-time buyers using bank debt to acquire a lower-middle-market business in Canada (sub-$50M revenue, typically $1–$10M EBITDA), the realistic journey is much longer than most expect. Median timelines are 12–18 months, with only a small minority of “clean,” well-prepared deals closing in under 10 months, and many stretching toward two years.

Key insights from the article:

• True target pool is tiny – While Canada has ~1.2M employer businesses, once you filter for size, owner age, willingness to sell, and standard acquisition criteria (industry, growth, customer concentration, add-backs, transferability), you’re often left with only 10–40 truly viable targets nationwide at any given time.

• Most LOIs don’t survive diligence – Roughly 80% of signed LOIs either die in confirmatory due diligence or close at a 15–40% discount due to issues like higher-than-disclosed customer concentration, aggressive revenue recognition, weak working capital, owner-dependency, hidden liabilities, or QoE reports 10–30% below seller numbers.

• Canadian-specific friction points – Bank and BDC debt approvals commonly take 90–150 days after an LOI, QoE reports are effectively mandatory (6–10 weeks and $35K–$75K), Québec brings extra French-language requirements, and July/August plus mid-December to mid-January are effectively dead zones for progress.

• What “fast” actually looks like – The top 5–10% of deals (7–10 months total) usually involve a known or warmly-introduced seller, clean financials with a recent QoE, mostly equity or pre-approved debt, and a highly motivated seller driven by health, divorce, or partnership disputes.

• Expectation reset for buyers – First-time, bank-debt-backed buyers should plan for 12–18 months and 3–5 LOIs before one closes; experienced operators or strategics in the same industry might achieve 8–12 months, with a realistic overall range of 9–24 months and anything faster being an exception, not the norm.

— — — — — — — — — — — —

Four Questions to Ask Yourself as a Searcher

Interest in ETA keeps rising, but very few prospective searchers ever close on a deal — and even fewer end up happy running the business they buy. Kaustubh Deo argues that failure often begins long before diligence, LOIs, or lending issues: many searchers never examine whether they actually want the realities of owning and operating a small business. These four self-reflection questions are meant to prevent wasted years and wasted money.

Key insights from the post:

• Net-worth reset risk – Most self-funded deals require personally guaranteed debt, meaning bankruptcy is a real possibility; if you can’t emotionally accept the idea of starting over after years of searching and operating, fear will block you from ever closing a deal.

• Family alignment is non-negotiable – Small-business ownership bleeds into every part of life; spouses and families must be fully aligned because the emotional and time demands will inevitably spill into relationships, parenting, and daily routines.

• Run toward ownership, not just away from your job – Disliking corporate life isn’t enough; searchers must articulate what they truly want (autonomy, financial upside, novelty, control) or they won’t have the resilience to push through the hardest parts of ETA.

• Know your relationship with teams and loneliness – Owners frequently struggle with imperfect teams and the isolation of leadership; success depends on genuinely liking people, tolerating wide ranges of competence, and building support systems outside the business.

• Reflection now avoids pain later – Honest answers to these questions can prevent 12–24 months of wasted search time and tens of thousands in deal costs, ensuring only those who will actually enjoy operating a small business pursue the path.

🧵 Online Highlights

I scroll, so you don’t have to.

Manufacturers could soon access $10M SBA loans as Washington backs onshoring…

Royalties, minimums, and SBA debt turn many franchisees into overworked, underpaid operators…

Here’s a counterpoint to the above post. Franchising is a distribution strategy, not a business model or magic ticket…

When sellers fight basic protections, they’re signaling post-close competition risk…

A single 25% customer can turn a “safe” 4.5× deal into a near-breakeven slog overnight…

New Stanford toolkit gives search fund boards a clearer playbook from day one…

🗓️ Events

• iGlobal Independent Sponsors & Capital Providers (Dec 9) - New York, NY

• Search Fund & Independent Sponsor Roundtable (Dec 17) - Philadelphia, PA

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

• SMBash 2026 (Apr 22-24) - Dallas, TX

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?

Share

Subscribe now

Let’s connect: LinkedIn, Twitter

In this week’s issue of What I Learned Last Week:

• 📰 Articles

• 🧵 Online Highlights

• 🤔 Other - What Searchers Ask Me

• 🗓️ Events

• ⚒️ Tools & Resources

• 💡 How I Can Help

This issue of The Business Inquirer is brought to you by DueDilio.

Don’t Risk Your Deal.
The wrong advisor can cost you time, money, and opportunity. DueDilio connects you with pre-vetted attorneys, due diligence experts, and deal advisors who know SMB acquisitions inside and out.

✔ 600+ transactions supported
✔ Independent professionals & boutique firms
✔ $500K–$25M deal sizes

👉 Get Matched Today

📰 Articles

I summarize, so you capitalize.

The Purchase Agreement: Your New Favorite 30-Page Romance Novel (Sort Of)

This article demystifies the purchase agreement for buyers of accounting practices, explaining how each section protects the deal and clarifies responsibilities. It emphasizes that understanding the agreement before signing is essential to avoid surprises, disputes, or post-closing regrets.

Key insights:

• Core Deal Terms – The first section defines price, included/excluded assets, and payment structure, with disclosure schedules determining what you actually get.

• Closing Logistics – “Sign now, close later” mechanics outline how the transaction unfolds over time and what each party must do leading up to closing.

• Seller Disclosures – Reps and warranties force sellers to confirm ownership, financial accuracy, and legal status, surfacing any hidden risks you should know before buying.

• Buyer Obligations – Buyer reps are brief but confirm legal capacity to enter the deal and disclose any relevant issues.

• Future Protections – Covenants cover non-competes, non-solicits, and cooperation obligations to prevent post-sale conflict and preserve client relationships.

• Risk Allocation – Indemnification terms decide who pays when pre-closing problems emerge later, including caps, baskets, and survival periods.

• Hidden Landmines – Boilerplate terms still carry high stakes, especially around signatures, enforcement, and clause interactions.

— — — — — — — — — — — —

How Fed Rate Cuts Are Shaping LMM M&A: Insights From Axial Dealmakers

Axial’s survey shows that the Fed’s recent rate cuts are beginning to restore confidence and improve financing conditions in the lower middle market, though most dealmakers expect the impact to build gradually through 2026. While cheaper debt supports valuations and buyer activity, respondents remain cautious about inflation risk, overleverage, and whether lower rates will meaningfully close the valuation gap.

Key insights:

• Gradual Market Momentum – About 70% of members expect rate cuts to influence activity, with most predicting visible effects in early-to-mid 2026 as optimism and early sector-specific movement emerge.

• PE & Platform Deals Benefit Most – Private equity buyers and platform acquisitions are viewed as the primary beneficiaries of cheaper debt, reflecting their reliance on larger, leveraged financing structures.

• Modest Valuation Shifts – Respondents foresee slight increases in seller expectations but doubt that lower rates alone will bridge the valuation gap, indicating deeper structural mismatches.

• Opportunities From Cheaper Capital – Buyers gain flexibility, more competition enters the market, and elevated IRRs and accessible debt support both buy-side and sell-side momentum.

• Risks in a Looser Environment – Dealmakers warn of inflation resurgence, potential Fed reversals, overleverage, and inflated valuations driven by intensified competition.

• Fundamentals Still Rule – Despite rate-driven tailwinds, members emphasize that a “good deal” still depends on strategic fit, financial strength, and operational fundamentals—not market cycles.

🧵 Online Highlights

I scroll, so you don’t have to.

Base your LOI on the CIM and only reprice when diligence reveals real changes…

Good discussion on the hidden cost of ‘modernizing’ a business that already works…

For buyers of SaaS businesses, defensibility & moat now matter more than code…

Demand is down, margins are collapsing, and SMBs are stuck in a pricing prisoner’s dilemma…

Why working capital can sink a new owner faster than the purchase price…

For searchers, popular sectors now draw PE-level interest at PE-level multiples…

Good discussion thread. From real estate to trades, operators report slowing demand across the board…

🤔 Other

What Searchers Ask Me

Every week at DueDilio, I speak with searchers at all stages of the journey. Many of the questions repeat, and so do the themes in my answers. I’m sharing a few of the most common below.

Q: I’m just starting out and looking at accelerator programs. Any advice?

A: Accelerators offer education, structure, community, and resources in exchange for a fee. You can get almost all of that on your own for free, except for the structure and accountability. If you already have business acumen, are organized, driven, and able to learn quickly, there usually isn’t a strong reason to spend ten to twenty thousand dollars on a program. That said, an accelerator can be a great fit for someone who wants a defined framework and consistent support throughout the process.

If you decide to pursue one, the only programs I fully recommend are Acquisition Lab and SMBootcamp. I strongly suggest avoiding Acquisition Ace.

These two articles may be helpful:

• Business Buying Programs: Are They Worth It?

• Are Acquisition Accelerators Right for You? Exploring Affordable Alternatives

Q: I just left my job to pursue EtA and want to build my deal team. Can you make some introductions?

A: Not yet. You’re getting ahead of yourself. Before thinking about a deal team, you should have the basics in place: a professional website and email, a defined buy box, a buyer profile, proof of funds, conversations with lenders or capital partners, a pre-approval letter, and at least some activity in your deal flow funnel. If any of those are missing, you’re too early.

Q: I hear you, but I want to be ready. Why not build the team now?

A: You’re still too early. Your only priority right now should be deal flow. Finding a good business is the hardest part of EtA, aside from actually running it. Expect to submit around one hundred LOIs over twelve to twenty-four months before one gets accepted. You don’t need a deal team for that stage.

A few other reasons:

• Service provider availability changes constantly. The attorney or QofE firm you meet today might be unavailable when you actually need them.

• The best vendor often depends on the industry and specific business. Different firms have different strengths.

• With DueDilio, assembling a deal team takes only a few days. There’s no advantage to doing it months before you have a live deal.

Q: How many deals should I be sourcing each week?

A: More than you think. If you aren’t reviewing at least a dozen opportunities a week, the chances of finding a good business drop quickly. The EtA funnel is brutally simple. The more deals you review, the more LOIs you send, and the more likely you are to get one accepted. Consistency matters more than intensity.

Q: What’s the biggest mistake searchers make when talking to brokers?

A: Lack of preparation. Most searchers ask generic questions, talk in circles, or haven’t done any homework on the listing. Brokers get hundreds of inbound messages each week. If you want to stand out, be specific, understand the business before the call, and follow up quickly. Don’t ask questions you can answer yourself from the CIM or the listing.

Q: How do I stand out as a buyer if there are so many other searchers?

A: Show that you are serious. Have a polished website, a real email address, a clear buy box, proof of funds, a lender relationship, and a crisp buyer profile. Respond fast, ask good questions, and don’t waste time. Sellers and brokers care about professionalism, reliability, and the ability to close.

Q: I’m worried about buying a business and getting stuck in a bad operator role. How do I avoid that?

A: Spend serious time understanding the day-to-day. Due diligence is not just about the financials or technology. If possible, talk to employees, customers, and vendors. Ask the seller what they do each week. Validate the level of owner involvement, and don’t rely on rosy descriptions. The biggest operator surprises come from poor diligence on people, processes, and workflow. You can fix numbers faster than you can fix culture and labor issues.

Q: What has changed in the EtA space over the last few years?

A: A few big trends stand out. These are “stream of consciousness” and in no particular order:

• Much greater awareness. There are far more resources, tools, and programs, for better and for worse.

• A large wave of corporate professionals entering EtA. Many are worried about job security in a world shaped by AI. The majority of my daily calls are with tech professionals who are financially prepared and organized.

• A wider gap between serious buyers and casual buyers who clicked an ad. Being prepared is a real differentiator.

• Business brokers are overwhelmed. Many buyers are unprepared, misrepresent their financial situation, or lack basic knowledge. Some of this is encouraged by certain online “gurus.”

• Valuations are rising. Demand continues to outpace supply, and private equity competes heavily with individual buyers. The so-called Silver Tsunami is not materializing in a meaningful way.

• More creative deal structures to bridge valuation gaps.

• More deals falling apart in due diligence. Sometimes it’s the findings, sometimes the seller gets cold feet.

• SBA loan defaults are increasing.

• Most deals result in buying a job, not passive ownership. It can be well-paid but it’s still a job.

• Franchises are under-explored. They are often a strong option for first-time buyers.

• Too few people consider starting a business versus acquiring one. Sometimes entrepreneurship is the better path.

• Deal fees are trending downward. Legal, due diligence, and advisory work is cheaper than it was a few years ago due to increased supply of professionals. DueDilio plays a role in that.

👉 Would love to hear what trends you’re seeing. Feel free to reply to this e-mail and let me know.

🗓️ Events

• University of Minnesota ETA Conference (Nov 21) - Minneapolis, MN

• RollUpEurope Serial Acquirers Summit (Nov 25) - London, UK

• Art Basel Miami 2025: Investor Summit (Dec 1) - Miami, FL

• iGlobal Independent Sponsors & Capital Providers (Dec 9) - New York, NY

• Independent Sponsor Symposium (Jan 29) - Miami, FL

• Independent Sponsor Summit & Awards (Mar 12-13) - Miami, FL

• New Mittelstand Summit 2026 (Apr 16) - Berlin, DE

How did you like this issue of the newsletter?

• 👍👍👍 Interesting & relevant

• 😐🙂 Eh - not sure.

• 👎 Not interesting or relevant

⚒️Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these are paid sponsors or affiliates of the newsletter.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

X5 Deals - Proprietary deal sourcing for a great price. They do the tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.

Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.

BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel.

Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.

💡 How I Can Help

Whenever you’re ready, here are a few ways for us to work together…

1. Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss

2. Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter

3. Assemble your M&A deal team with DueDilio

If you enjoyed reading this newsletter, why not share it?