What I Learned Last Week curates the most interesting content relating to business acquisitions, operations, entrepreneurship, finance, and more. WILLW is a publication of The Business Inquirer.
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📰 Articles
Middle Market Growth published a 2022 guide to dealmaking. It’s a 116-slide presentation that outlines key trends for 2022. I highly recommend checking it out.
Thirty-six percent of survey respondents said that deal flow quality and quantity was the primary variable that influenced their positive outlook on M&A. Dry powder and credit market conditions came in second at 22%, while valuations and seller expectations were in third place at nearly 17%.
I’ve been a big fan of Niall Doherty’s eBiz Weekly newsletter. Go subscribe if you haven’t yet. There are a couple of interesting links that I want to highlight from the latest issue.
Hacker News has a great “show and tell” thread on side projects that are making at least $500/month. There are a couple of really good ones in there like a coffee farm, ad blocker app, wedding place card maker, and more. Great thread if you’re looking for ideas and inspiration. Ask HN: Those making $500/month on side projects in 2021 – Show and tell
Searchfunder has a great member post from someone who just closed their first acquisition a few months ago. It’s a reflection on the acquisition process, what went right, what went wrong, etc. Talks about the LOI, due diligence, financing, and other stages of the acquisition process. Highly recommend reading this one.
365 Holdings is a very respected vertically integrated holding company of DTC brands. This week they released their 2021 Annual Letter.
2021 proved to be a year of headwinds from big tech. The tracking changes forced on the Ad Tech ecosystem by Apple’s iOS updates have made decision-making much more difficult. What used to be cut-and-dry math to measure performance became blurry, and decision-making around web analytics and marketing attribution got much more difficult. We have invested heavily into data integrity resources and are now ending the year with a much more stable tech stack to make decisions with (hats off to Elevar, Nautilus, WickedReports, and Chris for quarterbacking this!). Our marketplace business grew this year, both on Amazon and elsewhere, but it felt like pushing a boulder uphill all year long. From inventory issues and platform errors to the setup and integration of ChannelAdvisor, each step forward felt like it was the net of four steps forward and three steps backward.
Southward Financial writes about the difference between EBITDA and Cash Flow.
If you spend much time at all reading about business values, you’ll quickly run across the terms “EBITDA” and “cash flow.” In many cases, they seem to be used interchangeably. But can they really be used in the same ways?
In this post, we’ll help you better understand EBITDA vs cash flow. Hopefully, the next time you come across either term, they won’t be confusing.
Crunchbase has an article about integrating company culture after an acquisition.
It’s widely understood that about half of America’s marriages now end in divorce. (Actually, the divorce rate has fallen in recent years.) What’s less well-known is that, as with marriage, a roughly similar proportion of corporate mergers and acquisitions—40 percent—also fail to fulfill the hopes of those who enter them.
What’s the reason for the iffy prospects for M&A success? In a nutshell: It’s placing your trust in hope instead of doing your homework.
In my experience, few companies do mergers and acquisitions well. Too many lack a proactive workforce integration plan. Once they come to an agreement they tromp on the throttle and race ahead.
OpenView published an interesting guide on creating a GTM strategy if your end market is developers. It’s a 79-page presentation with concepts and case studies that are applicable across other end markets.
Developers are a tough crowd.
They have limited time, they don’t like to be sold to, and they certainly don’t pick up the phone. Painfully aware of this reality, technical founders have become anti-marketing and sales. And yet companies like Stripe, Snyk, and MongoDB are killing it (we’re talking nearly $400 billion in market value) with developers as their core audience.
Is there a secret sauce? Yes—and it can be replicated.
MidStreet M&A writes about the topic of post-sale training and support from a seller’s perspective. This is a good read for both buyers and sellers.
You just sold your business… congratulations! Now you can move on to the next chapter of your life, right?
Well, not so fast. Chances are, you’ll be spending a bit more time in your business as a consultant or employee to help the buyer get started.
You may be excited about the prospect of training the buyer and setting your business up for future success. Or, you may be anxious to move on after many years of hard work.
No matter which camp you’re in, I urge you to read further. Employment and consulting agreements have financial, legal, and emotional implications that need to be considered. The more you educate yourself now, the better prepared you’ll be when dealing with actual offers.
These are tools & resources that I personally use or have used. They may contain affiliate links so I’ll get a few pesos if you sign-up.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
BizNexus - Proprietary deal flow, deal aggregator, and exit prep.
PrivSource - Deal aggregator for lower and middle-market listings.
Calendly- Leading scheduling platform to easily schedule meetings without the back and forth. I’ve been using it for several years now. Free 14-day trial.
ProjectionHub - Access to 50+ CPA-developed financial projection templates. 25% discount using code “duedilio” at checkout.
Logology - Best automated logo & brand identity tool I’ve come across.
DeepBench - Access a cutting-edge expert network. $200 discount.
OpenPhone - The best business phone solution that I have found. $20 credit.
Eloquens - Knowledge marketplace. I’ve bought a few guides and templates here.
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