🧐 What I Learned Last Week
🧐 What I Learned Last Week
Week ending Friday, July 8, 2022
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
As the founder of DueDilio, I try to keep up with trends in the Business/Professional Services industry. I recently came across two great reports highlighting the latest trends and M&A activity in the sector.
Corporate Finance Associates - Business Services Industry Report
SDR Ventures - Business Services Report (this one is more around home services - still interesting)
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Red Forest Capital published their July 2022 update where they highlight market trends and link to a lot of industry reports (I found the two above in their newsletter).
As your deals advance, consider how economic uncertainty should be reflected in the purchase price or deal terms. Following are a few examples;
Higher Transaction Costs are expected due to higher interest rates and increases in the cost debt financing. According to GF Data, senior debt declined slightly during 2022 Q1 with subordinated increasing during the same period. Greater use of sub-debt caused a price jump with an 11.4% average coupon for sub-debt during 2022 Q1.
Contingent Payments and a smaller proportion of consideration paid to sellers at Closing. Expect earn outs, seller notes and equity rollovers to command a larger portion of the purchase price.
Longer Diligence. Explore ways to ‘front-load’ diligence or extend the exclusivity periods to allow time for more detailed due diligence and negotiation.
Red Forest Capital - July 2022
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Middle Market Growth published a great summary of the latest JP Morgan middle-market survey.
Recent surveys find middle-market companies remain pessimistic about the economy, but optimistic about their own businesses. JPMorgan Chase’s head economist explains what's behind this dichotomy
The Silver Lining of the Mid-Market’s Gloomy Economic Outlook
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Bessemer Venture Partners published a report on the India SaaS market. A bit off-topic for the newsletter but I thought it’s an interesting read on a rapidly growing sector.
Software-as-a-service continues to accelerate around the globe as industries and businesses shift toward cloud-based environments. With digitization increasing year-over-year due to an increasingly hybrid world, SaaS startups founded in India have seen significant growth in recent years. Projected to be valued at $50 billion by 2030, India’s SaaS market has reached a critical inflection point as venture dollars deployed in the region reached $4.8 billion in 2021.
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Insight Partners is a management consulting firm focused on helping startups scale. They published an outline of a 1-day strategy sprint that can help business owners think through challenges.
The 1-Day Strategy Sprint: Framework, Process, and Tools
🧵 Twitter
Insightful thread on some of the regulations around business brokerage…
Great basic questions to ask when evaluating an acquisition target…
One of the great things about the #SMBTwit community is it encourages debate and discussion. This is a good one around HoldCos vs. Roll-Ups…
Watch out for these…
Appears the answer is “No”…
🤔 Thoughts, Events, Other
Podcast Appearance
I had the pleasure of sitting down with Seth Greene and his RIA Advisor podcast. We discussed the founding story of DueDilio, who we serve, and how we add value.
You can find your podcast on: iTunes Spotify Stitcher TuneIn iHeartRadio
🛠 Tools & Resources
I want to share some tools & resources that I have found helpful. Please note that some of these may contain affiliate links. This means that I may receive compensation if you sign-up and use them.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
Curators - Proprietary deal sourcing. You need targets that fit your investment criteria, and Curators delivers week after week - we even update your personalized database on a daily basis with new information on best-fit targets.
BizNexus - Proprietary deal flow, deal aggregator, and exit prep. Local Boston company and I consider the founder (Adam Ray) a friend.
PrivSource - Deal aggregator for lower and middle-market listings.
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 VoIP phone solution that I have found. I use this for DueDilio. You get a $20 credit if you sign-up.
Eloquens - Knowledge marketplace. I’ve purchased a few templates from them.
Deal Flow Scout - Peer-to-peer deal flow exchange. Free, open, transparent.
Deal Sourcing Guide - A directory I put together of online marketplaces, brokers, DFY deal flow, and more.
That’s all for this issue of What I Learned Last Week!
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Important Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. This newsletter may link to other websites and certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, it has not been independently verified. The Business Inquirer makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. References to any companies, securities, listings, investments, or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any business, tax, or investment decisions. Content in this newsletter speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.