What I Learned Last Week 12.13.2024
Curating the best M&A, SMB, and EtA-related content since 2020.
Hello Friends!
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 sponsored by:
Close Your Deal Quickly and Efficiently: M&A Legal Solutions Integrating Automation and Project Management
At Sterrett Law, we’ve developed a streamlined process using cutting-edge automation and project management techniques to maximize speed and efficiency. Using templates and a client-centered collaborative process we’ll keep your deal on track and on time.
Ready to make your next move? Schedule your free consultation today!
📰 Articles
I summarize, so you capitalize.
What Buyers Want: Deal Demand by EBITDA Range
The article from Axial examines buyer demand in lower middle-market transactions by EBITDA range, focusing on industry and buyer-type preferences. It highlights how deal intents on the Axial platform reveal where buyers are most active.
Key insights include:
EBITDA Sweet Spot: $1M-$5M EBITDA range attracts the highest buyer interest.
Industry Focus: Tech dominates in smaller EBITDA ranges, while Food & Hospitality sees strong demand for $3M-$10M+ EBITDA businesses.
Buyer Types: Private Equity prefers $5M-$10M deals; Individual Investors target sub-$1M; Independent Sponsors and Family Offices show broad interest across ranges.
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The Ultimate Post-Acquisition Playbook: Introduction
The article from Local Legends introduces a post-acquisition playbook designed to guide new business owners through the critical first year after buying a company. It emphasizes shifting from theoretical planning to active ownership by stabilizing the business, building trust, and avoiding common pitfalls like premature growth and cultural misalignment.
Key insights include:
Mindset Shift: Transition from evaluator to hands-on owner.
Common Mistakes: Avoid rushing changes, neglecting financial health, and overloading yourself.
Stabilization Focus: Prioritize strengthening core operations before scaling.
Year-Long Guide: A step-by-step roadmap for business success.
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Entrepreneurship Through Acquisition: Should You Buy a High Growth Company?
The article from Langston Tolbert explores the pros and cons of acquiring high-growth companies through ETA. While high-growth businesses promise significant returns, they come with challenges like demanding management, capital needs, competitive pressures, and financing hurdles. In contrast, low-growth businesses offer stability, predictable cash flow, and loyal customer bases, making them safer investments for risk-averse entrepreneurs.
Key insights include:
Customer Complexity: Managing new vs. loyal customers is tricky.
Management Demands: High growth needs expert management.
Financial Strain: Rapid growth consumes capital quickly.
Competitive Pressure: Success attracts competitors.
SBA Loan Issues: Banks prefer established profitability.
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3-Month Search Update
A user on Searchfunder shared their update 3-months after starting their search. This is a great data-driven illustration of how many deals you need to review before getting to an LOI.
🧵 Online Highlights
I scroll, so you don’t have to.
Broken deals sting, but they’re part of the game. Stay resilient, control what you can, and keep moving forward…
Read this if you’re thinking of acquiring an Amazon business…
Pre-close models are great, but real cash flow management starts post-close…
Acquiring a business isn’t just about numbers—it’s about people. Understanding what drives and retains the workforce can differentiate success and failure…
The harsh reality of pursuing a roll-up strategy in the accounting industry…
A sell-side QofE isn’t just about numbers—it’s about controlling the narrative. Disclose early, position favorably, and move fast to keep leverage in your corner…
Seller equity rollovers are now allowed in asset sales, reducing liability while retaining seller involvement—a game-changer for deal structuring…
Non-owner spouses may no longer need to co-sign unless assets are shared, and merchant cash advances are now refinance-eligible…
🗓️ Events
SBIA Northeast PE Conference (Jan 8-9) - New York, NY
UM Ross EtA Conference (Jan 23-24) - Ann Arbor, MI
Babson College EtA Conference (Feb 7) - Boston, MA
SBIA Southeast PE Conference (Feb 13-14) - Nashville, TN
MIT EtA Conference (Feb 28) - Cambridge, MA
iGlobal Independent Sponsors (Mar 4-5) - Miami, FL
SBIA West Coast Capital Summit (Mar 25-27) - Los Angeles, CA
HoldCo Conference (Mar 31-Apr 3) - Sundance, UT
🎵 Listening: “When I Get My Hands On You“ by The New Basement Tapes 🎵
How did you like this issue of the newsletter?
⚒️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.
Kumo - 100,000+ deals sourced from thousands of brokers and marketplaces. Plus, AI-powered listings, robust data & analytics, and more.
DealFlowXchange - The premier private capital funding community for raising and deploying capital. Use discount code DUEDILIO for 20% off your lifetime membership.
Sterrett Law - At Sterrett Law, we offer Manhattan and Boston experience at Vermont prices. Specializing in deals under $10 million, we're your go-to partner for navigating the complexities of mergers and acquisitions without the hefty price tag
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.
Secret - Say goodbye to overspending on SaaS. With Secret, you get access to up to $1,000,000+ in savings on the best software to run your search, operate, and scale your business.
Deal Sourcing Guide - a comprehensive list of business marketplaces, brokers, deal origination firms, and more.
💡 How I Can Help
Whenever you’re ready, here are a few ways for us to work together…
Schedule 1:1 consulting on deal sourcing, due diligence, M&A ecosystem, newsletters, entrepreneurship, or anything else you’d like to discuss
Promote your brand to business buyers, investors, SMB owners, and other M&A participants by sponsoring this newsletter
Assemble your M&A deal team with DueDilio
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