What I Learned Last Week 12.15.2023
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
🧵 Best of X (Twitter)
🗓️ Events
⚒️ Tools & Resources
💡 How I Can Help
This issue of The Business Inquirer is sponsored by Smash.vc
Buying a business with the SBA?
Would having a capital partner help?
At Smash.vc, they do two things:
Buy minority stakes in existing small businesses.
Partner with entrepreneurs trying to acquire new ones.
If you're actively looking to buy a cash-flowing business using an SBA loan, hit them up if you'd like a partner.
They contribute capital, give advice, or help with growth when asked... but stay out of the way the rest of the time.
Silent partners there to help when necessary, nothing more.
If interested👉 go say hi.
📰 Articles
Wrapping up 2023
The article by Bloom Equity Partners provides a comprehensive review of the year in the Private Equity, Enterprise Software, and Technology. Here are some key insights:
Software M&A Outlook: Highlights from Axial’s 2023 report showed strong interest in sectors like Cybersecurity, HealthTech, FinTech, and AI, with diminished capital access creating attractive opportunities for buyers.
Private Equity in Tech: The Bain PE Report indicated a strong trend towards software investments, showcasing their resilience and less volatility compared to public tech companies. Private equity gained an edge over corporate buyers, leading many major IT M&A deals.
SaaS Market Trends: Despite market challenges, the SaaS sector saw rising deal volumes, with private equity playing a significant role. The SaaS Trends Report indicated increased scrutiny in SaaS purchases, with a focus on efficiency and cost-effectiveness.
Public SaaS Industry: Public market data provided insights into valuation multiples, operating metrics, and company rankings in the SaaS domain.
— — — — — — — — — — — —
US PE Middle Market Report
PitchBook released its Q3 Middle Market Report that breaks down the factors contributing to the latest headwinds experienced by the middle market.
The lethargy in the megadeal universe eventually got to the PE middle market in Q3, which experienced a six-year low in deal volume and a roughly 26% QoQ decline in exit value. Deal multiples for PE transactions targeting small to medium-sized companies contracted from recent peaks.
Fundraising activity also cooled as the value of closed funds in Q3 was down
7.3% sequentially to $22.8 billion, which is below the historical norm of $25 billion to $30 billion per quarter.
— — — — — — — — — — — —
IBBA Market Pulse
IBBA and M&A Source released their Q3 survey results that highlight the deal-making activity in the Main Street and lower middle markets.
A few charts that stood out to me…
— — — — — — — — — — — —
15 Drivers of Working Capital
The article by CFO Secrets offers an in-depth analysis of working capital management. It identifies and discusses 15 key drivers that significantly influence a company's working capital. The focus is on optimizing the Cash Conversion Cycle (CCC) by effectively managing components like Days Sales Outstanding (DSO), Days Inventory Outstanding (DIO), and Days Purchases Outstanding (DPO). The article provides strategies to enhance business processes in sales, inventory, and payment terms, aimed at improving overall cash flow.
🧵 Best of X (Twitter)
🗓️ Events
University of Michigan ETA Conference (Jan 18-19) - Ann Arbor, MI
MIT ETA Conference (Feb 16) - Cambridge, MA
Wharton ETA Club (Spring 2024) - Philadelphia, PA
Capital Camp (May 21-24) - Columbia, MO
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 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 outreach and send you relevant, actionable deals directly into your inbox.
Interexo - Curated deal flow and data solutions. Since 2016 Interexo has been M&A industry’s trusted source for deal flow, with extensive coverage of industry data, from Private Equity to Lenders, Hedge Funds, Brokers, and more.
Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($500k - $10m revenue) considering exits. All deals are sourced by the Rejigg team. Their team adds 7-10 new deals each week
Acquisition Lab - The Premier Accelerator for Buying a Business created by Walker Deibel, Author of Buy Then Build: How Acquisition Entrepreneurs Outsmart the Start-up Game. They combine world-class education, a vetted community, extensive group coaching, and resources to provide the first do-it-with-you buy-side advisory service.
Smash.vc - Whether you're looking to sell minority stakes in your business to take some chips off the table, looking for a partner to acquire an asset, or needing capital to complete an SBA deal, we'd love to chat with you.
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.
Search Fund Coalition - community for the Entrepreneurship Through Acquisition ecosystem. Monthly events and meetups for acquisition entrepreneurs.
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
If you enjoyed reading this newsletter, why not share it?