What I Learned Last Week 1.31.2025
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
🤔 Other - Owner Staying Post Sale
🗓️ Events
⚒️ Tools & Resources
💡 How I Can Help
This issue of The Business Inquirer is brought to you by:
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📰 Articles
I summarize, so you capitalize.
Market Reports
FE International has started to update some of its industry reports for 2025. Their reports include analysis of global industry trends as well as industry-specific M&A activity.
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The DD-Dance
The article from CFO Secrets provides a practical guide to successful Financial Due Diligence (FDD), emphasizing the importance of controlling advisors, scope, and fees to avoid excessive costs and delays. It outlines eight key steps for setting up an FDD advisory engagement, from assessing deal risks to negotiating fees and finalizing agreements. The article also explains the differences between Reliance and Assistance engagements, helping businesses decide the best approach based on risk tolerance and budget.
Key insights:
• Importance of controlling due diligence scope and costs.
• Eight steps for structuring FDD engagements.
• Differences between Reliance and Assistance models.
• Risks associated with poor FDD planning.
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The Definitive Guide To Understanding The Step-Up and Self-Funded Investor Terms
The post from Buy Small Sell High explains the "Step Up" concept in self-funded search deals and compares them to traditional private equity structures. It highlights how investor ownership varies based on capital structure and leverage. The author argues that a 2.0x Step Up should be the market standard, ensuring fair risk-adjusted returns. The piece also discusses how to adjust Step Up for over- or underpriced deals and why preferred returns matter less than ensuring the right equity split.
Key insights:
• Step Up adjusts for capital structure differences.
• 2.0x Step Up is a fair benchmark.
• Adjusted Step Up accounts for valuation discrepancies.
🧵 Online Highlights
I scroll, so you don’t have to.
SMB acquisitions are getting more and more competitive. We’re seeing PE and even VCs start to go after this space…
Buying an SMB? Expect to suck at first—then suck again as you grow. The key is to pick the right business, get a coach, and embrace the grind…
The right real estate loan depends on your goals…
AI in Private Equity? The real opportunity is in the lower-middle market. Compliance, customization, and quality trump price—AI agents that nail this will print money…
Lenders aren’t just issuing term sheets—they’re betting on you. Want the best deal? Build a relationship, be upfront about priorities, and don’t just rate-shop…
Roll-ups work—if you can execute. Overpaying a little on deal 1 can be strategic, but only if you can land deals 2, 3, and 4…
ETA success isn’t about perfection—it’s about action. Stop overanalyzing, start making offers, and embrace the challenge. The 'perfect' deal doesn’t exist—just get in the game…
🤔 Other
Not Wanting to Continue Post-Sale
The Reddit post features a CEO who owns 25% of their company and is considering stepping away post-sale to private equity due to burnout. They are concerned that revealing their departure intentions could jeopardize the deal. Comments suggest discussing the exit early with advisors to manage buyer expectations and exploring firms comfortable with leadership transitions. A strong management team can help ease concerns, and structuring a phased exit may maintain valuation while allowing a smoother transition.
Key insights:
• Transparency with advisors helps manage risks.
• PE firms value leadership continuity but can accommodate transitions.
• A strong team can mitigate CEO departure concerns.
🗓️ Events
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
SMBash (Apr 2-4) - Dallas, TX
2nd Annual UCLA ETA Search Fund Roundtable (Apr 9) - Los Angeles, CA
🎵 Listening: “Kiss of Life“ by Peace Control, Badway, Kinder 🎵
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.
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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