What I Learned Last Week 3.21.2025
Curating the best M&A, SMB, and EtA-related content since 2020.
Hello Friends!
Before we jump into today’s issue, I’ve got some exciting news to share. I just finished updating The Deal Sourcing Guide for 2025! I’ll be sending out a formal announcement next week, but I wanted you to be the first to get access…
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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 brought to you by:
Connecting Deal Sponsors with Investors
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📰 Articles
I summarize, so you capitalize.
The Next Billion-Dollar SMB Rollup: AI's Role in Industry Consolidation
The piece published by Rishi S. on LinkedIn explores how artificial intelligence is revolutionizing SMB rollups, transforming a traditionally risky consolidation strategy into a more scalable and efficient model. Drawing parallels to past successes like XPO Logistics, the article argues that AI enhances value creation through faster integration, data synergies, and labor automation. Industries with fragmented markets, data-rich operations, and high labor costs—such as healthcare, law, accounting, and field services—are especially ripe for AI-powered consolidation.
Key insights include:
AI reduces integration costs by 15–30% and accelerates post-merger timelines by seven months on average.
Fragmented, process-heavy industries with limited major players are ideal targets for AI rollups.
Data aggregation across acquisitions creates compounding value and competitive moats.
Labor-intensive sectors benefit most from AI automation, improving margins and efficiency.
Smart capital allocation and leveraging AI can unlock multiple expansion and outsized investor returns.
Early movers stand to gain the most, acquiring valuable assets before AI-driven premiums take hold.
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Why Even Use an Attorney for a Small Business Deal?
The article by attorney David Sterrett emphasizes the critical role attorneys play in small business deals, highlighting that even seemingly simple transactions can involve hidden risks. Legal expertise ensures proper due diligence, compliance, and contract drafting, ultimately protecting both parties from future disputes and financial pitfalls.
Key insights include:
DIY agreements often miss key legal nuances and can lead to serious liabilities.
Attorneys help uncover hidden risks like debts, lawsuits, or tax obligations.
Legal counsel provides negotiation leverage and helps secure better terms.
Regulatory compliance is essential, even for small transactions.
Well-drafted contracts significantly reduce the risk of future disputes and litigation.
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2024 Florida Sponsor Report
This report from investment banking firm Cassel Salpeter & Co is full of great data points about the Florida M&A market.
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Insights From The Top Technology Dealmakers
The report from Axial compiles insights from top M&A professionals active in technology, outlining current sector activity, valuation trends, and key challenges. Enterprise software and IT services are currently the most active and valued sub-sectors, while hardware technology sits at the bottom in terms of EBITDA multiples. Cybersecurity and managed service providers are leading areas for deal flow. Despite optimism around AI, it also poses underwriting and regulatory challenges for buyers.
Key insights include:
Enterprise software commands the highest valuations, with EBITDA multiples of 10–14x.
IT services valuations vary widely (4–10x) due to differing revenue models and margins.
Hardware tech has the lowest multiples (2–6x) due to high operational costs.
AI, cybersecurity, and talent scarcity are the biggest challenges in tech M&A today.
Concerns around AI include regulation, disruption to incumbents, and integration uncertainty.
Opportunities lie in AI, near/offshoring, healthcare data, cybersecurity, and consolidating fragmented markets.
The top firms were ranked using deal flow metrics from Axial, including buyer interest and transaction completion rates.
🧵 Online Highlights
I scroll, so you don’t have to.
Owning 100% of the business loses its shine when fatigue sets in — many entrepreneurs find that scaling with partners beats grinding it out alone…
Franchise success isn’t about hype — it’s about doing the boring, thorough due diligence others skip…
SMBInvest is here to bridge the capital gap — bringing searchers and investors together to get more cash-flowing deals done…
Most SMB buyers end up buying a job — and it turns out, that makes you a far better operator…
Great SMB deals don’t grow on trees — dig deep for high-margin, low-capital gems that deliver outsized ROIC…
Addbacks can boost EBITDA and make a deal shine but don’t misuse them…
🗓️ Events
SBIA West Coast Capital Summit (Mar 25-27) - Los Angeles, CA
London Business School EtA Conference (Mar 28) - London, UK
HoldCo Conference (Mar 31-Apr 3) - Sundance, UT
SMBash (Apr 2-4) - Dallas, TX
NOVA SBE EtA & SF Conference (Apr 3) - Carcavelos, Portugal
2nd Annual UCLA ETA Search Fund Roundtable (Apr 9) - Los Angeles, CA
M&A Launchpad Conference (May 3) - Houston, TX
Mittelstand Summit 2025 (May 20) - Berlin, Germany
🎵 Listening: “It Feels So Good“ by Matt Sassari, Hugel, Sonique 🎵
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.
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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