đ§What I Learned Last Week
đ§What I Learned Last Week
Week ending Friday, May 20, 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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Hello Friends!
This issue of The Business Inquirer is brought to you by DueDilio.
DueDilio is an expert network focused on M&A due diligence.
We connect business buyers, sellers, intermediaries, and private investors with quality, pre-vetted due diligence service providers.
Our deep network of independent professionals, boutique and mid-size firms, and subject-matter experts specialize in finance, technology, legal, and other areas of business diligence.
Submit your project. Review qualified proposals. Hire diligence provider.
đ° Articles
Middle Market Growth published an interesting article on how PE firms build and utilize their own executive networks. Very interesting read. I think there may be an opportunity to do something similar in the SMB space.
Increasingly, middle-market private equity firms are creating pools of talented leaders, known as âexecutive networks,â from which they can hire people into leadership positions at the businesses they invest in â before a transaction closes. This tactic proves management isnât always an afterthought. Indeed, middle-market firms are finding that this approach gives them an edge.
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Harvard Business Services is a popular Delaware registered agent service. They have an excellent blog with a series of posts about âSelling Your Small Businessâ. The latest post talks about payment terms such as holdbacks, escrows, and earnouts.
This Part IV of the Selling Your Small Business series of posts discusses three features relating to the payment of the purchase price for a business: holdbacks, escrows and earnouts. A holdback is the retention of a portion of the purchase price until the occurrence of some event or the expiration of a period of time; an escrow is akin to a holdback, except that the retained amount is placed in escrow with a third-party agent. An earnout refers to a deferred portion of the purchase price the payment of which is contingent upon the business meeting pre-selected financial and/or non-financial milestones.
Payment Terms: Holdbacks, Escrows and Earnouts
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Daily Mail wrote an article about a 2019 study that discovered what everyone in the EtA space already knows - the typical millionaire is a hard-working, blue-collar business owner and not some tech bro.
Author Seth Stephens-Davidowitz wrote about the research in a New York Times op-ed piece
 He highlighted a study from 2019 that found that the typical rich American is the owner of a 'regional business,' like an 'auto dealer' or a 'alcohol and soft drinks distributor'
While doing research for his book, he was shocked to learn that more than 140K Americans who earn more than $1.58M per year own 'unsexy' businesses
Stephens-Davidowitz is the author of 'Don't Trust Your Gut: Using Data to Get What You Really Want in Life'
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Maverick newsletter takes a deeper look at raising a traditional search fund and why it may be better than alternatives.
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Axial published their Q1 2022 Pursuits Report. It offers a snapshot of how Axialâs thousands of active members are navigating the shifting landscape. It also represents a proxy of the broader lower middle market, which may not enjoy the same transparency as the larger deal realm.
Lower Middle Market Pursuits: Q1 Deal Flow Defies the Odds, Underscoring LMM Stability
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BDO published an article outlining the impact that rising inflation and interest rates are having on TMT M&A valuations.
HOW INTEREST RATES, INFLATION, AND GEOPOLITICAL UNCERTAINTY INFLUENCE TMT M&A VALUATIONS
𧾠Twitter
Searching for an acquisition doesnât have to take long. The combination of preparation, action, and luckâŚ
Mastering cold email is a superpowerâŚ
Tuck-in acquisitions and how to figure out when itâs rightâŚ
Hereâs a business opportunityâŚ
Great step-by-step summary of the process and available resourcesâŚ
Good motivation for possible tough times aheadâŚ
A reminder that business ownership is not all champagne & caviarâŚ
đ¤ Thoughts, Events, Other
Due Diligence
As the owner of DueDilio, I was invited to write a guest article on the topic of due diligence for Acquisition Aficionado Magazine. The article I wrote highlights the ten key questions you should be asking before hiring an M&A due diligence service provider.
You can use the link below to access the full magazine issue for free. My article begins on page 44: https://acquisitionaficionado.com/
đ Tools & Resources
These are tools & resources that I personally use or have used. They may contain affiliate links so Iâll get a few pesos if you sign-up.
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.
PrivSource - Deal aggregator for lower and middle-market listings.
ProjectionHub - Access to 50+ CPA-developed financial projection templates. 25% discount using code âduedilioâ at checkout.
Logology - Best automated logo & brand identity tool Iâve come across.
DeepBench - Access a cutting-edge expert network. $200 discount.
OpenPhone - The best business phone solution that I have found. $20 credit.
Eloquens - Knowledge marketplace. Iâve bought a few guides and templates here.
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.
Thatâs 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.