🧐 What I Learned Last Week 3.31.23

The best M&A, SMB, and EtA-related content for this week.

Mar 31, 2023

Hello Friends!

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📰 Articles

Gut Reaction Deal Math

This post discusses how to evaluate deals in small businesses. The author suggests that the best way to evaluate a deal is to use a simple formula that takes into account the return on investment (ROI) and the time it takes to achieve that ROI. The author also provides some tips on how to negotiate a deal and how to avoid common mistakes. Finally, the author concludes by saying that evaluating deals is an art, not a science and that it takes practice to get good at it. (summarized by AI)

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Buying a Business: A Year and a Half Searching, Lessons Learned so Far

The article is about Tim’s experience in searching for a business to buy in British Columbia and Alberta. He shares his lessons learned in the search for a business to buy, including the importance of keeping your job, being adaptable with your target, the loneliness of the process, the need to be a salesperson, and the importance of being genuine and building relationships. He emphasizes the risks of using deceptive strategies and encourages a focus on quality connections. (summarized AI)

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Let me know what you think of these AI-generated summaries. Are these helpful?

🧵 Best of Twitter

A few points about commercial cleaning business…

Dane Fossee @danefossee

We invested passively in a commercial cleaning biz in 2018. It’s grown from 5 --> 100 team members. Twitter is full of cleaning bros - low cost of entry + rec rev is attractive. They’ll soon discover it’s a HARD biz. Most should avoid commercial cleaning like the PLAGUE.… https://t.co/P7ynUUjyUt

Great discussion around legal due diligence in M&A…

Eli Albrecht @Eli_Albrecht

For years I represented private equity in billions of dollars of M&A transactions. Here are things the pros do that #searchfunds and #SMB buyers should know. You must do legal diligence, but legal due diligence kills deals, for two reasons: 1) Legal diligence causes seller… https://t.co/ElS9cTtosM

When deciding between self-funded and traditional search, using OPM makes traditional an attractive option…

Derek Turner @AZ_SMB

Traditional Search Funds get a lot of grief on SMBTwit. I have my issues with the model, but after doing Traditional and then Self-Funded, I still highly recommend Traditional. Here’s are 6 reasons why, despite its flaws, Traditional Search is awesome. 🧵👇

Key points of the latest Search Fund paper from Yale on when to walk away from an underperforming acquisition…

Justin Vogt @J_M_Vogt

Lots of talk about all the wonderful things that can happen when you pursue a search fund, but what if things don't go according to plan... "When to Give Up on Your Search Fund Dream"

Make sure your SBA loan doesn’t get delayed. Great tips in this thread…

Eric Hsu @lawyer4SMBs

Buying a business using SBA funding? Missing small details can have big consequences. After closing 30+ deals, I’m sharing 7 details that I most frequently see missed. Skip any of these and your deal WILL get delayed. This thread could save you thousands of dollars. 👇🧵

The personal guarantee (PG) in an SBA loan often presents a mental roadblock. It shouldn’t be…

Clint Fiore 🛩 🦬DM for Biz Deals @ClintFiore

Here's why the required SBA PG (Personal Guarantee) is such an asymmetric bet with relatively small risk and huge reward. A thread 🧵

🤔 Thoughts, Events, Other

⚒️ Tools & Resources

I want to share some tools & resources that I have found helpful. Please note that some of these may contain affiliate links. This means that I may receive compensation if you sign-up and use them.

PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.

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. Local Boston company and I consider the founder (Adam Ray) a friend.

X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.

Import Dojo - a newsletter that sends eCommerce and Amazon FBA businesses for sale to your email inbox. They send deals each Wednesday at 9:00 AM CST.

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.

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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.

The Business Inquirer