🧐What I Learned Last Week
Week ending Friday September 9, 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!
I’m traveling over the next few days so I may not be able to write the Tuesday newsletter next week. We’ll be back to our regularly scheduled programming next Friday.
This issue of What I Learned Last Week is brought to you by DueDilio.
DueDilio is a leading online marketplace focused on M&A due diligence.
We connect business buyers, sellers, intermediaries, and private investors with pre-vetted due diligence service providers.
Our large and growing network of verified independent professionals, boutique and mid-size firms, and subject-matter experts specialize in finance, technology, legal, commercial, and other key areas of business diligence.
Submit your project. Review qualified proposals. Hire service provider.
📰 Articles
Jordan Novgrod of Small Business Acquisition newsletter was a DueDilio client and wrote a great post about optimizing deal flow. Helpful read for anyone who is currently in the search phase.
Looking back at my search, one of the mistakes I made was my broker outreach effort. This has become all the more apparent as more time passes and those brokers that I was reached through this method continue to send me their listings.
As described in these posts Broker Outreach, Broker Flyer, Email It’s Harder than It Looks, Emails are Flying, and Email Report Card, I wanted to get upstream of the deal flow so that I was not competing against as many other buyers. This concept was described in Buy Then Build, and seems ideal. Who wouldn’t want to get the first look at an opportunity?
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Guesswork Investing writes about the importance of setting the right KPIs for your business. In the post, he identifies some of the most common KPIs and how to manage them.
After year of being a consumer of KPI reports (while in the PE role), it’s been fun to flip to other side and actively manage & generate KPIs. It’s extremely tempting to manage to KPIs even though I know I shouldn’t. It’s hard to look away from KPI reports.
But at the end of the day, KPI reports serve to 1) get your arms around the business (actually understand how the business is doing), and 2) provide date to support proactive decision making.
Big Deal Small Business: Selecting KPIs to Run Your Business
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MidStreet M&A continues to put out great content. Below I’ve linked to a few of their latest articles which I thought were particularly relevant.
🧵 Twitter
Don’t buy a job, buy a business…
Great story…
Great tips for those buying a local business…
SBA is encouraging smaller business loans…
Cold calling works…
Tons of opportunities in acquiring accounting firms…
🤔 Thoughts, Events, Other
Valuations
During a recent interview, Juan Ignacio Garcia Braschi who’s the founder & CEO of Boopos had this interesting quote:
“We have adapted our credit policy and are being more conservative, lending lower amounts and being more selective. Our financing is still useful because M&A multiples have compressed, too, based on our database, at least by 20% to 30%.”
He’s specifically talking about online businesses. I’d be curious to see a breakdown of these numbers between SaaS and e-commerce. I know FBA valuations are down ~14% over the last few months.
Boopos on the move: Lending platform scores $58M Series A
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MicroAcquire Raising Prices
Looks like MicroAcquire is going premium or should I say “Platinum”. From a recent e-mail:
I’m excited to announce the launch of MicroAcquire Platinum, a new buyer tier for those interested in startups with over $250,000 in TTM revenue and exclusive Managed by MicroAcquire deals.
Users will have to pay $780 per year to get access to the juicy deals. If you’re interested in signing up, try using the code “PLATINUM20” to get 20% off the annual subscription (lifetime deal).
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Website Closers
After Tuesday’s newsletter, I received a few e-mails from subscribers outlining their negative experiences with Website Closers. The big issue seems to be with their lack of vetting. Below is one such example from a reader:
Also, on WebsiteCloser, I did not have the best experience either (based on 1 deal with them to be fair). It feels to me that they did not take the time to dive in the financials with the owner properly before going to market. And failed to present it in a digestable form for buyers. Which in turn made me loose time diving in.
And just getting them to respond was an issue at times.
The business brokerage industry is still a bit of a wild wild west. Feels like some sort of rating system would be helpful here. Just make sure to do your due diligence. Need help? Reach out to DueDilio.
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Business of VPNs
Michael Girdley kept seeing ads for VPN services. In his latest newsletter, he took a look at the business model.
The VPN business is crazy.
· Commodity Product: The underlying software to run one is all free and identical. Customers switch quickly and easily.
· Cheap to Deliver: Some services are profitable at $2-3/mth for unlimited traffic.
· LTV (Lifetime Value of Customers) is low. A new customer is worth $98 to you in the 2-3 years they’ll be around.
Why is every podcast sponsored by a VPN company?
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GTM
I recently ran across a great guide to go-to-market strategy in B2B. I put the PDF in a Google Shared drive for you. Link is below.
The Comprehensive Guide to GTM Strategy
🛠 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.
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. Local Boston company and I consider the founder (Adam Ray) a friend.
PrivSource - Deal aggregator for lower and middle-market listings.
The Website Flip - a newsletter that sends content sites for sale to your email inbox. They send deals each Wednesday and Friday.
Kumo - Find every deal in one complete platform. Spend less time sourcing deals and more time closing them. Kumo aggregates 180K+ business listings into one easy-to-use platform.
ProjectionHub - Access to 50+ CPA-developed financial projection templates. 25% discount using code “duedilio” at checkout.
Logology - Best automated logo & brand identity tool I’ve come across.
DeepBench - Access a cutting-edge expert network. $200 discount.
OpenPhone - The best VoIP phone solution that I have found. I use this for DueDilio. You get a $20 credit if you sign-up.
Eloquens - Knowledge marketplace. I’ve purchased a few templates from them.
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.
That’s 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.