What I Learned Last Week 5.3.2024
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
🧵 Best of X (Twitter)
🗓️ Events
⚒️ Tools & Resources
💡 How I Can Help
This issue of The Business Inquirer is sponsored by:
Close Your Deal Quickly and Efficiently: M&A Legal Solutions Integrating Automation and Project Management
At Sterrett Law, we’ve developed a streamlined process using cutting-edge automation and project management techniques to maximize speed and efficiency. Using templates and a client-centered collaborative process we’ll keep your deal on track and on time.
Ready to make your next move? Schedule your free consultation today!
📰 Articles
M&A Fee Guide 2023-2024
The Axial 2023-2024 M&A Fee Guide discusses recent changes in fee structures used by investment banks in middle-market M&A, highlighting a shift towards more predictable revenue models incorporating retainer fees alongside success fees. The guide, based on a survey of over 200 industry professionals, shows that many banks have adjusted their strategies in response to increased costs and more complex deal environments.
Key insights include:
A trend towards increasing fee levels, with 38% of advisors raising their fees in 2023 due to higher costs and a challenging dealmaking climate.
An increased emphasis on recurring engagement fees to mitigate the risk of extended or failed deal closures.
Adaptations in the calculation and collection of success fees due to more frequent use of earn-outs and complex deal structures.
Steady or increased fee revenues for middle-market firms, with profitability generally maintained.
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The SMB M&A Pipeline: Q1 2024
The Q1 2024 edition of The SMB M&A Pipeline report on Axial analyzes the small to midsize business (SMB) mergers and acquisitions landscape, noting a general decrease in deal volume compared to the previous year. The report presents industry-specific data, showing that industrials experienced growth, while transportation saw the most significant decline.
Key insights include:
A total of 2,534 deals were recorded, marking an 8.62% decrease year-over-year.
Industrials was the only sector with increased deal flow, while transportation declined the most.
Food & Hospitality and Consumer Goods, despite high deal volumes, had lower pursuit rates compared to Healthcare, which ranked high in pursuit rate but lower in deal volume.
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Big Deal Small Business: (Partially Redacted) 2023 Annual Letter
The 2023 Annual Letter reflects on the challenges and incremental progress of running a small business without a managerial layer and with significant leverage.
Key insights include:
Recognition of financial underperformance but also foundational progress in business operations.
Significant changes in process management and team dynamics aimed at improving efficiency.
Setting realistic goals and making strategic adjustments to stabilize and potentially grow the business in 2024.
Emphasis on personal development as a business leader and adjusting expectations to appreciate incremental progress.
🧵 Best of X (Twitter)
Might be time to get off that surfboard. The silver tsunami is nowhere in sight…
Sometimes a business is simply a customer list. How do you value this type of acquisition?
Be mindful of these when talking with an Amazon aggregator…
Inside look at demand dynamics for a smaller deal…
Best business structure for a HoldCo…
Good overview of QSBS…
🗓️ Events
INSEAD ETA Conference (May 11) - Fontainebleau Campus, France
M&A Launchpad Conference (May 11) - Houston, TX
IBBA 2024 Annual Conference (May 11-12) - Louisville, KY
Capital Camp (May 21-24) - Columbia, MO
Midwest Deal Summit (May 29-30) - Chicago, IL
Southeast EtA Conference (Sept 6-7) - Washington D.C.
Self-Funded Search Conference (Sept 30-Oct 1) - Dallas, TX
Main Street Summit (Oct 9-10) - Columbia, MO
Annual M&A Institute (Oct 10-11) - Dallas, TX
McGuireWoods Independent Sponsor (Oct 15-16) - Dallas, TX
Texas & The South M&A and Business Symposium (Oct 16-18) - Dallas, TX
National Summit for Middle Market Funds (Oct 27-29) - Palm Beach, FL
🎵 Listening: “Traveller“ by Chris Stapleton
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 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 outreach and send you relevant, actionable deals directly into your inbox.
Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($1M - $10M of revenue) considering exits. All deals are sourced by the Rejigg team. Their team adds 7 to 10 new deals each week.
Kumo - 100,000+ deals sourced from thousands of brokers and marketplaces. Plus, AI-powered listings, robust data & analytics, and more.
Sterrett Law - At Sterrett Law, we offer Manhattan and Boston experience at Vermont prices. Specializing in deals under $10 million, we're your go-to partner for navigating the complexities of mergers and acquisitions without the hefty price tag
Search Fund Coalition - community for the Entrepreneurship Through Acquisition ecosystem. Monthly events and meetups for acquisition entrepreneurs.
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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