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🧐 What I Learned Last Week
Curated M&A, SMB, and EtA content for week ending 3.3.23
This issue of What I Learned Last Week is brought to you by Deal Flow Scout.
Deal Flow Scout is a free resource I created for open peer-to-peer sharing of deal flow.
Do you see a great deal that’s just not a right fit for you? Post it on Deal Flow Scout for a potential to get paid a referral fee.
Actively looking for more deal flow? Add your search criteria on Deal Flow Scout so that other searchers can be on the lookout.
It’s not for brokers or investment bankers.
Deal Flow Scout is for business buyers to share deal flow with each other. Simple as that.
We all know how businesses use M&A as part of their growth strategy but the same concept applies to innovation.
When doing these acquisitions, more so than really buying the existing “business”, these companies are buying a mix of:
A talented team
Experience, know-how, and passion in a specific area
A product that is unreleased or in its early stages but has not quite taken off as a business
They then take a fresh crack at the space or supercharge the existing product they’re buying with more resources and distribution or use the team and the product built so far to cut their time to market significantly.
This approach has been taken by even what is considered the very innovative companies of today or those known to have a mentality of building it themselves or the know-how to do so. Let’s look at a few companies to illustrate.
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This is a great read for those looking to acquire a business in the skilled trades or if you’re just curious why your local home service business has a 6-month waiting period.
Electricians say they are booked several months out and struggling to find enough workers to keep up with demand. Many are raising wages and prices and worried that they won’t be able to keep up as government climate incentives kick in.
“I’m tired of telling people I can’t help them,” said Brian LaMorte, co-owner of LaMorte Electric Heating and Cooling in Ithaca, N.Y., which does residential heat-pump installations and electric-service upgrades. His six-person company is booked roughly six months out, so he has been referring potential new customers to other firms in the area.
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Andrew Pierno published an update on his micro-SaaS HoldCo. I love what XO Capital is doing and these updates are always a great read.
We're in the process of selling one of the companies. If we get a market price for it, it will effectively have paid back all the $ the 3 of us have put into XO. What does that mean? Basically we will have a portfolio that makes $200k ARR (and growing) that we bought for $0. That's insane. We'll obviously roll that cash back in to other acquisitions, but it's a cool concept.
🧵 Best of Twitter
A few of these lessons in valuation can also be applied to SMBs…
1) Private Credit 2) Bank Loans 3) SBA 4) PE 5) Seller Financing…
An LOI is an important first step in the deal process. Here’s how to get it right…
Some gems in this one…
The benefits of a Seller Note…
There’s still a lot of price discovery happening in the market…
🤔 Thoughts, Events, Other
I am hosting a local Miami meetup for entrepreneurs, business owners, M&A participants, professionals, and more. It’s a chance to network over some drinks and meet others in the area.
When: 6pm on Wednesday, March 8th
Where: Lagniappe (Edgewater/Midtown area)
⚒️ 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.
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.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
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.
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.