What I Learned Last Week 7.18.2025
Curating the best M&A, SMB, and EtA-related content since 2020.
Hello Friends!
PSA: I’m heading overseas for a short vacation and will be taking a brief break from the newsletter. We’ll be back in your inbox on August 8th.
In this week’s issue of What I Learned Last Week:
📰 Articles
🧵 Online Highlights
🤔 Other - Deal Costs & Due Diligence
🗓️ Events
⚒️ Tools & Resources
💡 How I Can Help
This issue of The Business Inquirer is brought to you by:
Connecting Deal Sponsors with Investors
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📰 Articles
I summarize, so you capitalize.
The Silent Killer of SMB Deals
This article from SMBootcamp, featuring insights by Reid Tileston, explores the common but often overlooked financial pitfall in small business acquisitions: the “90-day cash crunch.” It describes how new business owners, especially first-time buyers, can quickly face liquidity issues in the initial months post-acquisition due to unexpected operational and financial hurdles. The piece emphasizes that proper planning for cash flow—not just profit—is vital to survive this critical period.
Key insights include:
Cash ≠ Profit: Buyers often confuse projected earnings with actual cash flow, overlooking timing and liquidity realities.
Common pitfalls: These include underestimating working capital needs, lacking a line of credit, and misjudging post-close liquidity requirements.
Operational surprises: New owners may face staff turnover, customer attrition, and unexpected logistical issues like payment delays due to new entity setup.
Transition costs: Issues like vendor term resets, PO box changes, and check deposit rejections can significantly affect cash flow.
Customer concentration risk: Losing a top customer can instantly and severely impact financial stability.
Liquidity is survival: Having sufficient cash and access to credit at closing acts as an insurance policy against early-stage disruptions.
— — — — — — — — — — — —
Should Search Funds Buy Healthcare Practices?
The discussion explores whether search funds should invest in healthcare practices, particularly in physician-centric businesses like dental and OB-GYN practices. It features healthcare, legal, and media veteran Scott Becker, who emphasizes the complexity and risks unique to healthcare investing. While fragmentation in healthcare offers growth potential through rollups, challenges like tight physician supply, regulatory barriers, low margins in some specialties, and payer dependency make this space fraught with pitfalls for unsophisticated investors.
Key insights include:
Margins are critical: Rollups only work in specialties with strong, stable margins that can support debt and operational change.
Leadership matters: Success often hinges on capable physician or non-physician leadership and thoughtful post-close integration.
Risk areas: Top risks include physician concentration, payer dependency, and clinical disruption from trends like GLP-1 drugs.
MSO/DSO skepticism: Many physicians are unhappy post-sale due to income reductions and unmet promises of operational support.
Recruitment challenges: Physician and clinician shortages have worsened significantly, limiting growth potential and increasing fragility.
AI’s impact: AI is reshaping healthcare, especially in primary care, but won’t replace specialists soon. It’s a complement, not a cure-all.
Cautious optimism: Investors should pursue tech and operational improvements while ensuring a strong human clinical backbone.
🧵 Online Highlights
I scroll, so you don’t have to.
50 insights from an SMB attorney…
Most important takeaways from Moody’s report on PE distress…
Nice primer on sale-leasebacks in M&A…
This is how the new tax law locks in generational advantages for business owners…
Instantly gauge how much SBA debt a deal can support…
Before you celebrate the LOI, start these two critical steps…
🤔 Other
Deal Costs & Due Diligence
At DueDilio, I talk to a lot of first-time business buyers. One common theme I see is over-scoping due diligence — especially on smaller deals.
Case in point: a buyer pursuing a $1.4M acquisition recently asked for legal, financial, HR, operations, sales, marketing, insurance, and background checks. While thoroughness is important, this level of diligence can easily push deal costs into the stratosphere — and in many cases, it’s simply not necessary.
My advice? Start with legal and financial due diligence — those are foundational. Then roll up your sleeves and handle as much of the operations, sales, and marketing review yourself. It’s not just a cost-saving move — it’s a smart way to truly get to know the business you’re about to own.
🗓️ Events
Stanford Search Fund CEO Conference (Sept 3-4) - Stanford, CA
Southeast ETA Conference (Sept 5-6) - Charlottesville, VA
iGlobal Independent Sponsors Summit (Sept 29-30) - New York, NY
McGuire Woods Independent Sponsor Conference (Oct 14-15) - Dallas, TX
Main Street Summit (Nov 4-6) - Columbia, MO
M&A Source 2025 Fall Conference (Nov 9-12) - Phoenix, AZ
Booth-Kellogg ETA Conference (Nov 19) - Chicago, IL
iGlobal Independent Sponsors & Capital Providers (Dec 9) - New York, NY
🎵 Listening: “Come With Me“ by Major League Djz, Jorja Smith 🎵
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 or affiliates 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 tedious and time-consuming job of deal sourcing so you can spend more time on DD and closing.
Rejigg - Platform that connects searchers/investors directly with owners of off-market small businesses ($200k - $3M EBITDA) considering exits. All deals are sourced by the Rejigg team. Their team adds 15 to 20 new deals each week.
Kumo - 100,000+ deals sourced from thousands of brokers and marketplaces. Plus, AI-powered listings, robust data & analytics, and more.
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.
Secret - Say goodbye to overspending on SaaS. With Secret, you get access to up to $1,000,000+ in savings on the best software to run your search, operate, and scale your business.
Deal Sourcing Guide (2025) - Discover 100+ platforms to supercharge your deal flow and find your perfect acquisition target—from flagship marketplaces to AI-powered deal sourcing tools, all updated for 2025.
💡 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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