ð§What I Learned Last Week
Weekly roundup of the best M&A content.
Hello Friends!
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.
ð° SMB/EtA Content
INSIGHT AND ANALYSIS OF SMALL BUSINESS SENTIMENT AND ECONOMIC TRENDS
LiveOak Bank is one of the most well-known SBA lenders in the SMB space. They just released their Q4 2022 report on small business sentiment. The report shows that 43% of SMBs had lower profits in 2022 and just 36% of SMBs expect their financial condition to improve over the NTM.
The BusinessPulse, powered by Barlow Research Associates, Inc., provides detailed analysis and reporting on small business sentiment including economic position, economic confidence, and credit outlook for small and middle market companies. Barlow Research surveys more than 2,800 companies annually across the U.S. to gather current viewpoints and draws on 10 years of data to provide in-depth research on economic trends to the commercial banking sector.
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Net Dollar Retention: The âHoly Grailâ SaaS Metric
Growth is important but you also want to make sure that you keep your existing customers and reduce churn. In SaaS, one way to measure this is through net dollar retention. How much of your recurring revenue are you keeping each month or year?
Why Is NDR So Important For Software?
As private equity buyers, we look at mature SaaS businesses. Unlike VCs that invest based mostly on future potential, PE buyers invest based on whatâs already been built.
SaaS businesses are built on intangible assets consisting of their actual software and the customers that use it. Net dollar retention can measure the quality of these two intangible assets.
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The Smallest Changes That Had the Largest Impacts: 4 CEO Case Studies
As the saying goes - â20% of your effort will lead to 80% of the result.â How do we know which 20% to focus on? Mineola Search Partners tackles this question.
When taking over a new business, new CEOs often speak of operational âlow hanging fruitâ, so I wanted to ask this same question to 4 different CEOs to learn more about just what this low hanging fruit is.
Each CEO that Iâll be speaking with today is at a different stage of their journey: Betsy, who Iâll begin the episode with, is still in her first year in the CEO seat. Sheret, our next leader, has been CEO of his company for ~2 years. Robin Kovitz has been leading her company for ~8 years, and finally Adrian, our final CEO, ran his company for ~7 years before a successful exit to a strategic acquiror in 2019.
Does growth and success tend to result from a large number of seemingly small changes, or a small number or larger changes? Thatâs what weâll endeavor to answer today, informed by 4 CEOs at very different stages of their respective journeys.
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Iâd like to see a two sentence summary of how you got to fatFIRE.
Fat FIRE = Financial Independence, Retire Early (FIRE). A user in the r/fatFIRE Reddit community asked readers to provide a quick blurb about how they reached this life outcome. Interesting Reddit post.
𧵠Best of Twitter
Kelcey is as legit as they come. Could be a great opportunity for the right individualâŠ
Great framework for knowing what to track and how to track itâŠ
This is very relevant for any business with machinery, equipment, vehicles, etcâŠ
Watch out for these during your due diligenceâŠ
Some lessons to keep in mind for your next dealâŠ
Not sure Iâve met anyone who thought SMB is âeasyâ but hereâs a reminder of why itâs notâŠ
How to stand out from the crowdâŠ
Steve is an OG in the EtA space. Hereâs his âTop Hitsâ albumâŠ
ð€ Thoughts, Events, Other
New Marketplace
This week I had the pleasure of speaking with the founder of OneDeal. Itâs a new business marketplace that aims to compete withâŠð¥âŠBizBuySell. Interestingly, they are backed by one of the worldâs top startup accelerators, Techstars. Really curious to see how they go about disrupting such a behemoth.
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DueDilio 2022 Year in Review
Earlier this week I sent out an update to all the due diligence service providers in the DueDilio network. I want to share a condensed version with you.
DueDilio is a leading online marketplace to hire highly vetted due diligence service providers. Some of our accomplishments in 2022:
⢠Worked with over 260 business buyers on their due diligence projects
⢠Website redesign for a more professional look and functionality
⢠Worked with service providers and content writers to populate our Knowledge Center with articles, templates, and checklists
⢠Formed partnerships with top M&A marketplaces & deal origination firms
⢠Excellent rating on Trustpilot
Financial due diligence (QofE, Proof of Cash) is the most requested service category accounting for around 45% of all projects. Legal services is a close 2nd with around 20% of all projects. Background checks, technology, and various types of commercial due diligence round out the most requested types of services.
In terms of industries â manufacturing, home services, B2B services, and healthcare are the most popular. The typical deal size we saw was between $1M and $5M.
ð 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.
Thatâs 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.