What I Learned Last Week 9.20.2024
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
I summarize, so you capitalize.
Structuring Earnouts: Data Insights from 50 M&A Transactions
The Axial provides insights into structuring earnouts based on data from 50 M&A transactions. Earnouts are used to align management teams, bridge valuation gaps, and reduce upfront capital requirements. The analysis shows trends in various sectors, highlighting differences in earnout success rates, deal size, and company types.
Key insights include:
Earnouts are more common in smaller deals.
Higher earnout percentages tend to result in better performance outcomes.
Corporations and holding companies use earnouts more to incentivize post-deal performance.
Interest rates may influence the percentage of total enterprise value structured as an earnout.
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Moving through the Market: 2024 M&A Trends
Middle Market Growth analyzes key trends in M&A for 2024, showing increased deal volumes despite market uncertainty. Private equity (PE) faces challenges with fewer quality assets, inflation pressures, and macroeconomic concerns. Sectors such as healthcare, industrials, and technology show varying levels of enterprise value growth, while PE remains cautious but optimistic about future deal activity.
Key insights include:
Rising deal volumes but fewer quality assets.
Increased PE skepticism due to market instability.
Sector-specific trends, with healthcare and TMT showing growth.
Cautious optimism for improved activity in late 2024 and 2025.
🧵 Best of X (Twitter)
I scroll, so you don’t have to.
Searchers: This is what it takes to get deals done…
SBA loans come with unavoidable personal guarantees — if you're thinking of creative ways to dodge liability, think again…
You can now secure 'unlimited' $5M SBA 7(a) loans as long as the sectors don’t overlap…
Buying an inventory-heavy business? Beware of cash flow surprises…
A $5M/year commercial cleaning company shares its straightforward marketing strategy…
Net working capital (NWC) can make or break a business acquisition—get it wrong, and you could end up overpaying or facing a cash crunch…
🗓️ Events
Main Street Summit (Oct 9-10) - Columbia, MO
Annual M&A Institute (Oct 10-11) - Dallas, TX
Rice EtA Conference (Oct 13-14) - Houston, 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
Booth-Kellogg EtA Conference (Nov 4) - Chicago, IL
HoldCo Conference (Mar 31-Apr 3 2025) - Sundance, UT
🎵 Listening: “Can’t Stop“ by Red Hot Chilli Peppers 🎵
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 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 ($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.
DealFlowXchange - The premier private capital funding community for raising and deploying capital. Use discount code DUEDILIO for 20% off your lifetime membership.
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
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 - 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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