🧐 What I Learned Last Week

The best M&A, SMB, and EtA content for week ending 2.24.23

Feb 24, 2023

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📰 SMB/EtA Articles

2023 M&A Outlook: 4 Trends to Watch as Deal-Making Accelerates

Mergers and acquisitions activity (M&A) at the beginning of 2023 is expected to remain somewhat muted, consistent with the environment in the second half of 2022. But looking further ahead to the second half of 2023 and beyond, deal-making is likely to accelerate, according to Tom Miles and Brian Healy, Co-Heads of Americas M&A at Morgan Stanley. Factors most likely to drive activity include:

Well-capitalized companies making acquisitions in their core businesses
Financial sponsors, which are holding record amounts of capital, deploying it in acquisitions
Uneven performance among companies stoking shareholder activism
Cross-border M&A making a comeback

🧵 Best of Twitter

FBA has minimal platform risk but that doesn’t mean it’s a great business model…

Jerry Freedman - CEO, Freedom Business Financing @SMBFinancingGuy

People who say stay away from Amazon businesses literally have no clue. No clue what a cash cow the 3rd party marketplace is for Amazon. >59% of the volume on Amazon .com was from 3rd party sellers in Q4 2022. It's not in Amazon's interests to shut them down. No clue.

Should you put > 10% down on an SBA loan? Here’s how to think about this…

SBA Ray @SBA_Ray

Max leverage debate🚨 The SBA allows up to 90% financing for your first business acquisition. Does it make sense to inject MORE than 10%? Let’s see 👀 I’m making the following assumptions: 🔹$2,250,000 purchase price 🔹3.5x multiple 🔹$75,000 buyer salary 🔹 10.50%… https://t.co/5dBxNxc3X8

Eric wants to get you into a brand-new business…

Eric Hsu @lawyer4SMBs

$50K in cash can buy you a brand-new Tesla 3. Or can buy you some freedom. Want to turn $50K cash into $100K+ a year in cashflow? In this thread I’m going to share 3 very realistic ways you could do this (PS, none of them require a personal guarantee). A 🧵

For the many of you who are looking to acquire an IT MSP…

Peter Lehrman @petelehrman

My latest pod. Linda Rose is a super impressive entrepreneur / operator turned M&A advisor. We go pretty deep in IT Services M&A, her niche. Enjoy:

podcasts.apple.com‎Masters in Small Business M&A: IT Services CEO turned M&A Banker Linda Rose on Apple Podcasts‎Show Masters in Small Business M&A, Ep IT Services CEO turned M&A Banker Linda Rose - Feb 23, 2023

Vet, dental, and medical spas are just a few industries that are great candidates for consolidation…

Ben Tiggelaar 🟠 @bentigg

Vet + dental consolidation still in the early innings Old data but this is what consolidation looks like in a fragmented market

No need to overcomplicate the analysis…

Privateequityguy @midmarketPEguy

When evaluating deals, I like to have multiple ways to win. There are 4 main ways to generate a return. Organic growth, cash flow, buying m&a below your basis, and multiple expansion. You don’t need a fancy model to know how much value these impact your return by. See below

🤔 Thoughts, Events, Other

Miami Meetup

I am a member of Trends by The Hustle. It’s a great community for entrepreneurs and business owners. I will be hosting a local in-person meetup for members of the group and I’d like to extend the invite to readers of this newsletter.

When: Wednesday, March 8th

Where: Miami (Exact location TBD but in Brickell or Downtown)

RSVP 👉 TrendsMiamimeetup - Splash (splashthat.com)

⚒️ 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.

The Business Inquirer