🧐 What I Learned Last Week

Curating the best M&A, SMB, EtA content for week ending 2.17.23.

Feb 17, 2023

Hello Friends!

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📰 SMB/EtA Articles

Red Forest Capital: February 2023

Red Forest Capital is a family office with over 300 search fund investments. They recently released their monthly commentary and an amazing list of resources & content.

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The New Gatekeepers

Not directly M&A related but Benedict Evans released his annual presentation highlighting the major tech & economic trends for the year, The New Gatekeepers.

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Citizens 2023 M&A Outlook: Optimism cuts through headwinds

Key Insights

Valuation & company performance outlooks remain positive overall but differ significantly across sectors
Nearly 2/3 of companies say that M&A will be their primary driver of growth in 2023
PE firms and companies both see a slight advantage to sellers in the current M&A environment
Deal confidence is down amid broader uncertainty, but the pipeline of sellers and buyers remains healthy

🧵 Best of Twitter

A great way to frame NWC. Not just about funding operations…

Derek Pitts @Derek_CayneQofE

Working capital in an acquisition context is often referred to as "sufficient to fund operations". Most equate that to mean expenses. Working capital needs to be sufficient to fund profits as well. I prefer to present this to the Seller as "sufficient to fund EBITDA."

Some things to think about when deciding whether to raise outside capital and from where…

max gagliardi @max_gagliardi

We have raised hundreds of millions of dollars using: Private equity (from a sponsor) Our own PE fund (from LPs) Debt financing Angel investors Joint ventures Self-funded ventures A thread on what I’ve learned

Great questions to ask when looking at a business from an acquisition or investment standpoint…

Codie Sanchez @Codie_Sanchez

Buffett. Graham. Dalio. Horowitz. These legendary investors all used checklists before making investments. Here were the 75 most common questions to build conviction in an investment:

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Sam Altman @sama

2023: $30,000 to get a simple iPhone app created, $300 for a plumbing job. i wonder what those relative prices will look like in 2028! the likely coming divergence between changes to cognitive work and changes to physical work could be quite dramatic.

🤔 Thoughts, Events, Other

Florida Meetup

I’m going to try and attend this one. Let me know if you can make it.

Jacob Williamson @jacubwilliamson

🚨🚨 new SMB Meetup with the SMB Twitter fam in sunny Florida! Our friends at @FlyingMagazine are helping us take over their amazing booth for an SMB meetup at the Sun N Fun airshow. No you don’t have to like aviation, but what a venue! eventbrite.com/e/florida-smb-…

eventbrite.comFlorida SMB Meetup ✈️ 3/30The DFW meetup went so well! So, let’s get everyone together again in sunny Central Florida.

⚒️ 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.

That’s all for this issue of What I Learned Last Week!

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The Business Inquirer