Take Five #045: How one PE pro evaluates deals with some simple back-of-the-napkin math, and more

Top five must-reads this week in the world of SMB acquisitions and operations

Mar 8

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Take Five #045: How one PE pro evaluates deals with some simple back-of-the-napkin math, and more

1. Mastering the art (and science) of good deal judgement

Great 10 point thread by Steve Ressler of the Brydon Group on why you need to learn how to assess deals: “In the end, deal judgment is a combination of art and science. It's about being able to balance risk and reward, intuition and analysis, and short-term gain and long-term success.”

Steve Ressler @steveressler

The importance of deal judgment is critical. Quick thread on how I think about deal judgment:

2. In the same vein: how one PE professional assesses their deals with some simple questions

“Overall, good deals can be assessed on a napkin or simple bridge. No need to over complicate the model.”

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

3. Visionary? Integrator? Maybe it doesn’t matter

If you use EOS to run your business, you may be familiar with Visionary and Integrator labels as a way to structure business roles & accountability. Here’s an excellent thread by Josh Schultz of CaneKast on how why he drops those labels and how he builds/partners with others in real life:

Josh Schultz @joshuamschultz

Enough beating around the bush on the Vision vs Integrator roles. Here is the cold, hard truth on why many of you don't understand these perspectives, and won't get the partner or setup you want. 👇

4. 5 crucial questions to get you started on your due diligence

Connor Abene @ConnorAbene

If you want to capitalize on the M&A wave, you need to understand due diligence. Here are 5 crucial questions to get you started:

5. The 12 Basics of LOIs you should know

Eric Hsu @lawyer4SMBs

Letters of Intent, or LOIs, are used by 99% of business buyers to make an offer on a business. But most people don’t know how to write a good one. As an M&A lawyer, I’ve written or reviewed dozens upon dozens of LOIs. Here are 12 LOI basics you should know. A 👇🧵

Upcoming Events in the SMB & Business Acquisition Space

(A ✨new✨ section in our newsletter: we’ll be adding to this list weekly, so send over any events you think we’ve missed!)

Lisa Forrest @LisaGForrest

SMB Twit / EtA Searchers in the Philly area on 3-22-23 and want to meet up for drinks? Some of us will be in town for the Wharton EtA conf with time on our hands. @JordanPCarter @SMB_ash @SMB_Attorney DM with RSVP and we'll organize around the interest level

March 23, 2023: The Wharton ETA Summit 2023 is hosted on 3/23 in Philadelphia, PA (link here).

Heather Endresen @EndresenHeather

Boston area Searcher Meet-up, March 30th. Julie Morse of Orr & Reno will be co-hosting. If you don't already know Julie, she is a fantastic buyer's counsel in the Search Fund community. Please DM me if you'd like to register for the event.

Jacob Williamson @jacubwilliamson

🚨Florida SMB Meetup 🚨 Grab your spot at the #SMB meetup at the Sun N Fun Airshow with @FlyingMagazine on March 30. Meet & learn from SMB twitter friends. The meetup is free, but the airshow has admission (can't help it) eventbrite.com/e/544428729987

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

Sam Rosati @Sam_Rosati

Golfers of SMBTwit: My buddy @rondebarber and I are on the Board of the @ValsparChamp, the PGA Tour event in March in Tampa. We are hosting a SMBTwit meetup to watch the tournament, and a separate "Monday after the tournament" round of golf on the course the pros are playing...

SMBash @SMB_ash

🚨SMBash ‘23 Announcement🚨 We’re excited to share the theme for SMBash ’23! This year, we’re zeroing in on search with two days devoted to finding, acquiring, and investing in SMB/Micro-PE deals. Here’s a quick summary:👇

Pursuant Capital @PursuantCapital

Applications are OPEN for the first two Search Fund Bootcamps of '23: -February 8-10 -May 17-19 @PursuantCapital's Bootcamp is a 3-day, intensive, in-person training course with Pursuant, its Deal Team (SBA lender, QofE, Legal, Insurance, Tax), ETA investors & Searcher CEOs.

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