Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game

Probably 40 percent of the time I submit a Letter of Intent to acquire a business, I’ll be able to do it within a few days of first seeing the Offering Memorandum (OM) and talking with the seller. Another 30 percent within a month. Being able to act this quickly is beneficial to everyone involved. Not only does time kill all deals, but the opposite

Cultivating the right attitude by increasing your growth mindset and aligning your personal mission with Seligman’s PERMA formula is the key to unlocking success, both now and after you acquire a company.

In conclusion, Phase 1 of your search is to meet with every intermediary in your area, explain what you’re looking for, review their current listings, and get on their email list for new listings. This will result in you getting vetted and upstream to the deal flow in your area.

Do you excel in marketing, sales, process implementation, or accounting? What areas are you comfortable growing into and which ones do you want to hire assistance for.

Personally, my default is to keep real estate investment opportunities and business opportunities separate.

In Exponential Organizations, Salim Ismail says organizations that are growing exponentially (the unicorns) have adapted to the technologies that are growing exponentially. They don’t allow the business to be a bottleneck for growth, and it’s possible to go from startup to a Fortune 500 company faster than ever before.

all cash, earnout, and purchase with a seller note. Your LOI will outline your proposed deal structure.

Now it’s time to pull all of this together in your target statement. This is what you will use as your compass as you start your search journey. It goes like this: I am looking for a [choose product, distribution, or service] company with [enter the type of growth opportunity], generating [define size by SDE range], with [enter any limiters].

Instead, define the target by the amount of SDE. To review, the Seller Discretionary Earnings (SDE), is a measure of how much total cash flow the seller of the firm has been enjoying. It is calculated by taking the pre-tax earnings of a company, then adding back any interest and non-cash expenses like amortization and depreciation (which will give