Anyone had luck purchasing a business from direct outreach?

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May 15, 2024

by a searcher from University of Southern California in Los Angeles, CA, USA

I'm curious what your experience has been with direct outreach. I've been looking for a CA business in the $1M-$3M range on all the popular broker sites but I haven't seen more than a handful of worthy businesses during this time so I am looking for other avenues.

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Reply by a searcher
from University of California, Berkeley in Vienna, VA 22180, USA
It has worked well for me. I obtained a list from an association which consisted of more than 5,000 contacts. I had VAs call every one of them while another team gathered LinkedIn profiles and sent connection requests. I'm in negotiation with 2 and another 3 more companies I am evaluating. It all depends on the industry but if the business requires a specific license it's easy to get the details and VAs are cheap at $5 - $7 per hour. Using this method has generated more than 100 leads and without a broker involved allows me to be more creative in the deal structure. I intended to acquire 100% of one company but instead I will likely be acquiring a majority interest in 3 companies over the course of the next 2 years. This was not my plan but evolved out of discussions with potential sellers. The lesson here is not to stop if they say I don't want to exit now.
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Reply by an investor
from McGill University in San Diego, CA, USA
Thanks for the tag ^redacted‌. Good question Daniel. Your observation is quite common amongst searchers.

You may want to consider developing an industry thesis, and in parallel, pursuing a thesis-driven proprietary search. This will require a combination of time/patience/ and lots of networking. After a half dozen meetings in a specific industry, my hunch is that you will develop keen insights, which in turn will impress business owners (de-risking the decision for them), and also help you move throughout the diligence process more expeditiously (you will know the questions to ask, how to assemble a value creation, plan, etc). If you want to talk tactics on how, feel free to DM me. ‌
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