Are the Books Cooked? How to Vet a Small Business Before You Buy
Originally recorded on the Rising Tide Startups Podcast.
►EXECUTIVE SUMMARY
1) THE FIRST QUESTION IS ALWAYS THE SAME: Are the books cooked? Triangulate the seller's numbers against the bank statements and tax returns before you believe anything else.
2) AN ENGINEER'S EYE ON THE NUMBERS: Trends in the data tell the real story of a business. If the math doesn't explain itself, keep digging.
3) DILIGENCE IS A TRUST WALK WITH THE SELLER: How to collect the data you need without blowing up the relationship.
► CHAPTERS
0:00 How to vet a small business acquisition
0:32 From engineering to business due diligence
2:20 Due diligence in 45 seconds: is the business worth the price?
4:40 Why data trends reveal the true story
7:52 Are the books cooked? Why bank statements don't lie
21:14 The trust walk with sellers during due diligence
29:12 Market valuations and deal flow