As a self-funded searcher who pays for DD costs?

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July 01, 2019

by a searcher from University of Chicago in 20 2nd St, Jersey City, NJ 07302, USA

I've found a deal, but with regards to DD (accounting and legal) do I front this cost knowing that perhaps the deal dies and I'm out those funds, or can I ask my equity investors for help with funding this cost? Any creative solutions that people have used?

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commentor profile
Reply by a searcher
from Columbia University in Jacksonville, FL, USA
Joseph, I had 5 restaurants under contract in March. Eventually pulled out due to COVID. However, I think you underestimate yourself. I hired a an offshore company to retype all the bank transactions into an excel spreadsheet and Matched it to the POS printouts and P&L's. All told, it was about 1000 dollars and lots of personal hours but I wouldn't have trusted any due diligence firm bc I was personally guaranteeing a large loan. They don't really have skin in the game.

That being said, always good to have someone else you trust look at it.


Match revenues to bank statements to financials to tax returns. That should give you a pretty good idea. My $.02
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Reply by a searcher
from University of Edinburgh in Boise, ID, USA
We're just one firm but here's how our model works: we provide a platform for finding DD advisors/experts in your space. We charge a low monthly fee to make the platform accessible knowing you'll look at a LOT of deals that are not a good fit. We charge a success fee on the deal (or deals) that you close which makes us whole. I think this is a relatively common model from what we've seen.

https://inquireof.com
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