Avoiding the 4 Fatal Flaws We've Seen Across Hundreds of ETA Deals

“Self-funded search deals don’t follow a power law like venture capital, or even a normal bell curve. You have two groups of companies: those that tread water and do ok, and those that achieve meaningful growth and do very well.” Self-funded, SBA-financed deals are relatively new to the marketplace—consider LBO-style private equity deals have been around for decades as have traditional Search funds. Venture capital has been around for centuries (see: Dutch East India Company in the early 1600s). Thus, the amount of aggregate returns data are fairly limited. To give a perspective into the returns of investors, we’ve tapped some help from Grant Hensel of Entrepreneurial Capital (he recently raised a $11M+ fund to invest in SBA deals). Between SMBootcamp and Entrepreneurial Capital, the deal flow is quite strong with hundreds of investment opportunities screened per year. While there isn’t a ton of data readily available on returns, there is a lot of history and precedent for how to evaluate transactions and best-position yourself on the right side of the theoretical curve. Before you consider ETA as a potential path, we’d urge you to understand the risk and reward profile of owning a small business, while simultaneously arming yourself with an investment-grade analytical skillset. In this issue of The Playbook, we break down the 4 most common pitfalls that hold buyers back and how to avoid them. Read the full post here: https://smbootcamp.beehiiv.com/ ^redacted‌