Experience with brokers as a self-funded searcher - any successes?

June 22, 2023

by a searcher from Harvard University - Harvard Business School in New York, NY, USA

I'm getting started with my self-funded search, and have been reaching out to different listings on a number of marketplace sites. I've found these listings and broker interactions to be fairly helpful in terms of seeing a lot of different companies quickly and "building reps".

But - are there many stories of successful searches (self-funded or funded) done via brokers?

Every successful searcher I've spoken to, now over a handful, have ultimately used a proprietary search. The practice with brokers has been great and I do think I've seen a couple of potentially viable transactions, but most of the companies I'm seeing have raised significant question marks in their CIMs. Not sure if this is just "all companies have their warts" or a selection bias problem about the kinds of companies that are up for sale and going through a broker.

How do others view the broker channel? A good channel to be loosely tuned into, but don't get my hopes up?

Reply by a searcher
from The University of Michigan in San Clemente, CA, USA

Hi Allen, I've had a mixed experience with brokers. Some are very willing to help and others have a more "show me the money" approach and wont talk to me unless I have $2M cash sitting in my pocket right now. But a good broker is invaluable. I created a relationship with one who called me up when he found a deal I might like. It didnt work out in the end, but at a high level it was exactly what I was looking for so I really appreciated him thinking of me. I dont think that's uncommon with brokers, you just got to find the right people and the right relationship.

Reply by an intermediary
from Texas State University in Houston, TX, USA

Allen, I use brokers to source deals. I think its important to manage the relationship upfront by letting them know what you are willing to look at and the type of seller you are looking to work with. Like in any industry, there are good and bad actors but building a relationship with someone that is less transactional and more serviced base is important. In the stage you are at, having a lot of deals to look it will help speed up the learning curve. Good luck.

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