One big hurdle I continually run into is brokers and / or sellers that don't understand working capital, primarily the fact that the valuation on the business assumes ongoing working capital in the business. Most sellers I've been communicating with think that they should be able to take all of the AR (and assume the AP) since "they did the work". Which, I'd be okay with in exchange for a commensurate reduction in company valuation, since I'd have to fund the new working capital with additional cash. But, they want the 4-5x EBITDA valuation plus take the working capital, which can be the equivalent of 1-2x EBITDA in some cases.

Part of the problem is that there are many brokers who don't understand this point either, and advertise the deals as "cash-free, debt-free, and receivables-free".

Any tips or ideas on how to get people to understand this point?