LOI fell through...what next?!

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by a searcher from Texas A&M University
in Cedar Park, TX, USA

2yrs ago

LOI fell through...what next?!

The LOI I submitted was not accepted (seller went with cash buyer vs. my SBA offer). Understandable but disappointing. I haven't seen any other immediate deals available in the areas I was looking. My intent with the last deal was get the LOI done and then pursue investors for the equity portion of the SBA. What are some suggested next steps for a self-funded searcher like me? Should I work to secure investors without a specific deal in hand?

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reply by a searcher 2yrs ago
from University of Illinois at Chicago in Madison, WI, USA

Keep on swinging. My first LOI fell through just days before closing. I was also a self funded searcher. I had quit my W2 already and blew through much of my reserve trying to get the deal done.

Honestly, I sulked for weeks, then I got back on the horse. Closed a deal about 4-5 months later. Just keep reminding yourself that there are plenty of companies out there: Never stop searching. Never stop connecting with potential investors. Just keep going and you’ll get it done.

reply by a searcher 2yrs ago
from Southwestern University in Houston, TX, USA

You can work to find investors if you have a specific niche that you're going after. They'll have opening conversations with you and decide whether what you're looking for falls into their area or not and then they'll tell you to check back in with them when you find one.

The benefit here is that if you leave a good enough impression, then they'll refer people to you if they hear about a good business they don't want to buy themselves.

Lots of LOIs fail (>50%), which is why I always recommend having multiple deals you're working on. They'll progress at an unknown pace and you're never left back as square 1 again.