How common on a small ($1.3m EV) financial buyer-type deal is it to have AR excluded, include Earnest Money Deposit, and move straight from buyer/seller call to APA?
IOI, LOI, DD, APA --> all part of the dating process and now I feel like, maybe all of that is a time and process killer for such a small deal in this case.
AR/AP - always felt similar to gas in the tank for a new car you just bought and drove off the lot. For this small of a deal, wondering if just not how it's handled in this neck of the woods.
EMD - seems more RE transaction related to me but I can also see how it ties into moving straight to the APA and demonstrating commitment on my end.
I almost feel like I am getting taken for a ride but at the same time can see the other side's point.
Business has consistent $1.2m Annual Rev, $450k SDE with ~$250k in land included.
No AR, asking for Earnest Money Deposit, no LOI - straight to APA???
by a searcher
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
Don’t pay to peek.
Never make an earnest money deposit or sign a purchase contract—no matter how many contingencies are in it—before you and your advisors have analyzed the company, obtained an expert opinion of value and defined alternative terms of purchase.
If you doubt the wisdom of this advice, make an offer on a business you don’t really care about. Later, when you think you know what it is worth, try explaining to the seller why your offer must change.