No risk it, no biscuit?

by a searcher from University of Denver - Daniels College of Business

3 years ago

I'm close to submitting an LOI for a B2B service firm.  I've talked to some fellow searchers and CPAs, and frankly it seems like they could nitpick every deal, and due diligence themselves out of a turkey sandwich. 

At what point do you eventually acknowledge every deal has some risk and go for it versus waiting on the sideline??

I'd love to hear from searchers who have actually closed an acquisition. Were there major skeletons in the closet post close? What are the deal breakers for you pre LOI and in due diligence? Any searchers with major regret in their current business? 

In the words of coach Bruce Arians who won the super bowl this year, 'no risk it, no biscuit.'

4 likes
273 views
10 comments

professional from Southern Cross University

If the broker has been using this format for a long time then use the format. Go through the format with your lawyer if you have any doubt.

6 months ago | like reply | 0 likes

intermediary from Brigham Young University - Marriott School of Management

Here are some major flags: large revenue percentage from one customer that was built through a friendship or family, a single customer who is about to move markets, employees planning to leave once it sells, equipment about to go to shit. Other than these, most other risks are up to you and whether or not you're up for the challenge! Best thing to do is interview customers and employees, understand those relationships beyond what the owner says.

6 months ago | like reply | 0 likes

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