Commenting to follow! Really interested to hear about this topic.

Tagging a few Searchfunders that have commented on Searching during COVID in the past & might be able to contribute to this thread: ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌ (To our friends with insights on Searching during COVID, THANK YOU for helping to make Searchfunder a collaborative community. Be sure to take full advantage of your UNLIMITED access to IBISWorld (Searchfunders only) & BVR Deal Stats, now available under the INDUSTRIES & VALUATIONS tabs at the top of this screen. With Best Wishes, ^[redacted]‌). ‌‌

Equity raise has been the toughest - I suggest building an investor base almost as ritually as you build your pipeline. Especially if you have a broad sector focus.

Lender issues during covid almost killed one of my acquisition deals, a few days before scheduled close. However, when the one lender fell through, another one stepped up and got my deal done 3 weeks later.

I raised the search capital during spring 2020, which was definitely tougher/longer than during normal times, mostly due to investors focusing on portfolio company issues (PPP, managing A/R, dealing with revenue declines, etc.). I would expect that has normalized by now. Fortunately, experienced search investors are long-term oriented and have invested through several economic cycles.

During the search phase, I've found that many owners, he COVID economic and health crises are a catalyst for thinking about life outside of the business, including transition/retirement. However, many, especially those that had adverse impacts due to COVID, are putting off selling until things stabilize. Additionally, companies that grew or were stable during Q1-Q2 2020 are somewhat emboldened to ask for higher valuations due to fewer sellers, lower rates driving asset prices up, and recent data showing their business can weather economic turbulence. On the plus side, most people put off travel/in-person meetings until closer to or after an LOI, so it's been easy to stretch the search capital.

I expect to see a major impact during the equity raise as Daniel noted above. Search investors have always focused on predictable repeat/recurring revenues, which has only increased post-COVID. I'd recommend spending additional effort on cohort analysis and similar exercises pre-LOI.

It helps if you had prior experience/relationship with investors before covid... Start with those that you already have relationship with and take it from there.

Connecting with new owners has been more difficult, especially if they are older and/or more COVID wary. Harder to build a relationship fully on Zoom or over the phone. Relying on relationships built before COVID is a must, and then just being flexible with people's preferences going forward.

I have not spent a significant amount of time speaking with investors yet, but it has been relatively easy to get potential sellers on the phone. I don't have a reference point from before COVID, but it seems to me that most are open to zoom and phone to start the conversations.

Only COVID-specific challenge so far was a few weeks ago, sitting masked, in-person with a potential seller... who then pulled down his mask and cited "masks give him headaches." The broker and I were cringing and neither of us said anything.... I just tried to end the meeting as quickly as I could.

My experience thus far is that people are willing to phone/zoom and it's actually an advantage to parse through key information faster to asses viability of the deal - the relationship building part is definitely slower as it's really dependent on the seller and their willingness to meet. One additional idea is to look closer to driving distance so it's maybe more likely for them to be willing to meet for a quick chat.

I think it’s highly dependent on location and personality of the owner. In contrast to some of the comments above, most folks around me are far less concerned. Fortunately that means less competition as so many are trying to do over email (or sometimes the phone/zoom), what I’m happy to do in person. One in ten owners may be a bit more concerned, so I just try to be respectful and follow their lead during meals/sit-downs. Never underestimate the power of a face to face meeting. It’s who you are as a searcher that separates you from the big, nasty PE firms ;)

I've found that the valuations for the solid companies have a premium since they are now 'pandemic' proof and there is a lot of dry powder in the market all chasing the same types of deals. So it's been more competitive. The fact that you can cover a lot of ground over virtual meetings has been great though.

I've seen a lot of issues in the nitty gritty on deals tied to some of the nuances of PPP loans not being forgiven yet. Putting funds in an escrow, notifying SBA, etc. It's a headache.

Hey Jose - I would definitely dig into the trends of the business when assessing earnings and related valuation. We've seen both business adversely affected by Covid but also those who have benefited pretty significantly. We were involved in a deal in the snack space and they saw a significant bump in revenue. The question is - is it sustainable. Not surprisingly the buyer and seller had different opinions and it was at least partially a reason for the deal not closing. Two recent deals I worked on the target had either reduced payroll by their PPP loan (even though not forgiven and one time in nature) or with tax credits. Be on the look out for this as it can understate payroll expense.

From a diligence perspective, it has been assessing the business in terms of what it would look like in a post-COVID world. We're leveraging some heavy trend analysis both at a high level and at a granular level by customer, project, etc. Same on the cost side of things. We've seen a lot of businesses that have restructured post-COVID, as well, so changing how they operate going forward. Then you have the PPP loan forgiveness, etc. to consider. Lots of things to look out for, but that's what keeps things interesting!