Search Update - April Recap

Get it on paper. In the military, you don’t leave a pre-mission briefing without a clear and confirmed understanding of the mission and objective location. You take notes, you read them back, you confirm. The cost of being wrong was too high. April reminded me that the same thing applies in the civilian world, and particularly, in M&A. What I’m working on In March, I told you that Project Cascade—the proprietary opportunity I've been progressing since February—was on glide path to be under a letter of intent (LOI) within two weeks. We got there in mid-April. Within hours of submitting it, the owner and I discovered that the agreement we believed we'd reached on valuation rested on a fundamental misunderstanding. He'd heard a multiple of EBITDA. I had communicated a dollar figure in millions. The consequence is a significant valuation gap that we attempted to remediate. I spent the next several weeks working through the deal: stress-testing the model, engaging with my lender, and recalibrating with my capital partners. The owner took some time to think through a revised offer. Unfortunately, we were just too far apart and the deal broke. The lesson from this one is abundantly clear—move ruthlessly to get to a valuation and put the number on paper every time. Pipeline health 36 deals entered the pipeline in April (34 brokered and 2 proprietary) bringing the cumulative total to 528 since launching the search. I've passed on 28 and 8 remain active from April's class. Across the pipeline, 17 deals are active (13 brokered, 4 proprietary) with five in late-stage work: two IOIs submitted on brokered deals and three in pre-IOI diligence. Of the deals that reached the CIM review, 20% advanced to Pre-IOI diligence—more than double the March rate. It would appear that having a high-quality live deal creates a higher bar for deals in the pipeline. In other words, the comparative options should be pretty darn good to keep progressing while something is close to in-hand. With Project Cascade off the table, there's no live deal raising the comparative bar, so the aperture naturally widens as I look for the next viable path forward. Top pass reasons in April: key person risk, valuation expectations too high, and project-based / quality of revenue. Lesson learned I left a meeting believing the seller and I had agreed on a price. We hadn't. We had agreed on a number without a shared understanding of what that number meant. A note card across the table—written on and slid back—would have surfaced the disconnect in thirty seconds. From there we could have had a conversation and negotiation. Instead, the misunderstanding survived a follow-up meeting, a round of analysis, a request for more financial data, and finally an LOI. That's a month of work, on both sides, all to find out that we are operating from a completely different base assumption. I'm probably not the first person to learn this lesson, and I won't be the last. But it's the kind of thing that's easy to nod at in the abstract and forget in the moment. Going forward, no number leaves a meeting unwritten. The cost of writing it down is zero. Looking ahead The primary focus has shifted back to generating deal flow. The proprietary engine is humming along. The language training services business I mentioned in March is moving forward; we have an NDA in place and financials should arrive shortly. A pet boarding and grooming business, also in Washington, is under NDA with an initial owner meeting set. A previous proprietary conversation that had gone quiet earlier this year has resurfaced, though the owner has been difficult to pin down for the next step. None of these is a sure thing, but the volume and quality of proprietary conversations is the highest it's been in the search to date. How you can help (my only ask) If you come across a business in WA or FL that provides essential goods or services and generates $750k–$3mm in EBITDA or pre-tax profit, I’d greatly appreciate an introduction. A more specific ask this month: if anyone in the network has experience structuring creative deals—particularly with forgivable seller notes, earn-outs, or other deferred-consideration mechanisms used to bridge meaningful valuation gaps in lower-middle-market deals—I'd welcome a short conversation. Your continued support means more than you know.