SMB War Story in 10 Parts


For every extra $1 in EBITDA sellers get you to believe, they get paid $4.

They are incentivized to misrepresent their companies. That’s just facts.

I almost lost a million dollars of my own money on this deal. Don’t be a FOOL like I almost was.


I was looking at a $500,000 SDE company in the security industry with a few primary contracts with major players. Everything looked great. I sent an LOI.

The seller agreed to sign but wanted me to visit the company in Texas. All good.


In return, I asked for updated financials since the company had changed in the 12 months prior.

Seller said he’d bring his accountant to the meeting. They’d pull up Quickbooks, and let me look around. That worked for me.


I arrive in Texas and drive straight to a Starbucks for our meeting. You want to know the first thing that seller said to me?

Elliott, you won’t believe this! My Quickbooks is down!

It had been down all morning, apparently. They were looking into the problem. Contacted Intuit.

I rolled my eyes.


I knew his story was off. He mentioned he used the cloud version of Quickbooks—which has an uptime of like 99.9%! Quickbooks being down for half a day is basically unheard of.

What are the chances this would happen on the day I visit?


I wanted to head straight back to the airport, and move on. But, I figured there might be a lesson here.

I wanted to see how far they’d take this lie. I knew it wouldn’t be the last time a seller tried to misrepresent themselves in a deal.


I spent the rest of that day and the following day with the seller.

He had his whole team in on the lie! His salespeople, bookkeeper, and accountant.

All of them.

So, what’s the true story behind the lie?


He bought a business with an SBA loan and couldn’t run it. The numbers were going down.

He was hoping I would believe the QuickBooks story and buy a company that was on the way out of business.

Not gonna happen!



➡️Build a relationship with the seller, but stay skeptical. They have their own motives.

➡️Always check the numbers. The truth will come out if you do your diligence.

➡️Trust your instincts. Check anything that makes you uneasy.


Remember this story whenever you interact with a seller and save yourself from a bad deal.

For my experienced buyers: what is the biggest lie a seller tried to get over on you?