I recently closed on a business, and as I think about how to thank this community by sharing learnings, I realize the best learnings should not be attached to my name. First, because it's a bit of "kiss and tell" where I would violate the privacy of the seller, who I respect. And second, because some can be harmful to my business. If I were to name myself, you would get a very slanted, self-promoting version of this :-) The business is a $500-700K SDE, product business with global distribution. but Purchased self funded. 1. Risk tolerance / mitigation. I am well convinced that this is the #1 topic in ETA. In product businesses, there is more risk and reward versus a local service business. Key risks here were competitive and regulatory. My background in product businesses (sort of in this tech domain) gave me lots of confidence. (or, gives others confidence in me, which is just as important). The seller accepted a large forgivable seller note, which helped me throughout the whole process 2. Regulatory. There is significant risk in this business. Increased regulation favors large companies who have capacity for R&D, legal, and other mitigation levers. On the other hand, large companies can be more risk adverse. This takes different DD approaches than standard ETA DD. You need to have plan B's and C's, and enough knowledge to feel reasonably confident you can pursue them. 3. IP. Patents are of limited value to small businesses. I will market the patents to customers but likely never enforce them, especially against larger companies. Any substantive DD (e.g., freedom to operate for yourself or competitors) is prohibitively expensive. Most IP/patent attorneys don't know what to do with ETA buyers - there is not a developed ecosystem like for transactions. 4. Purchase Price. Make the price that works for you, not for your ego or to share with others. 3x is a harmful benchmark IMHO. Model the multiple and cash flow in downside. My deal was like 3.8x but with a big seller note, would weather most downsides. I absolutely love my business, and I would never prefer a different business at lower price. 5. Upside. It became really clear as I moved through DD that the seller was just not pursuing tons of low hanging fruit (personal reasons). They had spent money on areas I would not do so (you need to know the business well enough to conclude this), and did not invest in areas that I think would have short term ROI. This seller did not work much. In a severe downside, I can get a full-time job and manage the business. (I know, mythical scenario right?) This made me very comfortable during DD and helped me look past the relatively modest negative learnings 6. Customer experience. I'm a huge believer in customer intimacy and doing right by the customer to build a great product. During DD, I did find some detractors who didn't like the product but felt confident that there was a stable base. If I believed it was due a flawed business model I would have walked. I needed to construct a statement like "the business makes strong cash flows despite these CX issues, and correcting them will .." Post DD, I have discovered major education gaps, which I feel very capable of addressing 7. Neurodivergence and ETA. I likely have ADHD and some autism. I did quite well in the corporate world, but really hated politics, authenticity, and low-meaning tasks. This is the absolute dream job for someone like me. Every day I have a half dozen really interesting strategic projects to work on. I doubt a service company would have done as well for me, though likely better than corporate. 8. AI. yeah, this is divisive. Claude is my second best employee. You need to know enough to QC, but it is incredible how much it brings down the entry bar. There are so many one-time tasks in setting up a business, where the how-to assistance makes it extremely easy. You need to be careful - know the limitations, where the visible usage will be adversely received by employees or customers, and to not allow yourself to fall into a dopamine trap. 9. Seller. I didn't get to know them until DD, and it took time for the relationship to warm up, but it was a great match and we really trust each other and talk highly of each other. Be graceful and open during the process. Take negotiations in stride - put yourself in their shoes and be generous when your personal cost is low. If you treat it as a tooth-and-nail fight, that is what you will get. 10. Marketing. This is most of the opportunity in the business, and it's fun challenge to find cost efficient means. It's both empowering and scary being the sole author of our content. The worst part of the transition has been Meta/Instagram transfer (IYKYK) 11. Authenticity. This is a niche market, where the users are very tight knit and resistant to outsiders - especially recent influx of corporate/PE capital. I think I am pretty good at being genuine and non-corporate, but it's also because genuinely love the market and not in for a cash grab. A different buyer would fail hard. Be realistic with your interests, passions and goals. I'll add some replies to the post if there are questions. I'm also happy to DM operators of similar businesses who want to trade notes.