Any success contacting seller’s brokers?

searcher profile

June 18, 2020

by a searcher from Northwestern University - Kellogg School of Management in Fort Lauderdale, FL, USA

I reached out to a broker on a few businesses they had listed. I signed their NDA. Then after a few wasted emails he wanted a resume. Then send me other businesses when I specifically told him I’m interested in HVAC service. Have any of you had success will brokers?

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commentor profile
Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA
^redacted‌, sorry you had that experience. Just like with any group, there are above average, average, and below-average brokers. I just read ^redacted‌'s blog post referenced above. Agree with a lot of it, but definitely not the part about "Going behind their back directly to the seller will reduce their trust in you, and potentially scuttle the deal; just beg forgiveness." I would change that to, just don't do it. In addition to losing our trust, you probably violated the NDA, and will also lose the trust of the seller.

The benefits of working with good brokers/intermediaries are that the sellers are committed to selling, we have scrubbed their financials and have gotten them to understand what a reasonable valuation and terms will be, have gathered a fair amount of information, put together a detailed CIM, will manage the noise of the process, and will coordinate due diligence, all while the seller stays focused on running the business.

To work well with us, (I) have a good idea of what you are looking for, (ii) be prepared to sign an NDA and provide some information about your financial wherewithal, fund/investor status, prequal status with a bank, etc. (the more information you can provide here the better -- some searchers have formal/committed backing, for others, it is akin to an aunt or uncle saying at a family BBQ that they would consider backing the searcher if they found something interesting; and (iii) put your best foot forward, as there could be several interested buyers and your searcher status may be a positive.
commentor profile
Reply by an intermediary
from University of Miami in Davie, FL, USA
Hi Joe-I am broker in South Florida. My suggestion after 20 years of selling businesses. Prepare a website or a mini bio about yourself. Always try to help the broker by explaining where you are getting your funding. If SBA then get prequalified . If another private investor is investing in you then get a letter that they are willing to help you with the acquisition. Brokers get many inquiries per week and 98% of buyer requests never end up in a sale.
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