Best methods for contacting owners who are not actively selling?

February 04, 2022

by a searcher from Vanderbilt University in Tennessee, USA

First Searchfunder community post here. I've heard of many successful deals occurring off-market that originated from searchers cold-calling owners who aren't actively selling their businesses.

For those of you who have experience with this, what tips do you have for owner outreach? What seems to work well in getting your foot in the door, and conversely, what doesn't?

I'm early in my search and excited to be a part of the community. Thanks!

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Reply by a searcher
from The University of Texas at Austin in Fort Worth, TX, USA

Obviously, there are multiple types of cold outreach with differing levels of scalability. Perhaps scoring your interest level in particular leads can drive what level of effort to put into various buckets.

In 2022, the odds of an owner having never encountered a searcher are getting smaller and smaller. But whether they have or haven't, I think you need to mentally split the challenge into two parts:

1) Getting an owner to respond to an email, return a phone call, etc. In my experience, personalization is key here. Your interest in their specific niche, your knowledge of their specific business, any personal ties you have to their geographic area, their customers, etc., plus any commonalities you can share with them as a person (school alumni, interests, etc.). All of this can be automated and scaled.

2) Getting an owner to have an affinity for and understanding of the search fund model such that it is compelling enough to invest time. If you can ever get them on the phone or get an email reply, you can start to explain/clarify the model.

In short, my opinion is whether you're a search fund or not is fairly unimportant to making that first contact, what's most important is trying to establish some type of rapport to cut through the noise and make them want to get in touch with you.

Reply by an investor
from Harvard University in Dallas, TX, USA

I searched nearly 15 years ago and I don't think the basics bave changed. Consistent outreach is key. I liked physical letters but we sent a first letter, follow up, email then called. The trick is to prepare all of these at the same time. By the time you actually get the owner they'll often have some recognition of who you are and your persistence is likely a plus point (they're entrepreneurs after all). The biggest single factor is knowing about their business specifically. As an owner you get hit up frequently. Mainly by middle men with no real knowledge of anything other than your industry and a doing a scatter gun approach.It's often the case that search funders, as that's the world they are from, tend to assume most owners have heard of the model and that other searchers are the competition. This is almost never the case. If you have researched the business, the owner and worked out some shared commonalities, you'll be differentiated. Of course that all takes quite a bit of work, which is why the industry specific approach is the most likely optimal approach with these tactics. If you're going with a broker approach , then it's way less useful to spend your time doing this.

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