Better Buy-Side Report Building / Deal Sourcing — Is This a Need?
June 12, 2020
by a professional from Berklee College of Music in San Juan, Puerto Rico
Hey Folks! Colleague referred me to SearchFunder for guidance on this project.
For context...
— Sold a <$100k online business in late###-###-#### Began seeking online businesses to purchase.
— Enjoyed the process of searching / vetting deals for myself, though the prospect of operating wasn't appealing
— Asked "I wonder if I can do this sourcing/vetting thing for other people?"
— A few months ago, began creating reports on deals I've found at least worth investigating, like this: https://bit.ly/3cgmCVW
— Continued doing these free for friends, as practice. Plan is to make these reports available in a paid-newsletter format.
My questions are...
— Is there really a need for this? If so, what is my role technically called in M&A-Speak? Analyst/Appraiser/Something Else?
— What type of firms / individuals will benefit most from reports like these? Is it even worth doing for deals this small?
— What is missing from a report like this? I have zero formal training, coming from a background of operating; Not some MBA.
Appreciate anyone's feedback; I'm totally enraptured by this new vocation but have been struggling with where to take this whole "Analyst / Report-Making" thing.
Not sure where it belongs in the grand scheme of M&A and can use guidance more than anything. Appreciate your time.
from Columbia University in New York, NY, USA
The need is GREAT. Access to good deals that are not listed is the lifeblood of search. In M&A speak you would be a financial intermediary, an originator in this case. It would not be a huge jump to brokerage. To your questions:
On need: This is pretty similar to the online business brokers. There are deals this size, yes, but they are off the radar of most searchers in the traditional guidance. I would check out FE International and Empire Flippers to look at two brokerages that have hands on this market.
Types to benefit: Anyone in the online eCommerce space. People tend to pick their vertical specifically. For instance, I am only interested in SaaS businesses with fee-based subscription models (little to no advertising). The hardest part will be the matching problem. Like any brokerage, you can curate an audience.
Missing: You'll definitely need an income statement. Monthly recurring revenue is very big in SaaS. Lifetime value, also important. And average revenue per user. I would take a loo at some of the brokerage prospectus material and take your cues from there.
from Babson College in Austin, TX, USA
The framework/formatting is helpful. Template itself could be monetized. You can also consider doing this "as a service", so, for $X you'd do this OR have a team do it for a searcher.