I generally try to steer away from these competitive auctions. As a searcher, whether funded or self-funded, you’re probably not the highest bid. Your pitch to the seller is entirely different from PEs and family offices that are looking at the business as an investment (whereas you’re looking at it as a entrepreneur). In fact, I go out of my way to pitch to the sellers that I’m the opposite of a “financial buyer”. I want a seller that cares about those things and are not just looking for every last dollar (e.g. focus your message on maintaining legacy, you’re not just about dollars and cents, you’ll be taking care of their employees, staying independent, you’re an entrepreneur just like them, etc etc). If these messages don’t resonate with the seller, then I generally just go bark up a different tree. Too many high quality businesses out there (that aren’t well suited to a LMM PE buyer) for us searchers to have to chase broad auctions. Just my two cents.

It depends on how transparent the process is. At times brokers use this technique to Jack up the price. You have to know what is the highest you are willing to pay and issue an offer with a 48 Hour expiration.