"QUALIFIED BUYERS ONLY - NO SEARCH FUNDS"

August 25, 2021
by a searcher in Austin, TX, USA
Take a look underneath the business description header:
https://www.bizbuysell.com/Business-Opportunity/leading-a-v-systems-design-integration-production-and-rental-company/###-###-#### /?d=L3RleGFzL3RyYXZpcy1jb3VudHktYnVzaW5lc3Nlcy1mb3Itc2FsZS8yP3E9YkhROU16QXNOREFzT0RBJTNE
I've had several professionals discourage me from using anything related to the term "search" whenever I talk to a broker. I'm not technically a search fund so it doesn't matter to me but I'm surprised at the amount of pushback that searchers seem to be getting from some in the intermediary community. Do they not understand the model? Are they trying to avoid sophisticated buyers? Do they think the deals are too messy? Why no love?
from Babson College in Boston, MA, USA
from Northwestern University in Chicago, IL, USA
Some don't understand the search fund model or don't believe in it. They don't think that relatively young, highly-educated, and well paid professionals can adjust to work life that's not a "cushy" 9-5 corporate job. Obviously as a business owner, you wear all the hats. Brokers get a lot of interest on their engagements, much of it unqualified, so naturally the experienced ones usually take a cautious, even skeptical, approach when dealing with potential buyers.
Along the same lines, I've had a few brokers get frustrated with searchers looking to do forensic audits, as part of due diligence, on businesses with enterprise values of $1-3 million. Besides time and cost, forensic audits can feel intrusive for sellers (keep in mind, brokers usually work for sellers, not buyers). It doesn't help that with most small and lower middle market businesses, financial record-keeping and controls can be quite messy.
With all that being said, my bank is able to provide searchers with "Pre-Approval Letters" for business financing (after reviewing some basic personal documents). With this in hand, brokers and sellers are usually more receptive, willing to negotiate, and motivated to get a deal done. Not surprisingly, having a bank involved in the process early-on makes a huge positive impression on the other side.
For any searchers that believe they can benefit from a pre-approval, feel free to reach out to me directly-- redacted or###-###-#### .