Experience Performing Due Diligence with a Full Time Job | Self-funded Deal

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February 23, 2024

by a searcher from Lousiana State University in Houston, TX, USA

I hope to be under IOI for roughly $6 million business next week and LOI shortly after.

The capital structure requires no outside equity as I will use SBA debt, seller note, and a personal equity injection. The bank underwriting recently underwrote this exact business. Still, it didn't close as the last buyer walked for a bigger transaction, so the bank is comfortable and familiar with the credit, which should make that process more efficient.

For context, the business is in the service industry, with about 100 employees, 100 customers, and few tangible assets. Revenue is ~$4.5 million, and SDE is ~$1.5 million. The business has a long history and is family-owned. There is some customer concentration but a long track record of customer retention.

I work full-time on an M&A team for a large corporation with standard hours most of the time unless a deal becomes urgent. In addition, I don't live near the business I hope to buy- it requires a flight to get there within a reasonable time. Thus, meeting the owners in-person on a regular cadence will not be possible. I work from home on Mondays and Fridays and should be able to host meetings with the owners and 3rd party consultants/ lenders in the mornings. I plan to engage a QoE provider and legal team.

Has anyone kept their FT job during diligence? If so, how was your exp.? Any recommendations/things to avoid?

When did you eventually quit your job? When did you start prioritizing the deal over your FT job?

For anyone who bought a business far away, how many times did you visit the business/owners in person?

How did the eventual move go? My wife will probably stay in our current city for some time while she tries to find a replacement job, and we will also have to sell our house once she moves, which will probably be stressful. Any advice on that end?

Lastly, I am curious at what point you engaged QoE and Lawyers and how much you spent. Any diligence GANNT charts or timeline materials would also be helpful.

Thanks in advance.

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commentor profile
Reply by a professional
from Villanova University in West Chester, PA, USA
Hi, I'd be happy to share how we work with clients as legal counsel. A number of our clients have had full time jobs during the search and due diligence process. We recommend engaging an attorney immediately after signing an LOI. We'll promptly provide a due diligence request list so the seller can populate a data room with the materials while you get started on business and financial due diligence. In addition, we'll provide a gannt chart and timeline for the closing timeline and checklist as well as a list of the top legal issues for the parties to discuss prior to drafting the purchase agreement that should be ironed out as soon as possible. Feel free to send me a DM if you'd like to discuss this further. You can schedule a complimentary consultation through the link in my bio. Good luck on getting this deal under LOI!
commentor profile
Reply by a searcher
from Northeastern University in New York, NY, USA
Just make calls in your free time. Take calls at lunch. Whatever you have to do. Due diligence is done by professionals not you. You should have plenty of time. All youre doing is playing “coach” and making sure all the moving parts are going in the right direction. I disagree with the notion that search-funding is time consuming. It is not. Find a good deal and close it. Searching is not a “job”, you are not trading time for money here. Leverage your team.
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