What I Wish I Knew While Searching

August 09, 2024

by a searcher from University of Texas at Austin in Austin, TX, USA

Last week I fortunate to close on an east coast flooring business with $1mm+ in EBITDA.   Like every search deal, there was hair on it, but we secured a 7a loan at 8.75% over 14 years (fixed for 5) and raised the needed equity quickly.   

Things I wish I had known before: 
-Don’t waste your time looking for a bank or investors pre-LOI (my bank and all investors came after LOI) 
-The process will take longer than you want, but when you have commitment letters and signed contracts you’re very likely to close 
-Loan brokers can be a good resource, but referrals and intros from the network you build post-LOI can be even better 
-You probably aren’t going to raise money at 1.5x step up and no pref  

With all that said, if you’re under LOI and want a loan reference or tips on raising equity don’t hesitate to reach out, I may also write a follow-up post on more that I wish I’d known (like timelines for each step post-LOI) if folks are interested.

Lastly, I want to give a huge thank you to the searchfunder community. I relied heavily on some folks here and couldn't have done it without them.

107

Reply by a professional
from Youngstown State University in Birmingham, AL, USA

Thanks for sharing these insights, and congratulations on closing the deal! Your point about focusing efforts post-LOI really resonates—it's a game changer in how you allocate time and resources. The reminder about the timeline stretching longer than expected is also spot on; patience and persistence are key in this process. I’d definitely be interested in a follow-up post, especially around the specific timelines and steps post-LOI. The more detailed, the better! And kudos to the Searchfunder community—I wish I'd found it sooner!. Looking forward to connecting more and learning from your experience.

Reply by a searcher
from Case Western Reserve University in Cleveland, OH, USA

^redacted‌ thanks for the tag. ^redacted‌ congratulations for closing on your business acquisition! In Promise Partners - the ETA accelerator I belong to, any one who becomes a business owner is immediately elevated to "Hero" status. Please keep sharing your experiences. It is helpful as we continue to search.

+105 more replies.

Join the discussion