Off-Market deal-finder
March 09, 2024
by a professional in Salt Lake City, UT, USA
Does anyone know of any service providers that simply find me an off-market business to buy? Specifically, I give them strict criteria, they do all the outreach, find prospects, filter them by verifying their financials, and then passes them off to me to make a deal? I came across a site called Justdealflow.com and they claim to do this in addition to completing due diligence. The price for them is $30,000 which I think is fair, but it sets my "scam" radar off.
in Durban, South Africa
I currently provide a very similar service on retainer for two different companies, but with a slight twist::
1. I am integrally involved in the deal negotiation, because...
Finding and evaluating off-market deals is HIGHLY relational, and suddenly handing the seller off to a stranger at deal time kills trust and the deal... this is precisely why searchers (paid or not) handle this bothersome part of the process .
2. I provide double-sided due diligence, because...
It's one thing to be sure that things are reasonably consistent with what is being presented (I'm yet to meet an acquirer who says that everything was exactly what I expected it to be), but you also need to have a strategy or playbook or theory for how you're going to evolve and ultimately exit the business -- assuming you're not just buying yourself a job -- and then you need some cohesion between that theory and your on-the-ground operational execution, including enrolling and aligning existing employees, suppliers and customers. Which leads me to...
3. I retain a sliver of equity (incentive) and long term executive involvement for my efforts, because...
As a Searcher, you want to ensure that (just like you are) your outsourced deal finder is incentivized to make the acquisition deliver on the Las Vegasesque promises of prosperity and pleasure.
As a professional service (and assuming they have a track record and glowing testimonials), I don't think $30,000 is an unreasonable price tag, and if you're being paid $300K - $500K to search, this might be a more viable approach than sending 10,000 emails to strangers, but...
Even at $2,000/ month + 5% of additional gross profit (after the first 20% growth), a lot of people still consider me to be very expensive -- which is great, because the amount of passion and personal skin I throw into the game is hardly scalable.
By contrast, a more scalable done-for-you service is going to come with trade-offs, and knowing what those are and how you can offset them and mitigate their impacts, is obviously critical to your success.
I hope that helps you.
from The University of Chicago in Rockford, MI, USA