Proprietary Deal Process Question

searcher profile

January 14, 2021

by a searcher in Tulsa, OK, USA

Is the general process for proprietary deals to:

Pick industry or region
Develop list from database of choice, like ReferenceUSA
Qualify lists using the revenue and or headcount data
Reach out to qualified leads

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commentor profile
Reply by a searcher
from Westminster College of Salt Lake City in Salt Lake City, UT, USA
One of the best places to start is with accountants & attorneys who have dozens & dozens of clients because they are who a business owner will talk to first. There's a lot to say about getting down & dirty in the trenches & grinding out a deal that wouldn't have been a deal otherwise. Some say off-market deals are where the most alpha can be found because dealmaking has gotten so competitive & so efficient, if you find a deal where brokers are involved it will be priced such that there's very little alpha left after taking their fees into account. The Efficient Market Hypothesis does seem to be bleeding further & further into the private markets, which is why I think there's so much value in getting down & dirty. to find that one piece of proprietary info that hasn't seeped into the market yet or been priced-in. I will say this much, doing deals today is nothing like it was for my great grandfather & grandfather who barely needed a sharp edge to carve out an opportunity in America (as seen in the TV show in the link below).

There also seems to be a little luck & serendipity needed for a deal to come together. Many elements have to align & some of them we just can't control. I've found that if I force something, I regret it every time. You've got to be in the right place at the right time, with the right people, in the right market & it has to be the right business. But as my great grandfather said in this famous documentary TV show, which was broadcast nationally in the 60's (link below): "The harder I work the luckier I am".

If you are looking for some entrepreneurial inspiration, I highly suggest you watch it. I can almost guarantee that you will love it. Especially if you're a history buff or just like that amazing era in America, an era that seems all but lost these days. The greatest generation couldn't have been more true.

https://www.youtube.com/watch?v=tqnUsuJJD5U
commentor profile
Reply by an intermediary
from Arizona State University in Las Vegas, NV, USA
No one approach is perfect. First of all, you have to understand what you personally desire (location, industry, revenue size, personnel size, asset load, etc.). If you really don't have a good picture, I suggest looking through the listings at BizBuySell. Not for deal flow but to see what does or does not attract you.

Once you have a good feel for what you are looking for and can clearly articulate it in a very brief statement, tell everyone you know that you are searching. Attend meetings where influencers gather - chambers, AM&AA meetings, ACG meetings, TMA meetings, etc, Do not feel a need to work the entire room. If you can find out in advance who is attending, get the list and try and target your conversations. Please remember that none of us are that memorable - reconnect with those people within 36 hours or they will have a hard time remembering you. Stay in front of them and ask them for recommendations as to others with whom you should connect.
I
f you do have a specific industry in mind, see if you can become an associate member of the industry alliance. You may be able to access member lists that way.

Also, do not disregard intermediaries. We have many businesses on the market and are looking for buyers.

Happy hunting!
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