PSA: Searchers Be Astute

With the rising cost of debt, the tighter lending requirements, and the increased use of seller notes/earn-outs to fund deals, Searchers seeking funding are becoming more susceptible to solicitations by less-than-ideal partners in the market. Some potential partners are legitimate financiers that provide expensive market capital irrespective of market conditions. Others, unfortunately, aren't partners at all and are out to target those that have failed to inform themselves adequately.

I recently connected with a fellow member of this forum who was claiming to offer capital as an institutional investor (i.e. SBIC, PE firm, family office, etc.). They, unfortunately, failed to answer basic questions regarding their investment thesis, provide verifiable examples of past investments, and identify the principal decision makers for an investment. This was after I signed a NDA and MOU agreeing not to disclose confidential information. After some basic research on my part from the information provided by the member, it was discovered that the solicitor was associated with a 'buy a business with no-money down' guru organization.

Searchers, please be astute. Many of you are highly-intelligent and trusting that everyone on this forum is legitimate. Not everyone is. There have been several posts about protecting yourself from bad actors and the current market conditions provide more opportunities for those actors to succeed in their duplicity.

If you haven't seen the following, please review:

https://www.searchfunder.com/post/zero-down-guru-sues-to-hide-the-truth-clinton-lee-re-jonathan-jay-buy-a-business-with-no-money

http://ukbusinessbrokers.com/business-acquisition-courses/


Stay informed and good luck!