(QUESTION) Self-Funded Searcher Access to Large Deal CIM

searcher profile

January 20, 2024

by a searcher from Louisiana State University at Alexandria in Youngsville, LA, USA

Hello everyone. I am conducting a self-funded search within a small geographic area while also working full time. I recently contacted a broker to inquire about a listing with advertised $1.7MM EBITDA. Upon completing the NDA and personal financial questionnaire, The broker declined to provide the CIM. I'm sure the broker is merely trying to avoid a large amount of tire kickers to eventually lead to nowhere.

My question for the community is, What are the generally accepted practices within the ETA community for a self-funded searcher (who knowingly will need investor support to close a deal) to review a business valued above that which his/her personal situation can support?

I would certainly appreciate any insight.

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commentor profile
Reply by a searcher
in New York, NY, USA
It is important that you be able to credibly convey your ability to close the transaction. That will mean having investor support letters, something from a bank, or some other reputable third party vouching for your ability to secure financing to close the transaction. Don't be too linear in responding to financial questionnaires, as often they are not built for searchers. Your bank statements don't matter in determining how much capital you have to invest. The soft commitments from investors matter! So make sure you're talking to folks in the ecosystem and have a launching pad for support when you do find the right deal.

Credible support from third parties as well as a professional-looking brand (on a website, a private email address, etc., as Chris mentioned above) should keep most doors open with brokers. Some brokers will still slam them in your face -- but think about whether that's the kind of person you want to be dealing with on the biggest transaction of your life anyways. For those that seem on the fence or doubtful of your financial capacity to close, hop on the phone with them. If you find brokers consistently deny you access, that may be a time to self-reflect on how you're presenting yourself, both professional and narratively, because whatever they're seeing is likely what the seller is going to see too.
commentor profile
Reply by a professional
in Janesville, WI, USA
I'd first create a strong buyer profile that you can share and a search website that lays out your experience and your objectives. This helps to tell your story, shows legitimacy and that you're serious. Make it very simple and straight forward.

Tell the story very clearly of how you plan to fund the acquisition if it's not all coming from you. You could even get a letter from a HNW individual that you plan help you with the down payment laying out their commitment to investing funds. If you get too much push back don't take it personal, just move on. They probably have interest from more strategic buyers. There are plenty of deals out there don't waste time on it!
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