SMB Newcomers Part 5: working well with intermediaries

Today's SMB acquisitions post (and post 5 in my series of intro posts) is about how to work with brokers and sell-side intermediaries. Since Private Market Labs is focused on brokered deals, we've spent a lot of time on this topic. Here are our top 5 insights:

1) Don't just show up, provide value: brokers have a ton of interest on their best deals, which means you need to stand out to move forward with those sellers. This means having meaningful conversations and demonstrating your personal/professional connection to the business.

2) Be persistent: if you want to get an intermediary's attention, pick up the phone, send another email, or try something creative. Cutting through the noise can be challenging - make people see you.

3) Structure is your weapon against PE: while you may not be able to out-bid a PE firm for a business, searchers can offer financing structures that maximize cash at close.

4) Be prepared: this means having more than just a lender letter of support. Be in talks with multiple lenders and have core components of your deal team thought out. The easiest way to stand out is by being readier to transact than the competition.

5) Be collaborative: many brokers have processes that might be burdensome, like financial disclosures and NDAs. Unless these come with sketchy terms or challenges (more on this later), it's usually best to go along with the broker's process. You'll make it further.

Hope this was helpful! I have a few more topics I'd like to cover in this series, but please give me a follow and drop a comment if you have ideas for things you'd like to see!