Sub 1M e-commerce deal in Poland / Europe - looking for guidance

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September 03, 2024

by a searcher from Polish-Japanese Institute of Information Technology in Warsaw in Warsaw, Poland

First time searcher, I am evaluating a lifestyle/pet brand for sale in my network.

Overall thesis is that pets is a growing segment and the current company is run by enthusiasts, not managers.

Two questions
1. I don't have the capital to acquire it, what are the typical structures one would offer to the investor? Ideally I'm looking for a generic diagram explaining the deal dynamics.
2. For such a small acquisition, does anyone here recommend tactics to find potential investors?

Apologies for the generic nature of the questions!

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commentor profile
Reply by a searcher
from Drexel University in Sofia, Bulgaria
1. Financial Analysis • Revenue and Profit Trends: Review the company's financial statements (P&L, balance sheet, cash flow). Look for consistency in revenue, profit margins, and growth trends over the past few years. • Profitability: Assess the profitability of the business. This includes gross margins, net profit margins, and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). • Cash Flow: Ensure that the business generates positive cash flow. Check for seasonality in cash flow, especially in lifestyle and pet brands. • Debt and Liabilities: Evaluate the company’s debt structure and liabilities. High levels of debt may require you to reassess the valuation or deal structure. • Customer Acquisition Cost (CAC) and Lifetime Value (LTV): Assess the efficiency of their marketing spend. Ideally, LTV should be much higher than CAC. • Inventory Management: Check how well the business manages its inventory. Excess or obsolete inventory can be a warning sign.
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Reply by a searcher
from University of Dublin, Trinity College in Dublin, Ireland
Thanks for the tag ^redacted‌

Great hitlist ^redacted‌

^redacted‌ - happy to trade notes on value add for this ecomm Opp - for finance options / structure many other SF community members can advise.

I advised on merchandising and promotions microservices for ecomm intensively for a year while at talon one - could be relevant here. Have a partner who is building a solution for managing rebates and wholesale for pet stores / retailers - so we have a couple of topics to trade notes on. Please DM and we can go from there.
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