Searchers: Before we launched the fund, my wife and I invested personally in 12 acquisitions. Two have already stood out from the rest - one has returned a 105% IRR, the other 71%. I shared the four things they have in common in a recent LinkedIn post, and the response was strong enough that I wanted to bring it into the newsletter with a bit more context. 1. Both deals were run by operators who make the trains run on time - plow horses, not show horses, to borrow from Jim Collins. 2. Both deals had challenges at the time of acquisition, which kept the multiple lower, and both buyers were specifically well-suited to fix the problem. In both cases that problem was sales and marketing, which the new owner meaningfully improved post-close. 3. Both converted profits to cash quickly and required little capital to grow. 4. Both were in industries that rewarded quality delivery and allowed you to charge a premium for it. None of those things are accidents, and none of them are unknowable before you sign an LOI. They're things you can screen for. I'd genuinely love to hear what others are seeing in top-performing acquisitions - hit reply and let me know. Partner Perspective: Chat Joglekar, Baton: Diligence Cuts Both Ways One benefit of running a marketplace is that we see both sides of the deal, and the gaps that surface long before an LOI is ever signed. Buyers come to pre-LOI diligence fixated on one question: is this business worth it? What they miss is that the seller is running diligence, too. Every question you ask, every offer you frame, every industry you chase tells the seller whether you're a credible buyer who'll actually close. My co-founder Dylan Gans dug into this last week in a webinar with Peggy Fasano and Adam Markley from PROX Search Capital: two operators-turned-investors who've also sat on both sides. Here's what they shared about doing your due diligence while still making a great first impression. Show, don't tell. When you make an offer (informal or formal) don't just hand over a number. Walk the seller through why it's that number. Don't tell an owner they're worth $4M when they think they're worth $5M. Show them the earnings adjustments you made and explain them. Reference that you've talked to two lenders who support the deal at that level, and name the concerns they raised. It builds credibility, and just as importantly, it keeps a lower offer from being misread as a lowball. The seller sees a buyer doing real work, rather than pulling a figure out of thin air. Have a real thesis. Brokers track what you pursue, and a buyer chasing a plumbing company, a CPA firm, and a marketing agency in the same breath is broadcasting that they don't actually know what they want. That buyer doesn't get prioritized. The credible buyer pursues with focus; ideally what Adam calls "one degree of separation" from a core competency. If you've never managed people, or you can't sell the product or service the business lives on, that's worth sitting with honestly. This may not be your deal. Finally, drop the jargon. Don't tell a seller about your "buy box." That phrase means nothing to someone who built a business over thirty years. Show genuine interest in the industry, or relevant experience in it, and be specific about how you'd carry their legacy forward. That's what makes an owner lean in. It became a running joke on the webinar that everyone kept calling everything "so important." That's easy to do when there's so much to evaluate the first time you sit down with a listing. But the truth buried in that joke is to not lose sight of the strongest factors among all the numbers. Relationship-building and pragmatic, downside-focused structuring matter just as much as the financials, and the buyers who internalize that are the ones sellers choose. There are sellers on Baton ready to find the right buyer now. One NDA puts you in front of every one of them. See what's available at baton.com. Plus: • A helpful (and humorous) table of the differences between add-ons, bolt-ons, and tuck-in acquisitions. Any nuances you think were missed here? • Helen Guo of SMB Deal Hunter created a resource guide for first-time buyers that includes an IOI template, an LOI template, and a virtual deal room. This is an excellent starting point if you’re new to search - and the best part is, it’s totally free.redacted