Thread by @tsludwig

Frustration and opportunity. A rant.

Small business brokers (selling firms w/ <$1mm in CF) are almost universally bad and do tremendous disservice to their clients.

They charge high rates (5%-10% of purchase price is common) and in return...

They post the listing on their website, sites like bizbuysell, and email blast their buyer database.

The CIMs they prepare are often laughable at how little info they convey and how little effort went into their development.

They 'qualify' buyers by sending out a questionnaire

... and, maybe, having an initial screening call.

Maybe they will offer advice to the seller about merits of any offers that come in, help to create a sense of scarcity for the asset, and help buyer to achieve their objective(s), if it aligns with theirs.

Data room...perhaps

Assistance in assembling and managing due diligence process and materials - unlikely.

At this point, the seller is often very freaked out and if relationship with buyer isn't building trust fast, deal can crater out of seller's fear and anxiety.

All the while, broker is controlling access between parties and dropping subtle signals that they are clearly just worried about their fee.

From a buyer's perspective, this is tedious and annoying. Upside - if you are willing to wade through all of this and sort through 100s...

of mediocre to bad opportunities, you can find gems!

There are some great small brokers out there that care deeply about their clients and represent them well, but they are the minority.

I keep waiting for someone to really build a brokerage that does this right...

Not with some of their team, but with every broker in their system. Give them training, tools, mentorship...learn from investment banks and share case studies. Could be a great and fulfilling career for a lot of people, esp w/ aging sellers coming down the pike.

/end of rant