Thread by @tsludwig

I think brokers serve a purpose, but I don't think people should neglect proprietary sourcing just bc brokers have expertise and pre-existing and ongoing deal flow. In my experience, a mix of direct and brokered sourcing yields optimal results.

A few other thoughts...

/1

https://twitter.com/NickHaschka/status/1309866744912080898

- Brokers do qualify sellers, which is really valuable since a lot of time can be wasted talking to sellers who think they want to sell or just want to get a free valuation.
- Good brokers maximize the sale price of a company through good marketing and making an auction.

/2

- Brokers that do a poor job create some of the best deals for smart buyers
- Relying only on brokers means you only see deals they represent. If you like an industry, you can wait a long time to see 1+ deals in that sector. If you direct source, you control what you look at.

/3

- Developing the skillset of ID'ing, contacting, and selling an owner on why they should sell to you is a great test of an entrepreneur's grit & sales ability, both of which are essential in running a small company.

/4

- Brokered deal flow is a great way to generate new industry ideas for direct sourcing. Coming up with target markets is the hardest thing about sourcing IMO and using both methods creates a virtuous cycle and exchange of ideas that can be cross-leveraged across both methods

/5

Ultimately, the goal of searching is to find a great business, so why restrict the universe of potential deals by only relying on brokers?

(caveat, 1 reason could be time -- part-time searching is hard and if I had limited hours, I'd probably rely more/solely on brokers)