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Derek Turner Profile picture
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Mar 18 • 6 tweets • 2 min read
I write a lot of threads about #SMBTwit topics like search funds, SBA-funded acquisitions, and operations.

Here is a live list of my threads to date:
My introduction / background:

Thoughts on cold calling during the search:

The differences in roles/costs of lawyers in Traditional Search vs Self-Funded Search:

A deep dive into a particular SBA gotcha that I ran into - post-close working capital adjustments:

Another SBA pitfall to avoid - trying to use a liability holdback instead of an escrow agent:

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More from @AZ_SMB

Derek Turner Profile picture
Mar 21
In 90 days I racked up $63k in diligence costs buying an SMB.

Here’s a weekly timeline of each $ incurred.

Broken deal costs are real. If you’re self-funded these are coming out of your savings.

Thankfully in my case I closed the deal!

A 🧵 to help you budget for your search:
Please note:

I am listing when costs were INCURRED, not paid. This does not reflect cash flow.

I’m rounding as needed.

This was a blessedly UNcontentious DD process. Simple and happy = cheap.

The most complicating element was SBA lender in the mix.
Here we go:

Week 1 - $0 Incurred
✔️ LOI Signed

Week 2 - $0 Incurred
✔️ Vetted / Finalized SBA Lenders / QoE Providers

Week 3 - $16,750 Incurred
$9,250 – QoE 50% Payment Upfront
$7,500 – SBA Lender Deposit (returned if unused)

Week 4 - $0 Incurred
Read 17 tweets
Derek Turner Profile picture
Mar 15
Here’s why I paid my lawyers $250k for one deal but $35k on another (identically-sized) deal.

It gets to some of the key differences between the Search Fund model and the self-funded model.

It’s a thread, but here’s the upshot: $250k bought insurance, and $35k gave me cash.🧵👇
Deal #1 was a traditional Search Fund deal, so my search and the acquisition were being funded with outside investor equity.

These were established investors who have done tons of deals. My investor group was 💯 – full of A+ operators and mentor-minded folks.
Deal #2 was an SBA self-funded deal with some investor equity along with my own.

Notably, Deal #1 was all equity, while Deal #2 had a lender (makes the $35k even cheaper!)

Both deals were small for a Search Fund / large for an SBA deal. Within 10% Rev/EBITDA of each other.
Read 25 tweets
Derek Turner Profile picture
Mar 10
After lurking on SMBTwit, I’d like to introduce myself: “Turncoat Search Fund Guy”

I did a traditional search fund in 2017, bought in 2018, sold in 2022

2 mo ago, I turned my back on the SF model, signed a PG, and bought an SMB

7 BIG diffs btw “Search CEO” and “SMB Owner” 🧵👇
Some background: I did a local (AZ) search w/ traditional search investors in 2017 post-GSB.

Local focus was a hard sell to investors, but I’m passionate about my home state & knew there was plenty of opportunity

Found a prof. services biz via cold call. Closed early 2018.
It was a rough ride (future thread) but finally sold after 4 years.

President was running it by that time, so I left the company after close.

Now what? I loved operating but knew the pain of being “stuck” in an underperforming, investor-owned biz with my equity upside fading.
Read 18 tweets

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