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Brent Beshore @BrentBeshore
, 6 tweets, 2 min read Read on Twitter
Have gotten quite a few questions/comments about this piece. Figured some of my replies might be worth sharing:

"Why help create competition by encouraging new buyers?"

Hopefully the piece was a dose of reality. Plus, the market is outrageously large and helping people is fun.
“Search funds are usually only two years. Timeline seems excessive.”

It’s not. Challenge with search fund data is the survivorship bias. Most failed searches aren’t reported. Gives the illusion that success is far more prevalent. Can you get lucky? Yes, but deals take time.
“How does one spend $500K outside of searcher compensation?”

Only about 20% of deals close after a letter of intent in the LMM. Misfires are expensive.

Travel for three years = $100K
DD on two failed deals + one completed deal = $300K
Everything else over three years = $100K
“$150K in fees? That’s prohibitive on most small deals.”

Yes it is. When you see low multiples, those don’t take into account transaction expenses. Adjusted, multiples are far richer. Reason why most small companies never transact. More profitable to liquidate.
“Money is cheap and easy. You’re making it sound harder than it is.”

Short-dated, high-control money is far easier. Patient, kind, low-stress money is incredibly rare. Plus, most banks won’t lend on “blue sky” and balance sheets are light. Depends on what you’re shooting for.
“My uncle isn’t educated and makes a ton of money at his small company. It can’t be that difficult.”

Your uncle is likely street smart and gritty, treats people well, and commands loyalty. SMBs aren’t complicated, but require commitment that few have, including probably you.
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