Take Five #096: What to ask the seller during an SMB acquisition call, and more
Codely v2.0 public release is here
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What has changed in our latest release?
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All new features available for all public channel users
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Coding collaboration with over 200 users at once
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Take Five #096: What to ask the seller during an SMB acquisition call, and more
1. Watch out for the “Confession of Judgement” clause in a purchase agreement
2. Differences between the venture capital and search fund paths
Venture offers the chance to get to a first-row seat to the future. To work with founders and to use numbers and analysis to make decisions about putting capital at risk.
It also comes with the stress of needing to raise money regularly, to have the hustle to be able to see entrepreneurs before others have a chance to do their homework, and the vision to see where things are going.
A (well-capitalized!) search fund allows one person (or a small team) to build a small or medium-sized company with a head start (read: not quite from scratch). The hard work is finding the company, not building it. The benefits are that (a) it's easy to measure your impact on the organization and its customers; and (b) the work is exciting and intellectually stimulating.
Read the rest of Saumil Jariwala’s post here.
3. Negotiating seller note forgiveness if business performance declines after the sale
4. What to ask the seller during an SMB acquisition call
5. How interest rates impact business acquisitions and investments
In inflationary times, such as the one we’re currently in, it’s easy to be alarmed by interest rates going up and overemphasize the risk inherent in higher interest rates.
However, there’s a risk in lower interest rates as well. When interest rates are low, demand increases. And whether you’re looking at homes or business acquisitions, low interest rates turn the market into a seller’s market. When that happens, buyers are willing to pay more for the exact same asset. So although supply hasn’t increased, the low interest rates combined with increased demand force you to pay double for the exact same asset.
Monthly payments may be more affordable, but prices in low interest rate environments actually go up.
Me? I’d rather buy something in a high interest rate period when no one else is buying.
Read Buy Then Build’s article here.
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