For large #ETA self-funded deals, who you calling? in LOI negotiations for a $3.5M EBITDA GovCon Prime business🤞 < 3.25x Purchase Price & < 2.5x Cash at Close likely #SBA + Parri Passu + equity raise deal hair is customer concentration but has contracts with 4+ yrs runway

QUESTION: given the new SBA changes, especially for rollovers... How do people structure seller notes in lieu of earnouts (or mirroring its effect but as waterfall notes)? Writing an LOI for a larger deal this would be perfect for... Cheers!

That Duke-UH final four game is exactly why the college basketball tournament is so special. A “skill” vs “will” matchup of 1-seeds that ended in phenomenal comeback fashion. I’m not specifically a fan of either team but wow … what a game.

Deal by deal private equity (aka Independent Sponsor) is NOT for the faint of heart. Here’s a breakdown on what it looks w/real data from our active process for a ~$20MM deal. BUCKLE UP for: getting told “NO” ~100 times and watching your network EVAPORATE…oh and while that’s happening, you’re accruing diligence fees ($10k -> $50k -> $100k++) and just praying you can keep it all together. 🧵👇

I’ve met at least 6 divorced couples who still own a business together 50/50 and get along ok. Always amazes me they can still be biz partners. Of course I’ve seen many more where this was not possible. But still.

5/ ETA Experts @dorse054, @blueprintsmb22, @SMB_Buyer, and @PhillySMB are former searchers who now own and operate the businesses they acquired. Their firsthand experience shines through in their invaluable insights on ETA, from the search process to post-closing transition and the challenges of running a business. Their advice on ownership and operations is truly top-notch.

🚨🚨More huge news this week!🚨🚨 This time Rollover Equity with SBA Loans. As the community may well be aware, in Spring 2023 the SBA updated it's SOPs for the 7(a) program to allow for partial changes of ownership where the seller retained some equity in the business. BUT, it had to be a direct stock sale in the operating company. As of December 6, 2024, the SBA authorized updates to the SOPs that now allow for multi-step partial changes of ownership where the seller retains equity indirectly through the new buying entity. In other words, a traditional rollover equity structure. What does this mean and why do you care? As is well documented on here and in the ETA space, for a liability and tax perspective, asset acquisitions are almost always preferred. But SOPs required a partial change of ownership to be structure as a stock sale. With these revisions, buyer can now form a new entity and roll seller's retained ownership into the new buyer entity and still consummate the transaction as an asset sale. Seller retains equity, but the target going forward is a new company, free from historical liabilities and with a setup in basis in the assets acquired. Obviously this is very fresh news, so we'll see how things start to get implemented and how quickly lenders move to adopt the new structures in their underwriting practices, but this is important news for business buyers wanting to explore keeping seller ownership and involvement post-closing!