Acquiring Minds 7 Findings from the New Data on Self-Funded Searches
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Jul 15, 2022 Lisa Forrest, Co-director at Live Oak Bank, sheds light on a survey of 49 entrepreneurs who've navigated self-funded searches. She discusses their strategies for finding deals, highlighting substantial insights about deal closure durations and the significance of leveraging personal networks. Forrest reveals key success factors, including nurturing seller relationships and navigating valuation discussions. She also notes a shift towards larger acquisitions, emphasizing the growing role of institutional funding in transformation within this entrepreneurial space.
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Brokered Deals Dominate
- Nearly 70% of self-funded searchers in the survey found their deals through brokers.
- Despite the appeal of proprietary search, only about 10-12% found deals via proprietary means or professional networks.
Fair Valuations Are Common
- 98% of surveyed self-funded buyers felt their acquisition valuation was fair.
- SBA lending constraints likely help keep prices reasonable for self-funded searchers.
Many Find Deals Quickly
- 60% of self-funded searchers found and closed deals within one year.
- 30% surprisingly closed deals in less than six months, contradicting traditional two-year search fund timelines.