@MarioNawfal@WarMonitor3 Where is the $12T number coming from? Doesn’t seem right unless Russia grants unlimited access to its oil and energy fields. May be negotiating tactic - Russia annexes Ukrainian territory and US gets economic deals.
@benkellyone Stop spreading bullshit - how many deals did you close using 100% seller note.. probably 0. I would bet that if there are statistics out there for LMM/SMB deals, probably 0.001% of people can close deals solely through a seller note.
@TimurNegru Is there bureaucratic and regulatory hurdles when buying a house in Italy? Always felt that bureaucracy/regulation + language barrier might be barriers for US buyers.
@Sam_Rosati True.. we had a deal fall through after 3 months of DD and we didn’t keep our pipeline going. Keeping the pipeline strong is important. Albeit, even with a full pipeline, you will be forced to stall certain promising deals to avoid conducting multiple formal DDs.
This is I. Kentucky. I hit Trump’s name 10 times & it wouldn’t work. I then began recording & you can see what happened…. Switched it to Harris.
This is absolutely priceless. And probably the most frightening clip you'll ever watch on the people in charge of the US economy.
Jared Bernstein is literally the Chair of the Council of Economic Advisers, the main agency advising Biden on economic policy
Before getting into the search fund world, I had never heard of the term "Step-Up", but now I love it as a quick way to estimate returns on search fund deals.
Forget the excel models. Here's a quick approach to evaluate deal economics as an investor and a searcher 👇
Working Capital is either Adjustable or Non-adjustable
I just made up these two terms, so we’ll see if it sticks
Adjustable WC: A residential HVAC owner has historically allowed his customers to pay him within 30 days of finishing a job. A new owner could to change this billing policy, requiring 50% down on a job at signing and 50% on the day of completion. The result of this change for a $5M revenue company could be hundreds of thousands of dollars of cash in your bank account sooner and hugely increases your cash flow conversion cycle. What could you do with $300K extra of cash at a $5M revenue company? Probably a lot!
Non-adjustable WC: Your company gets paid by the government and their set terms are 90 days from when services are delivered. This would be a permanent, unchangeable part of the business model assuming. You cannot change the government terms so you should not expect any change or opportunity to do so in the future. This company inherently needs more working capital, and is typically reflected in a company valuation relative to a company that has a faster paying company (all else equal).
Understand the difference?
It’s important as a buyer to identify each sub component of working capital and see if it’s something inherent in the business model (Non-adjustable WC) or something flexible based on an operational decision (adjustable WC).
Is AR high because of a personal preference or decision made by the owner? Or is AR high because the top customer could pay faster, but has historically paid in 45 days? Or is AR high because you’re contractually obligated to collecting payment in 90 days?
@Sam_Rosati 1. How do you narrow down your industry - what metrics should be considered (i.e. margins, fragmentation, barriers to entry..)
2. How do you build up industry specific knowledge using online research?