Weekly Recurring Mtgs
If you have a deal under LOI, put a weekly recurring hour-long meeting with the seller in the calendar until
Diligence
35 posts
Buy vs. Own
There are many businesses that I’d like to own, but I’d never want to buy them.
Always disclose yellow flags ⚠️
When creating an investment memo, you might be tempted to think that not discussing risks (yellow flags) makes for a
🚩⚠️✅ 3 DD Categories
When evaluating a deal, I categorize my findings in 3: 🚩 Red flags: Deal killers. ⚠️ Yellow flags: Every deal has them,
Seasonality vs. Cyclicality
People conflate seasonality and cyclicality. They’re different and unrelated. Examples of seasonal businesses: Christmas trees, fireworks, ski slopes, air
Rule of 40
Rule of 40 = Healthy & Sustainable Business = Revenue Growth (%) + EBITDA margin (%) = 40% or more Applicable in SaaS
Document everything
If you’ve just acquired a business and things don't feel quite right, start a document where you
Diligence vs. Fundraising
There is an inevitable conflict of interest between (1) diligencing & negotiating a deal and (2) raising capital for it.
Google Doc for Q&A w/ Seller
When dealing with sellers, create a Google Doc with a Q&A (your questions & their answers). I use
Kids blow up deals
Kids can blow up deals. I’ve been at the altar before, only to experience that the kid won’t
Move on w/o DD
If a deal doesn’t feel right, more due diligence will typically not make it feel better. Move on.
