The Ultimate Story of ETA Grit

This Week in ETA:

• Searchers: ETA is the ultimate test of grit and resilience. Just ask Justin Willess - he and his wife purchased a construction subcontracting business three years ago and faced a nightmare scenario that bankrupted their acquisition and cost them their retirement savings. Justin has graciously shared his lessons learned with us, and I consider them a must-read. See also the Acquiring Minds episode. Following this years-long legal and personal challenge, Justin is seeking an Offer in Compromise (OIC) with Live Oak Bank, the lender for his deal, so he can close this painful chapter and earnestly pursue his next acquisition. He has my support in doing so - I love backing those who have gone through the fire and are still moving forward.

• Investors: Post-close cash shortfalls are a leading cause of early deal failure; many self-funded searchers underestimate the 90-day working capital demands after closing. As investors, we strongly encourage searchers to raise more equity (15-20% rather than the typical 10%) to help de-risk the deal. It costs the searcher some upside if everything goes perfectly (rare) and provides crucial breathing room if there are early struggles (common). 

Plus:

• We are partnering with Deal Prospectors to give searchers who subscribe to this newsletter access to off-market deals, most of which will fit our ideal investment criteria. We’d love to hear from you about your specific buy box so the deals we share are relevant.

Question:

Have you had experiences with lenders or investors in the ETA community that have been really positive or really negative? We’d love to learn from your experience - reply and let us know.