We Talked To 413 Searchers - Here's How To Stand Out To Investors

This Week in ETA:

Searchers: In 2025, we spoke with 413 searchers. About 15% stood head and shoulders above the rest. The difference wasn’t pedigree or polish—it was strategy and mindset. The strongest searchers had a clear thesis for what they wanted to buy - and why. They brought real operating experience and demonstrated leadership, which showed us they’re clear that this job is about running and leading a team. They were easy to interact with, humble, and genuinely curious. We care about this so much, because coachable people ask better questions and learn faster once they’re in the owner’s seat. They also showed grit. Self-funded search is a war of attrition, and the best candidates had reviewed countless deals, submitted LOIs, and sharpened their approach with each pass. Many had prior entrepreneurial experience, big or small. And yes—something basic but telling: they showed up on time to the calls they scheduled with us.

Investors: Banks making SBA loans need information on 100% of your beneficial owners if you are investing through an entity. If this is a long list, we’ve found the best way to provide it is by giving the bank a spreadsheet with everything they will need to enter into the SBA’s ETRAN system. This saves both you and the bank time and effort, and prevents this part of the process from delaying the deal.

Partner Perspective:

This week, I’m excited to introduce NewCo Risk, our trusted partner for insurance and risk advisory tailored to investors, operators, and acquisition entrepreneurs. Led by co-founders Andy Harbut and Josh Richman — who together bring nearly 40 years of combined experience in insurance, risk management, and transactional advisory — NewCo turns what many see as a commodity into a strategic advantage for SMB owners and deal teams alike.

NewCo Risk joins your deal team with a bespoke approach to insurance diligence and risk consulting, helping you navigate pre-acquisition issues, optimize insurance and employee benefits, and position businesses for a smooth exit-ready posture. Their deep industry knowledge, practical guidance, and commitment to clarity give you confidence in risk decisions that can materially impact EBITDA and post-close success.

If you’re evaluating risk exposure and structuring transactional insurance, and want a partner who understands the nuances of M&A engagements, NewCo Risk is a resource we’re happy to recommend.

Andy Harbut, NewCo Risk: Why Insurance Is a Deal Issue, Not a Post-Close Afterthought

Many buyers, if they even think about insurance, assume it can be addressed a week before close, when the lender asks for insurance documentation. That assumption can cause real problems at the closing table and, worse still, result in overpaying for the business.

Insurance underwriting is based on a numerous, specific data points that describe a businesses’ risk profile. Those data points are often presented to insurers by an insurance agent whose interest is in securing the lowest priced coverage for his client (and thereby, assuring his own financial security).  If one of those data points changes or has been misrepresented to an insurer in the first place, the cost and availability of insurance can change, radically.  Think of it this way: the insurance rate is like an EBITDA multiple.  2x isn’t necessarily cheap if the business is failing or has little growth prospects. The only way to really know if the valuation is reasonable is to undertake financial and strategic diligence.  Similarly, the only way to really understand the insurance expense is to undertake insurance diligence, and it’s a mistake to think that the pre-close expense will hold, post-close.

Think of the transaction as Schrodinger’s cat. Once the box is open, the cat is no longer in the same position it was when the box was closed.  Similarly, as soon the insurers learn of the transaction (which invariably occurs because lenders need to be endorsed onto policies, ownership / Holdco structures change), the target company’s insurance will be re-underwritten.

Through the diligence process, we may find the target is paying below-market rates that are difficult, or impossible, to replicate post-close. An incumbent insurer might walk away despite years of profitability because the class is no longer favored.  Or, the pre-close insurance costs were predicated on dated information that no longer reflects the business’ true risk profile, and, as is particularly common in the SMB space, the insurance company simply hadn’t asked for updated information in years.

That’s why insurance should be treated as a bona fide diligence workstream, not admin work. It’s imperative that the diligence practitioner understands the business, not just the insurance policies, to identify these types of landmines early on.

Uncovering the landmines (a) allows for negotiation with the seller, when appropriate and necessary, (b) ensures a smooth closing, and (c) helps formulate the post-close operational plan.  Particularly if the business is blue collar or has any materials assets, the buyer should have an operational risk control plan before taking possession of the keys.

If you’re under LOI and want insurance treated like the deal issue it is, please reach out to Josh and myself at NewCo Risk early and turn insurance diligence into a strategic advantage.

Plus:

• Are you effectively using LinkedIn to help you find off-market leads? Check out this article from Deal Prospectors on how to assemble a 400-owner list in 20 minutes.

• Looking to acquire an accounting firm? Our QoE partner Caleb Basile, CPA outlines what you should be looking at beyond customers and revenue.

• If you’re just starting your search and plan to leverage an SBA loan to acquire your business, check out this guide on what you should have prepared before applying for your loan.

Question:

Hit reply and tell us - Anything not on our list for what makes a credible searcher that you’re finding is resonating with sellers?

P.S. - Share Your Buy Box:

If you’re a searcher, let us know your buy box! We see a lot of proprietary deals and love to bring right-fit searchers in on them.