What’s Your Buy Box? We Have Deals In Need of Searchers

This Week in ETA:

Searchers: We are having some success finding deals ourselves (as Entrepreneurial Capital) and then bringing in a searcher who we would invest in the transaction alongside. If you’d like us to keep you in the loop on deals that might fit your buy box, just fill out this short survey.

As a preview, we’re currently working on two opportunities where we hope to bring in a searcher as owner-operator. One is a business generating $1.7M in SDE at a 1.0x multiple, but requires fluency in French. The other generates $950K in SDE at a 3.7x multiple and would be best suited for someone with personal experience in addiction recovery (either directly or through a close friend or family member). If either opportunity sounds like a fit and you’d like to learn more, feel free to mention that in the “anything else” question at the end of our survey. We hope to have more to share in the coming weeks.

Investors: Two sales concepts from the tech world translate surprisingly well to search and investing: towards vs. away language and above-the-line vs. below-the-line thinking.

For searchers, it’s natural to focus on the value you’ll add to a business—growth, systems, professionalism. But many sellers are more motivated by what they’re trying to avoid: the wrong operator taking over their legacy, a business mismanaged by someone who doesn’t care, or an uncertain retirement with no clear transition plan. Understanding those “away” motivations can be the difference between winning and losing a deal.

For investors, the lens shifts. Evaluating a search deal is inherently above-the-line thinking: risk, market share, durability. That means focusing diligence on what could go wrong—customer concentration, competitive dynamics, industry volatility—not just upside scenarios. The best outcomes come when searchers and investors align on avoiding the right risks, not just chasing the right returns.

Partner Perspective:

Caleb Basile, QoE Prep: How a Proof of Cash Helps You Buy the Right Business

When buyers look at a business, the question isn’t whether the financials look right. It’s whether the numbers are real. And the only way to know that is to "follow the money".

That’s what a proof of cash does. It ties reported revenue and expenses directly to bank activity, transaction by transaction, so you can see what’s supported by actual money and what isn’t.

A proof of cash can show you early on if a deal is simply not worth it.

Why proof of cash matters in diligence:

• It validates the topline. If revenue is real, it should show up in the bank. A proof of cash confirms that reported growth is backed by deposits, not journal entries.

• It brings up red flags early. Missing transactions, revenue booked before collection, or undisclosed liabilities almost always show up when you do the proof of cash.

• It increases buyer confidence. When the books tie to the bank, there is a lot more confidence in the P&L, fewer follow-ups, and smoother negotiations.

• It strengthens QoE work. While the Proof of cash isn’t a standalone exercise, its an important step that supports the Quality of Earnings

Why this matters for you:

Running a proof of cash early saves time and prevents surprises late in the process. It grounds conversations with sellers in objective data and, when combined with analyses like payroll and book-to-tax reconciliations, gives buyers the confidence to move forward knowing the numbers actually hold up.

Need help running a proof of cash or getting started with a QoE: I'm here to help.

Want to hear the financial questions other searchers like you are asking? Join my office hours. The next one is January 14 at 1 EST.

Plus:

• Our friends at Pioneer Capital Advisory are offering a cash flow model to help searchers structure sources and uses, evaluate debt service, and understand affordability before going under LOI. Check it out.

Question:

Hit reply and tell us (or better yet, fill out the form) - What does your buy box look like?