.png)
In our continued quest of radical transparency, follow along as we are openly sharing information to build trust and keep all stakeholders updated through a monthly newsletter. Thanks for joining us on this journey!
TLDR
Shoutouts from the local ETA community
Finding great opportunities even in a slower deal market
Fixing the mistakes and maturing in our search
Deep Dive: Proprietary Deal-Flow
Final Thoughts from Josh: Lessons Learned and a Strong Finish to 2024
Shoutouts
The ETA Meetup community has been an invaluable resource for advice, mentorship, and meaningful deal team connections. If you are in the acquisition space I cannot recommend enough how helpful the content and connections from this community will be.
The dozens of local community banks and lenders who have shared their time and expertise over hundreds of phone calls, emails, and coffee chats. Chris Weir of Independent Financial is a prime example of a lending partner who goes the extra mile to answer questions or make connections for the ETA community.
Nick Patrick is a local success story who has been more than willing to share his successes and failures with business ownership, and helped us build our proprietary search strategy as we enter the final quarter of 2024.
Wins & Losses
Win: Two Offers Submitted! → While these offers weren’t ultimately accepted, we are proud to have submitted offers that showed the value of the business and had a very strong case to get across the finish line with little re-negotiation on deal terms.
Win: Smoothing the Transition → Transition to splitting time with consulting work has smoothed out, and intern help has proved to be critically important as we move to Q4 goals.
Win: Arriving to Quick "No's" → Process improvements let us quickly move to “No” decisions on difficult and bad deals.
Loss: Early Transition Hurdles → A good deal slipped through our pipeline, leading to a rushed and hasty LOI submission. We’ve adjusted our process moving forward to make sure this is only a painful learning experience once.
Loss: Missing Weekly KPIs → The on-market deal flow has slowly picked up, but the Brandt Point team had a couple of weeks that missed our KPI goals. However, we drew attention to the slacking performance and out-performed our KPI goals the following week and closed the quarter very nicely.
Activity by the Numbers: September
335 = Newsletter subscribers
41.5% = Last month's newsletter open rate
42 = Deal-specific outreach to CO business brokers
20 = Deals evaluated
11 = Meetings with sellers/owners
2 = LOIs submitted
Subject Deep Dive:
Proprietary Deal Flow
We are excited to kick off the proprietary side of our deal sourcing this quarter. We have discussed this in detail with our advisors. In the past, we have dipped our toes into sourcing deals that are not on the market, but this quarter, we are excited to officially launch the effort.
Why Proprietary Deal-Flow Matters
The benefits of launching our proprietary strategy are that we can see increased deal flow, we get early access to opportunities, and we are proactive in a thematic approach to applying our competitive advantage to the deal. While we have talked about proprietary deal flow sourcing in the past, one of the levers that pushed us over the edge was the lack of high-quality deals in our pipeline after Labor Day. We expected an influx of deals after Labor Day but have not seen that uptick happen. By finding off-market opportunities, we can prioritize more than just price and offer tailored solutions that can produce more value.
Our Vision of Proprietary Deal Flow
One of the exciting elements of this strategy is that it aligns with our core values and enables us to curate tailored solutions to transitioning legacy businesses into their next phase of ownership. Additionally, one thing that we continue to chase is our unique value proposition in the market. Finally, we are bringing a comprehensive tech stack to this effort. Sourcing off-market deals can be enduring, and our goal is to utilize technology to enhance our endurance efforts.
Conclusion
During the past nine months of our efforts, we have heard much debate about proprietary versus on-market deal sourcing. We are investing in this effort because we want to continue to cast a wide net and increase our probability of success.
Final Thoughts
Josh here - As we wrap up Q3, I'm amazed by how much we've learned about the SMB acquisition process and market. These first nine months have been a whirlwind of growth—our understanding of the ETA space has deepened tremendously and we've built a strong foundation in deal flow, analysis, and team collaboration. We’ve made great strides by refining our processes and expanding our team with the help of some stellar interns. Their contributions are already evident in the increased volume and quality of opportunities coming through our pipeline.
Looking ahead, I’m excited about the final quarter of 2024. We've set ambitious goals, and the experience gained in the first half of the year gives us the confidence to pursue our goal of getting a deal under LOI by year-end. The challenge now is to shift from simply keeping our pipeline full to focusing on evaluating deals with more precision and depth. This period of transition is key, but we’re prepared to keep moving forward. Q4 is going to be about adjusting our deal flow strategy, fine-tuning our diligence, growing our relationships, and ultimately closing the right opportunity. Here's to finishing the year strong!
Your support fuels our journey forward, and we are immensely grateful.