Buying your first business is exciting. Buying six more before you’ve figured out how to run the first one is where things get interesting.
Dev Shah discovered acquisitions through Acquire.com and quickly went from being fascinated by the idea of buying businesses to actually building a portfolio of them. His first deal was Sourcely AI, a student research tool he bought for just $4,000 while it was making around $500 a month.
A year and a half later, he had grown it to more than $5,000 in monthly recurring revenue and sold it for a low six-figure exit.
But along the way, Dev acquired six other micro-businesses, all for less than $10,000 each, using the cash flow from his original acquisition. And that’s where he learned one of the biggest lessons of his acquisition journey: just because you can buy another business doesn’t mean you should.
He couldn’t integrate them as effectively as he expected. Some were sold. Some were shut down. Others continued running.
Today, Dev has taken those lessons into a much bigger world of acquisitions. He runs a buy-side advisory firm helping search funds, startups, and other buyers source deals, conduct due diligence, negotiate, and get acquisitions across the finish line.
And he’s seen plenty go wrong.
Sellers who disappear after an LOI. Businesses with information that turns out to be fake. Owners claiming revenue that can’t actually be verified. Deals that look attractive until you start pulling apart the numbers.
In this episode, Jaryd sits down with Dev to unpack what buying seven businesses taught him about moving too fast, how to build a buy box around your own skills and competitive advantages, and why serious buyers need to spend time in the market before they ever make an offer.
Dev also breaks down his approach to due diligence, why you should treat those 30 days as if you’re already taking over the business, how to avoid becoming emotionally attached to a deal, and why your relationship with the seller can be just as important as the numbers on the spreadsheet.
From $4,000 micro-acquisitions to sourcing deals for buyers with millions of dollars behind them, Dev has seen both sides of the acquisition process.
If you’re thinking about buying an online business, especially for $100K or less, this conversation is full of lessons that could save you from making the same mistakes.
🎧 Hit play to hear what Dev would do differently if he could go back to his first acquisition.
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Episode Highlights
05:04 – The $4K Sourcely AI Acquisition: How Dev Turned $500 MRR Into $5K+ MRR and Sold It for a Low Six-Figure Exit
06:24 – He Bought 6 More Businesses Under $10K Each: Why Acquiring Too Fast Became His Biggest Lesson
10:21 – Online vs. Offline Acquisitions: Why Stripe Makes Due Diligence Easier and How “Unofficial Revenue” Can Destroy a Deal
15:07 – The Deals He Walked Away From: Fake Information, Ghosting Sellers, and Red Flags That Changed Everything
18:16 – Why Dev Still Believes SaaS Is the Best Business Model, Even After AI Sent Smaller SaaS Multiples Nosediving
27:04 – The 200 Seller Calls Before His First Acquisition: Why Your Buy Box Should Start With Your Own Skills, Network, and Interests
31:44 – The 30-Day Due Diligence Test: Why You Should Approach Every Deal Like You’re Taking Over the Business Tomorrow
Key Takeaways
➥ $4K can be enough to start. Dev turned his first $4,000 acquisition into a low six-figure exit in about 18 months.
➥ Six acquisitions in 18 months taught him to slow down. Buying businesses faster than he could integrate them created unnecessary complexity.
➥ 200 seller conversations built his acquisition edge. Dev spoke with roughly 200 sellers before closing his first deal.
➥ Your buy box should go beyond price and MRR. Skills, interests, networks, and competitive advantages should shape what you buy.
➥ 30 days of diligence can expose a bad deal. Dev recommends starting from a blank slate and examining every number, customer, and red flag.
➥ 50–70% upfront cash changes the risk. Dev typically structures deals so the seller retains meaningful financial incentive after closing.
➥ The seller can be valuable long after the deal closes. A strong relationship can make the first 90 days of ownership much easier.

Dev Shah is a micro private equity investor and founder of Pocket Fund, a holding company built without outside capital. He started in 2023 by acquiring Sourcely.ai for $4,000, growing it into a business valued at $150,000 before exiting at a 37.5x return. Since then he’s built a portfolio of SaaS, newsletter, and app acquisitions, and now helps search funds and private equity firms source and close deals in the $250K to $2M range.
Connect with Dev Shah
Transcription:
I'm Jaryd Krause, host of the Buying Online Business Podcast. And today I'm speaking with Deb Saar. He is a micro private equity investor and founder of Pocket Fund, which is a holding company built without side capital.
And he started this in 2023 by acquiring Sourcle AI for $4,000, growing it into a business valued at over $150K before exiting it at a 37.5x return. Since then, he's built a portfolio of SaaS and newsletter, and an app.
Acquisitions, and now he helps search funds and private equity firms source and close deals in the 250 to 250K to $2 million range. And in this pod, we talk about his journey, how he got started, why he got started buying an online business, a SaaS business from MicroAcquire.
And we talk about some of his other acquisitions he did in that first year and how he just drank from the firehose and learned so much about acquisitions to how he started helping others, you know, buy businesses as well. And he also gives his advice on what you should do if you're looking at buying your first business and how to search for it.
And then what you should be thinking about and really honing in on during due diligence as well. Now there's so much value in this podcast episode. We talk about acquisitions, but it's not the only value piece that you can get. We have my buying online businesses due diligence framework.
It takes the guesswork out of buying businesses that saved people millions of dollars, and made people millions of dollars, and it's free. You can get it at the link in the description below. Now let's dive into the pod.
Dev, welcome to the Absolutely. Congrats on what you've achieved so far. I'm ready to unpack your journey so far. When did you what what got you into acquiring versus starting?
What's up, man? Thanks for having me.
Man, that's a great question. So I I when I initially came across acquisitions, I would say that was first when I came across acquire.com on Twitter. And it just blew my mind, you know, that there are businesses for sale all the way from a couple thousand dollars all the way up to a couple million dollars.
And yeah, just looking at listings on Acquire, it was kind of like love at first sight, you know? Acquiring a business isn't that popular in India. So it was just I was just mind-blown that I've always been really into business. So I was really surprised that I never thought of that- just the concept of being able to acquire a business before I came across it on Acquire.
Yeah.
Were you looking to, like, maybe acquire something, or had you started a business before?
Yeah, of course. So I can give you a little bit of background, right? So I started my first business straight out of high school at eighteen, right? It was kind of in the middle of the peak COVID lockdown, so everybody was at home. It was basically a college consulting business helping high school students in India apply to colleges abroad, right?
Everything was going great. I always knew that I wanted to do my own thing, run my own business, and I kind of had what I wanted, right? I had my own business; I had revenue. But there was a lot about the business where it was basically like a glorified agency, right?
And I had a l a very difficult time working with Indian parents, you know, for their child's education. There was a lot of pressure and, you know, a lot of back and forth that I didn't quite enjoy.
So after two years, I kind of shut down that business, and I had some cash, right? Which I was like, okay, how do I invest this? I felt crypto was a little bit risky. The stock market wasn't quite, you know, going to grow my wealth the way I would want it to. So I was looking at how I could invest this money, right?
What should I do with it? And that's when I came across buying a business, right? And it just made so much sense to me because I think what I really learned from my first business was that I knew I wanted to do something where I wouldn't come into the same problems, right? Of me not enjoying the business that I had built. Even though that was all I ever really wanted in high school. You know? So then that led me to acquire, and yeah, I just got pretty obsessed there pretty quickly.
Yeah.
And so you bought your first business. What was your first business, and what did you buy?
So the first business I bought was called Sourcly AI. It was basically a student AI tool. I don't know if you've used Google Scholar, but it was like an AI-powered Google Scholar, right? So you can put in, like, your paper or your research, and it would give you, like, sources, right? To do research. And we bought it for $4,000. And at acquisition, it was making around $500 in MRR.
So it was charging five dollars a month, and it had gotten around a hundred paying customers.
Cool. And that's the one that you scaled to exit?
Yes, exactly. So that was that business. I ended up scaling it over ten X, right? So we grew it from ten thousand from five hundred dollars in MRR to over five thousand dollars in MRR, and we ended up exiting the business for low six figures. So from acquisition to exit was about a year and a half.
Cool. Congratulations. That's awesome. So you definitely made a significant amount of money from that investment. And then what did you do from then? Like, did you start acquiring more, or did you acquire some whilst you were in that year and a half of growing Sourcely AI?
Yes, exactly. So in that kind of year and a half, I think I went a little bit overboard. I ended up acquiring around six of these kinds of micro acquisitions, right? So each of them was made for less than $10,000. And I bought each business with the cash flows of the first purchase, right? So I haven't really put in any money since my initial $4,000 purchase.
And yeah, of those six businesses, I think that I bought too many businesses too quickly; I wasn't quite able to integrate them the way I thought I would be able to, you know, but yeah, unfortunately, because of the low purchase price, they were, you know, lower risk, right? And I was able to end up, you know, towards the end, so basically I, when I kind of ended, so I was in the US for college, right? And when I was coming towards the end of my college, that's when I decided to kind of, you know, wrap things up.
So I sold Saucelly; I sold another business as well. And we shut down two of the businesses. And the other two are kind of newsletters that were still running. So yeah. So in in so as I was coming towards the end of my college, I decided to kind of exit the businesses because I knew that I honestly, I felt like an exit would make a lot of sense, you know, because I knew that I wanted to do something beyond that.
So since then, I've known that I really enjoyed the world of acquisitions. So I've been really deeply embedded in this world. And initially, we started out helping kind of others make similar micro acquisitions, right? So kind of like digital acquisitions below a hundred thousand dollars.
But slowly I've built a small team of analysts, tech people, and we basically work as a buy-side advisory firm, right? So right now we're working with close to like half a dozen buy-side mandates, right? And that's everything from, like, search funds in the US or in Australia, VC-backed startups, conglomerates, just basically providing them with deal sourcing.
Yeah, cool. So people will come to you with some money, and they want to buy, like, is it a SaaS business? Are you particularly in the SaaS realm?
So that's kind of where I started, right? Where the so it's been about I exited Saucelly at the end of 2024, right? So it's been close to two years now since that exit. So we first started fully focused on online acquisitions, right? But since then we've now expanded to we we really tackle anything that our buyers require.
Right. So we do everything from, like, the deal sourcing to the due diligence to negotiation and kind of whatever they need to get the deal done. And we've done a variety of buy-side mandates. I think you'd actually be surprised. We've looked at law firms in the UK for a VC-backed legal tech startup.
We're currently looking at B2G businesses for a California-based search fund. We're looking at fire safety businesses for an Australia-based search fund and also the typical kind of SaaS businesses. So yeah, a lot of variety in the mandates that we look at right now.
Yeah, definitely a lot of variety. So you've gone quite broad. What have you learned from online acquisitions to offline acquisitions? And then what have you learned from offline acquisitions that you can bring into online acquisitions? Would you say?
Yeah, no, that that's that's a great question. So I think every kind of mandate has its own nuances, right? Particular to that industry, to that country, right? And yeah, like if we're looking at, for example, Australia, right, there are certain nuances in terms of, like, the language in the email.
Right. We also do a lot of cold calls, right? So we actually have to make sure, right, that there's somebody who has a certain type of accent, you know. We also send direct mail, right? So we've tried handwritten mail, like, you know, letters; we've tried printed-out letters, you know, kind of different variations.
I think the main thing that I've really learned very well from online acquisitions was kind of being able to reach out to different types of founder in different walks of life, you know, and getting their attention. So I think that was a skill that was very, very valuable and helpful with online acquisitions and then became even more valuable with offline acquisition because usually these owners are very difficult to reach, you know, and we have a lot of tech that we've built in-house for not just, like, cold emails but also reaching out to them on maybe Facebook or Instagram, right?
So we really try to go and, you know, there's probably like five to ten different touchpoints that you can use for every different type of person, you know, seller that you're trying to reach out to. So yeah, a lot of that was learned in our initial online days. And in terms of the offline versus online, I think that online acquisitions are so much easier, man. Like, you, you, like, everything that you need is on your laptop, right?
Yeah. Exactly. You can just request it all, right? Like, hey, like, where's this? Can you just, you know, export this, send it to me? Like Stripe, like everybody knows Stripe, right? It's so trusted, right? You can trust whatever's on it, whatever's data's on it. And you don't need to, like, kind of verify that, you know. Whereas with offline businesses, it has been quite a nightmare.
We've had business owners telling us, like, yeah, like sixty percent of my revenue is in unofficial revenue, you know? And I take bottom as well, and I want you to include that in my valuation. And it's like, how does that make any sense? You know, first of all, how am I even supposed to verify that? And secondly, like, there's no way that that can be like counted towards your valuation.
You know, so we've had a lot of these types of instances. So I think just like, we've realized, like, okay, like you have to get the tax returns, right? The founders' or the sellers' income tax returns, right? You have to find kind of third-party sources, right? Auditors from that country, right, who understand.
So yeah, I think just, you know, being able to, like, go through various due diligence, data rooms with online acquisitions then kind of led into knowing what needed to be there, right? For the offline acquisitions. But yeah, they're kind of their own beast.
Yeah, online is significantly easier, and a lot of people listen, or everybody listening is looking to buy an online business, and I think maybe don't have the perspective of the challenge of valuing an offline business, say a brick-and-mortar business or an HVAC business, electrical business, or, you know, a company like that.
Some people- do list some of my clients do start by trying to buy a physical business and then move towards online businesses because of the location independence as well. And the ease as well. But the level of competitors acquiring online businesses, I would say, is probably more than the level of people acquiring physical businesses. So you do have, you know, the catch twenty two and the pros and cons of each.
I wanted to ask you what are some of the things that, or like if you've got any stories, what are some of the things that have made you walk away from a deal when you've been very close? Like, say you've gone and you put a letter of intent on a business and/or an expression of interest, and then you've started due diligence. What are some of the things that made you walk away and not proceed?
Definitely. I mean I've I've walked away from a lot more deals than I've closed. That's for sure. Right. Exactly. I feel like, you know you you miss all the shots you don't take, and you have to get your reps in, you know. So I think that's a very normal part of the process, you know. I think you have to be able to kind of not be emotionally attached to your deal, right?
Well, that's the same as every acquirer being too excited about it, so that if there are any kind of skeletons in the closet or red flags, then you can walk away, right? I think that I always try to structure my deals in such a way that I'm only giving, like, 50 to 70%, maybe like sometimes a little less than that, in cash up front. Right. So if the seller is expecting anything above that, right, I think that's usually a deal breaker for me.
So a lot of kind of like deal nuances like that. But I've had quite a few kind of horror stories, right? Where it's just a seller that I really trusted, right? That we've gone very far along with, maybe even invested in, like, a developer to do some technical due diligence, things like that. And then the seller has ghosted me or just, you know, it turns out like everything that they provided me was fake.
Yeah, I've also had sellers just be very difficult to work with. Like recently we were looking at, so I'm helping, like this couple of college students came to me and they were like, We want to buy a business; will you fund it for us?
Right. And so I gave them a budget of five to ten thousand dollars, and they're kind of conducting due diligence on different businesses, and we found a really interesting business that we were looking to go ahead with.
And this was literally last week. And then the guy was just like, I don't believe in LOIs. Like I I don't wanna give you any of my data. Like, you just agree on a deal, and you just send me like five thousand dollars, and then I'll give you access to all of my data. It was just like I can't understand this guy's just, like, you know, just ignorant a little bit or actually trying to scam us.
So yeah, there's not a lot of examples like that. Yeah, you're right, probably both.
I've definitely had we've gone to LOI with a client and started to go through the due diligence process, and then the seller just ghosted the broker and us as the buyer as well. And it's not super normal to get ghosted, especially if you've got a broker and you'd you've got a broker trying to sell the business for you. Yeah. But I guess when it comes to microacquires.
Everybody's sort of self-listing on there as well. Yeah. What's your preferred business to acquire? Is it a software, like a micro software business? And if you were to continue, like, building your own portfolio- maybe you already are, are you would you stay in that lane? And if so, why?
Yeah.
Honestly, that's something I do kind of ask myself ev every couple of months. I've so after I sold Sorcery, I always knew that I would get back into acquisitions. I knew I wanted to go larger, right? Rather than just, like I felt like four thousand dollars was very small to start with.
So, but you know, I unfortunately don't have a million dollars yet. So I decided to work for those that do have that kind of backing, right? And the experience so that I can learn from them while also, you know, providing a service, making, you know, building a business.
So I think that I've always known I wanted to go back into acquisitions, but I'm really learning; I'm still learning two years in, you know, of like basically full-time sourcing deals, like 30 deals a month, you know. I'm just still learning so much more about different types of businesses that are out there, business models that are out there, deal structures.
So I definitely think that there's, you know, I have a lot yet to learn, and I'm still very young. But no matter what I see, I still just there's just no business model that I've seen that can beat the SaaS business model.
Like it it really genuinely is just the best business model ever. According to me. So I definitely think that obviously, like other businesses, you know, you can sometimes get a lot of value, you know, like with the way HVAC businesses are right now, right? Like a couple of years ago, you could buy it for like five X, right?
And now it's like a minimum ten X, and with, you know, higher EBITDA if you go closer to like five, ten million plus an EBITDA, then you're looking at like fifteen X, twenty X even, you know. So there are businesses that have that kind of potential. I think SaaS businesses- the valuations have really dropped, you know, over the past two, like, basically since AI has come out, like SaaS multiples have nosedived, right?
Especially on a smaller level anyway, you know, like when you're under fifty K.
Exactly. Exactly. Because Exactly. If you're looking at, like, a publicly traded SaaS business with, like, hundreds of millions of dollars in revenue that's trading for like, less than like, three X, five X, you know, revenue, then you're definitely not gonna find a business making, you know, a hundred thousand dollars a year. Why would you pay more for that?
Right. So I think that the multiples have come down a lot, but that's a good thing and a bad thing, right? It makes it a lot more accessible to different buyers. And if I believe that, you know, if I were to buy a business tomorrow, right, or the next business that I buy, I wouldn't buy to sell, right? I would buy to hold forever.
And I think that's a much stronger business model or, you know, kind of acquisition thesis. And I think that works really well then for the lower SaaS multiples, right? 'Cause then you're looking to buy a business cheap, make the money back from that business itself, you know, and then continue to operate, churn, and burn, and you're not getting the real true compounding growth over, you know, five, ten, twenty years. Versus, like, if you're looking to build wealth over time with less stress, you can buy a SaaS business for, I don't know, 200k, 150K, 100K, whatever, 50k, and just keep it and just continually growing it.
Then you do have the level of, though, those smaller SaaS businesses; you do have the level of competitive risk and that SaaS business becoming a feature of a larger software business.
You'd need to find something that is very sticky and B2B. Because B2B is, I think, better than B2C SaaS because B2B is all organizations and businesses are buying that software as a tool, as a member, and they have a team using that.
Then you know they're locked in, and I was speaking to Stephen McDonald from OKR School. He bought I think he bought it for three thousand dollars, OKR's tool, and he got it to a point where it's making three thousand dollars a month now. And the people that sign up are teams; they're not individuals. So he counts S as how many teams he has getting into his business model. And it's a great business model.
You know, the retention is significantly high, and that's what he worked on in the first ten months. And yeah, it is an exciting space, software- and it's great that the prices have come down and the multiples have come down.
I'm sure it will fluctuate and go back up, but it's great for us out there looking to acquire these businesses to be able to buy them a little bit cheaper. But I think what most people don't understand, and you might be able to speak to this, Dev, is that when people buy a software business, they're more so worried about whether this software is going to be able to be recreated cheaply and easily by AI. But I think what a lot of people don't understand is that when you buy a software business that has real users, you're buying distribution, you're buying brand, you're buying a channel, you're buying an asset that has people already paying. It's not just the software, which is the main part of the value, I would say.
Yeah.
Yep. No, a hundred percent, man. I think, especially since AI has, you know, kind of democratized, let's say, like development, right? Software development. The moat in general with an online business, the moat and the barriers to entry are very low, right? Compared to an offline business, right? You don't need to be in that physical location. You don't need to, you know, invest in real estate.
So the barriers to entry are much lower, right? So you have to understand that there is going to be competition, right? But that is not a bad thing at all. Like we are in a capitalist economy and world, and competition is the lifeblood of capitalism. Like there's I think that there's there's nothing wrong with competition, and people should not be scared of it, right? In fact, you should be looking at, like, how can I do things better than them, right?
What is the main differentiator? Is it the, you know, the personal touch? Is it a certain niche within that industry? Right. Is it a certain niche problem to solve for that industry? Right. There are a lot of different ways in which you can kind of niche down. But yeah, I really think, like you rightly said, that the real value is in the users, right?
And not just in the users, but in those paying customers, right? The value is in that recurring revenue that you're paying a multiple for, right? That you're betting is gonna stay around for however much longer, right? So understanding the cohort data, right, of the business that you're going to acquire, like every SaaS business runs on Stripe pretty much, right?
So Stripe has really nice cohort data. So I really think understanding that, then speaking to the customers, that's the most valuable thing, you know? Yes. For being able to for retention.
Exactly.
Valuable. Yeah. And you've got, you know, you might value buying a software business with, say, 500 users, or a hundred, or even a hundred users, if it's doing well. People are staying, yeah, the retention's good. But say, for example, the previous owner wasn't really reaching out and getting feedback, customer feedback; there's so much value untapped in that business already by just going out and saying, Hey, what do you not like about the tool?
What do you like about the tool? And then you can go away and make it better and make retention even, like, significantly better. And then once you have that, you can bring more people in. Deb, I wanted to ask you for somebody, you know, you're in the you've been in the micro SaaS space for a while.
And it's not just SaaS; you've looked at other online business models as well. For somebody looking at buying something for a hundred K or under what of and they were gonna do it themselves, they weren't gonna employ you to f search for it.
And yeah, do the deed. What advice would you give to them if they said, I've got a hundred K, what do I do? I want to buy it for my business. What advice would you give?
So would you say specifically for the deal sourcing or like the due diligence?
I would just say for both. Yeah, I would say maybe one, like how would how how would you suggest they source the deal independently themselves, and then due diligence is another whole podcasting conversation, but we can move into as well.
No, definitely. It yeah. Each step of the journey really has a lot of nuances to it. So no, I think so. First of all, I always recommend like almost every client that we take on.
We don't take people on unless they have put in some work themselves, right? Because I feel like then you just have a very, like, outside kind of view, you know? And it's difficult to work with someone that doesn't have that experience of deal sourcing, of meeting with sellers, right? So I r highly recommend that everybody should be, you know, if you are interested in this, you should just simply be spending a lot of time on it, right?
Going and looking at the marketplaces and then having conversations.
Exactly. Exactly. Looking at marketplaces need to be like your morning newspaper. You know, like you spend twenty minutes, thirty minutes, an hour every day looking at listings, meeting with sellers. Before I made my first acquisition, which was Saucerly, I met with probably close to like two hundred sellers, maybe more than that, over the span of like three months.
So that was like a lot, you know. I was like meeting with fifty sellers a month. Like it was, at minimum, like, you know, like five, ten sellers a week. Right. So it definitely, like, you have to put the reps in, right? And you almost have to go into it, like there's gonna be so many nuances if you're looking at an e-commerce business, so like I mean, I've looked at like all different types of business models from across the world, right?
So e commerce business from Africa, like SaaS business in Australia, right? Each country has its own nuances. And I think that what a lot of buyers get wrong is that they start their search by going external, right? Like, what is the type of business that I wanna acquire, right?
Yeah.
Like what would be the best out there, right? What is the market saying? But I think that each person has their own unique kind of skill sets and strengths, right? And they should be starting kind of internally, right? So what I always recommend to my clients is that the first step and we go through, like, a pretty lengthy onboarding process, but the main goal of that is to really identify what your own skill sets are, right?
What are the competitive advantages, right? What are the kind of, just like, the nuances or the networks that you have access to and that are unique to you, right? And this also includes, like, your interests, right? And things that you are passionate about. You know, so you have to really identify these things and understand them.
Right. And then after you have that initial 'cause your buy box should not just be like, like below a hundred thousand dollars, above like a thousand dollars MRR. Like you need to go b deeper than that, you know? And of course you can still cast a wide net, but know that these are the kind of smaller things that you're looking for. So I think, like, really understanding yourself, your skill sets, and then searching accordingly, I think that makes a world of difference.
Totally agree. It's so wise. And it's not only just, like, I think people should, once they do start searching, have a business model, understand themselves, have a business model and price range, but then get into the market and start searching and realize that I should be open to the business model or I should be open to the price range that I'm going for. Yeah. Based on, like, say, if you're having five seller calls a week, you're gonna learn so much about all of these different types of businesses.
And some of them are gonna start to resonate with you more than what you may perceive was the actual business model that you wanted to go for, the price range that you wanted to go for. And you can start to build out acquisition criteria of, like, this is ex, this is ex, precisely what I wanna go for based on where the market is actually at and these businesses that are selling for that price range.
And then you can start to learn that market. When you learn that market, you are able to value those businesses so much better because you've learned, listened to, and spoken to so many business owners with that business model at that price range and understood where they're at. I would say, lastly, once they've seen something, what advice would you give them on due diligence if they were starting?
Yeah, no, I think due diligence is quite tricky, right? You definitely wanna take your time with it, right? You wanna be very clear to the seller that you need at least like a month, right? If not six weeks, you know, so that you can take your time with it and you don't wanna be rushed in any way, shape, or form by the seller, right?
I think that due diligence is I almost always tell my clients- like, you need to go into due diligence with a completely blank slate, right? Just imagine you've never seen this business before, right? And just approach it from a blank slate because very often, by the time you get to that LOI, right?
Only after the LOI do you get to due diligence, right? By the time you get to that LOI, you've already had like at least three to five calls with the seller, right? You've probably done a bunch of initial diligence yourself, spoken to people, gotten an initial understanding of the business, and more often than not, gotten a little bit excited about it. You know?
This vision of you owning the business already, and you can blind yourself to the data and how important it is. Like you feel like you've come so far that you're gonna have to buy it anyway because you've signed an LOI, but that's not like.
Exactly. Exactly. And you overlook small red flags, you know, that maybe you're like, okay, this is okay. You know, this one customer gave negative feedback, but maybe that's just that customer, you know, and there's like a small discrepancy in like the revenue, you know, but that's okay. It's just like it's just like a hundred dollars, two hundred dollars, you know.
But with a business making sound like, a thousand, two thousand dollars a month, like $200 is like 10%, you know, of the revenue. So you really need to be very strict with yourself and with the business. And just really look at, like, basically putting an X-ray on that business. Right. You want to get as my you know granular as you can, right? And really understand the business. And in a lot of ways, like, use those 30 days as, like, your kind of, like, you know.
Training for eventually taking over the business, right? So whether you actually take over the business or not, your diligence should be as if you're taking over the business in like thirty days. Right. So I think that really puts like a bit of like a clock on it, you know, and gives you more of like an urgency towards action, right?
'Cause you don't wanna just be like understanding the business; you wanna be able to, like, hit the ground running, you know? And I'd say probably the last thing is the relationship with the seller, right? I think this is something that a lot of buyers neglect, right? And I think they don't realize that the seller is going to be your best friend once you take over the business. Like, every problem that you deal with, they would have dealt with before.
You know, so you wanna make sure that you have a good rapport with the seller, right? You obviously wanna leave some incentive, right? Or so some money still on the table, right? So that they're still incentivized to help the business and to help you. But I think that relationship really can make or break, you know, your f your first ninety days running the business.
And yeah, it just it's just a much more pleasant process, you know, for everyone involved when there is a good kind of rapport and relationship. So I think investing a little bit of time into, you know, speaking to the seller on a more personal side of things, right? Understanding them, their values, right, where they come from, finding some kind of alignment there.
I think especially if you can find some alignment around values, right, and around where you see the business going. I think that leads to a just a stronger acquisition and an easier transition. And yeah, I think if the seller is invested in, you know, you continuing to grow the business, like that can only help you, you know. And yeah, I think sellers often do want to see, like, it's their baby, right? So they want to see it be successful. Yeah. So yeah, you wanna just have a good relationship with them, and yeah, it just makes everything easier.
You're you can tell that you've done and spoken to so many sellers and looked at so many deals and have been in this space, like just thrown yourself fully into this space. I've been doing this for over a decade now, and one of the things I talk about is becoming an attractive buyer, which is exactly what you're saying is like speak to the seller, build a relationship, build a rapport with the seller, connect with them outside of just the business and on value, and you can there's so much more opportunity in the deal later, after the ninety days.
You know, you can work together, you can grow together. Yeah. They might have an idea in a year's tr year's time where they're like, What have you thought about this? Or you come to them with a problem in six months, and they can quickly squash that problem and save you thousands of dollars and s hours and hours of stress and pulling your hair out. And it's so valuable.
Yeah, Deb, I just wanna say thank you so much for coming on and sharing your experience. And I can tell that you've just fully immersed yourself in this world of acquisitions, and you're doing really well. And I'm looking forward to seeing where you're at in a few years.
Thank you, man. Thank you for having me on the podcast. I've been watching it since I made some of my initial acquisitions, and yeah, no, I really appreciate you inviting me on. I appreciate the time, man.
Yeah, it's always good to have some, like, a lot of the time I'll invite somebody on the podcast and not even know that they had heard my podcast or listened to my podcast, and it made a little mark and helped them in a small way in acquiring their business.
And then hear guys as you share that like you've just dived in, you've, you've listened to resources and you've gone away and taken it and made it your own and done so well. So yeah, congrats. It's really cool. Where can we send people if they want to reach out to you?
Yeah, so they can check out my socials. It's Dave Likes Business with Z B I Z N E S S. That's pretty much on all platforms. And you can they can check out our buy-side advisory firm website. It's cortalia. I don't know if the links will be in the description, but they will be in the description. Yeah. I'll link to your LinkedIn, Dev likes business, and then we'll put your other link in there as well. But yeah, thanks for coming on again.
Awesome.
I appreciate the time, man. Thank you for having me.
Absolutely. Everybody listening, thank you for listening, and I'll see you on the next one.
Host:
Jaryd Krause is a serial entrepreneur who helps people buy online businesses so they can spend more time doing what they love with who they love. He’s helped people buy and scale sites all the way up to 8 figures – from eCommerce to content websites. He spends his time surfing and traveling, and his biggest goals are around making a real tangible impact on people’s lives.
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