I have an awesome SMB target idea for a passionate NY’er who wants to stay in NYC — Local Law 11 facade remediation. Let me explain: The buildings of nyc are subject to something called Local Law 11, a rigorously enforced code that seeks to ensure building facade brick and cinder don’t crumble, crack fall, and kill pedestrians on the sidewalk below. Penalties are significant and no building mgmt or board of directors is wise to mess with this code. These jobs are everywhere. What I love about this idea: ✅ Regulatory framework drives steady recurring demand ✅ Aging buildings require (very) big and small jobs ✅prestigious buildings pay a premium for speed and quality ✅No disruption risk ✅Labor expertise and loyal crews create opportunity for great operator with great culture ❓Unsure how union labor influences economics. Definitely a key point. Drop me a line if you’d like to take the lead on a search like this. I’d love to help …. Btw these pics are of three buildings right here in my neighborhood working thru a LL11 job. – at Manhattan, NY

If you’re a business owner and you’re mulling an exit in the coming 1–2 years, the temptation is to start cutting corners to grow your EBITDA. Do NOT do this. Keep doing the “right thing” for your business. Let me explain: When you’re not actively planning for an exit, you have an undefined operating time horizon. Hopefully, you are thinking and acting long-term during this “build” phase: • investing over and over again in product quality and customer experience • hiring and compensating competitively • solving for a great employee experience Unfortunately, many otherwise sensible business owners mistakenly change course as the exit timeline comes into focus because they want to get maximum valuation. Here are some short-term choices we have seen: • The owner defers sensible investments in product quality or equipment needs • They experiment with unsustainable sales tactics to pull forward demand • They tinker with inventory levels or stretch A/P inappropriately When (not if!) these tactics are discovered during 90–120 days of buyer due diligence, trust issues begin to risk your entire deal. An extra 5-15% in enterprise value isn’t worth the risk. Professional buyers are already on their toes during this period. Now you’ve spooked them and they’re thinking “what else am I missing?” It’s tempting to stop playing the infinite game to juice EBITDA going into the sale of your business. Don’t do it unless you’re ready to pick up the pieces when the buyers run for the hills.

Winning LOI #17. This was a DTC branded home decor manufacturer. Was surprised to see 30%+ margins. - 3.93M of TTM revenue; ~1.53M TTM of EBITDA - Purchase multiple was 5.88x EBITDA - 6.75M of cash, 2.25M seller note - Winning buyer had a CEO lined up and attached the resume to the LOI as an exhibit add'l LOI and deal data below 👇

Product development question for the private equity / corp dev buyside: Some sell-side banks / brokers like to "vet" you before sending you the CIM. For those that do, would you prefer that they "vet" you before or after you've signed the deal's NDA?

I did a Q&A with two fascinating @AxialCo and members, @SievaKozinsky and @XavierHelgesen. They run Enduring Ventures, a permanent capital holding company. Sieva and Xavier are proven tech founder / operators now doing M&A in the world of SMB. It's worth a listen....

warning: shameless company plug 👇 SMB deal sourcing has gone digital but stays high touch and human with Axial👍. Axial Concord is today. Private 1:1 meetings via Axial zoom rooms. Free as part of Axial membership. Invites for rd 2 are here: bit.ly/3s7o0ms

Great to have @BrettHickeySMC on the Axial show. I don’t think we mentioned ebitda once ! 👏🏻👏🏻

am really pumped about this. The small business economy is rebuilding and transacting. Creating this badge @AxialCo's small way of increasing visibility on what it takes to overcome covid-19 as a small business entrepreneur in the USA. linkedin.com/posts/plehrman_…