Find great businesses and getting a great deal

Buying companies sounds great in theory.

And to some extent, it is…

You have capital → You buy a great product → Scale it using your knowledge

Then, either flip it or enjoy the cash flow forever.

But here’s the catch:

❌ Good products are HARD to find
❌ You’re in competition with 10s of buyers
❌ You lose a ton of money if the product goes south

The solution?

✅ Knowing what product to buy
✅ How to avoid competition and be the first person coming to their mind
✅ Structuring a deal so that you and the seller make more $$$

Here’s how you do that 👇

Knowing ‘your‘ products

If you follow me on Twitter, it feels like I do many things without real coherence.

But I have a clear thesis: I build/buy B2B products for creators which will help them earn more.

You should have a thesis too.

Every product is great (for someone at least).
But not every product is great for you.

So list out your minimum requirements and set them as basic filters:

> Tech stack
> B2B vs B2C
> Minimum MRR
> A lot more points…

This will eliminate 80-85% of companies from the get-go.

So much time and effort saved.

Strategic networking

If you are on social media — Be social.

Sounds basic, but almost no one does this.

Whenever I see a product and founder I’d like to potentially work with/buy a product from — I DM them.

Nothing serious. Just general chit chat. And that way I build a genuine relationship with most of them.

This does 2 things:

1/ I make new friends across the globe!
2/ If they ever want to sell, I’m the first person that comes to their mind

win-win.

Structuring the deal

I’ve saved the best for last.

Most people just pay a multiple of ARR and be done with it.

But they forget that structuring a deal is not a templatized process that only goes 1 way.

Here’s what I do:

I buy assets, not the company.

This is important, you don’t wanna go down the buying the company rabbit hole.

Then: I offer the seller ‘Income levels to be unlocked' at various product milestones.

Let’s take an example of a $5k MRR product:

Normal deal:

$200k — paid and over.

My deal:

$50k upfront for all the assets + $75k at $10k MRR + $100k at $25k MRR + $200k at $50k MRR.

This way:

1/ I get to buy the company for less money
2/ The seller earns way more than the traditional means
3/ I lose less money if the product doesn’t work

This is the exact deal structure I followed for typeframes.com (not the same numbers of course)

That’s it for today!

Find great products, build meaningful relationships, and do smart business!

If you have more ideas/advice for finding businesses and structuring deals, reply to this email 👇 I read every reply!

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