The reality:
Record searcher formation (94 new funds—highest ever)
Search funds = 13% of Axial closes (up from 6%)
53% of brokers report increased institutional buyer activity
Multiples: 4–7× EBITDA and rising
The problem: Individual buyers can't win on price alone.
The opportunity: They can win on everything else.
The thesis: The lowest-risk close wins.
What Sellers Actually Optimize For
Sellers don't maximize price. They optimize for a risk-adjusted outcome across four dimensions:
Factor | What it means |
|---|---|
Price | Headline number |
Certainty | Will this actually close? |
Stewardship | Employees, legacy, reputation |
Time | Delay kills deals |
Institutional buyers often win on price.
Individual buyers win by collapsing risk on the other three.
Strategy #1: Narrow Your Focus Until It Hurts
Claim: Generalists lose. Focus compounds.
Why it works:
Sellers trust insiders
Repetition collapses diligence + financing timelines
Local credibility signals permanence
What to do:
Pick 1 vertical where you can explain:
Unit economics
Labor dynamics
Seasonality
Common failure modes
Pick 1 geography where you have:
Known lenders
Known attorneys
Fast diligence vendors
Optimize for speed, not deal count
Strategy #2: Build Proprietary Deal Flow
Claim: The brokered market is a race to the bottom. Winners source upstream.
Why it works:
Off-market deals bypass competitive auctions
Most proprietary deals close on follow-up #4–8, not message #1
51% of private businesses are Boomer-owned—many aren't listed yet
What to do:
Build an owner list filtered for:
Tenure + size
Age / succession gaps
"Likely to sell" signals (declining web presence, no clear successor)
Run consistent weekly outreach—depth beats volume, but consistency beats sporadic effort
Make each touch specific enough to prove you did the research
Use the 7-touchpoint system over 2 weeks (calls, emails, voicemails)
Best windows: Tue–Thu, 8–9 AM / 12–1 PM / 4–5 PM
Most searchers quit after two attempts. The money is in the follow-up.
For a deeper breakdown on building repeatable outbound systems, see Deal Sourcing Tips for Searchers.
Strategy #3: Become the Buyer Brokers Call First
Claim: Brokers route deals to the easiest credible closer.
Why it works:
54% of successful self-funded searchers closed through intermediaries
Brokered deals have 20%+ higher close rates than proprietary
Brokers are overwhelmed—they triage aggressively
What to do:
Respond same-day. Always.
Ask clean questions (no 47-item diligence requests before IOI)
Give quick decisions: Yes / No / Need 2 items
Follow through on every commitment
Become known as the buyer who makes brokers look good
Strategy #4: Weaponize Financing Readiness
Claim: Financing kills more deals than price disagreements. Show up pre-wired.
Why it works:
Brokers rank financing friction as a top deal-killer
SBA 7(a) is leverage institutional buyers often can't use
Pre-vetted financing moves underwriting to approval in 3–4 weeks
Your Financing Readiness Packet (5-minute send):
Named SBA lender (industry-specific)
Target structure (SBA / conventional / seller note mix)
Equity injection range
Diligence timeline with dates
Deal team contacts (attorney, CPA, lender)
Financing readiness is a signaling device, not just logistics.
Strategy #5: Win the Sellers Institutions Can't Serve
Claim: Not every seller wants to cash out and immediately disappear.
The seller profiles institutions lose:
The legacy seller: Cares more about employees and reputation than last dollar. Won't sell to a platform that will "optimize headcount."
The slow-exit seller: Doesn't want to disappear overnight. Wants a 12–24 month glide path.
The believer: Thinks the business has real upside. Wants a second bite through rollover equity or earnouts.
The relationship seller: Wants to know who's buying. Won't hand keys to a faceless fund.
Institutional buyers can't serve these sellers. Their fund structure demands clean exits, fast integration, and predictable timelines.
Your edge: You can build bespoke deals they can't.
What to do:
Qualify for seller motivation early—ask what matters beyond price
Offer consulting agreements as a feature, not a concession (knowledge transfer + seller identity preserved)
Position seller notes as alignment: "You'll be invested in my success"
Offer equity rollover to believers: "You'll participate in the upside you built"
Customize timelines—some sellers want 30-day close, others want 18-month transition
The frame shift:
Institutions offer standardized liquidity.
You offer partnership.
That's not a weaker offer. It's a different offer—for a different seller.
Find them.
Strategy #6: Run Fast, Disciplined Diligence
Claim: Predictability beats speed. Remove uncertainty for everyone.
30–45 day diligence cadence:
Week 1: QoE-lite, customer call plan, lender package initiated
Weeks 2–3: Ops diligence, key employee conversations, underwriting
Weeks 4–6: Confirmatory diligence, close checklist, final negotiations
What to do:
Commission buy-side QoE early
Name your timeline in the LOI
Reduce re-trades by front-loading information requests
Keep momentum—delay creates doubt
For a full breakdown on when QoE makes sense and how to scope it, see Quality of Earnings Reports for Small Business Acquisitions.
Strategy #7: Package Your Buyer Story
Claim: If the seller can't explain you to their spouse, you lose.
Your one-pager must answer:
Why this business?
Why you? (operator fit, relevant experience)
Why is your financing real?
What happens to employees?
What does the seller's life look like post-close?
What to do:
Build a simple searcher website (background, family, vision)
Lead with listening on intro calls—most buyers talk too much
Make the seller feel understood before you pitch yourself
The Bottom Line
The math:
6 LOIs to close 1 deal (average)
8–10 months from search start to close (median)
At least 1 failed LOI in most successful searches
The winning formula:
Narrow focus
Proprietary flow
Broker trust
Financing certainty
Seller empathy
Price wins auctions.
Certainty wins handoffs.
Be the obvious choice.
Disclaimer: This guide is for educational purposes only and does not constitute legal, financial, tax, or investment advice. Business acquisitions involve significant risks, and outcomes can vary widely based on individual circumstances. Always consult with qualified professionals including attorneys, CPAs, and financial advisors before making acquisition decisions. The EBIT Community does not guarantee the accuracy of information provided or the success of any acquisition strategy. Past performance and examples do not guarantee future results.
