In today’s email:

• The Top 5 Regrets of Failed Searchers

• What’s Up Next

👇🏻Watch: I joined Will Smith on Acquiring Minds to discuss my business failure experience and the top risks for first-time buyers.

⚠The Top 5 Regrets of Failed Searchers

Why Did These Businesses Fail?

As you might imagine, the number one question I get is:

“Why did these businesses fail?”

We all know that business failure post-acquisition is possible. But few of us have taken the time to really internalize what that means.

Part of the reason is the SBA 7(a) default rates — which typically sit in the single digits — and we take comfort in the odds. Part of it is that entrepreneurs tend to default to optimism. We assume things will work out for us.

But once that illusion of invincibility is shattered, we’re confronted with a harsh truth: failure can — and often does — happen. And none of us are immune.

So now the question becomes:

As many of you know, I’m writing Buyer Beware to explore this exact topic — telling the stories of acquisition entrepreneurs who bought a business… and then watched it fail.

So far, I’ve interviewed over 30 buyers who fit that profile. And I’m beginning to see patterns emerge — especially around their biggest regrets.

Here are the top two.

1. Trust the Seller — Or Walk Away

Seller risk is your biggest risk.

The seller will always have an information advantage. It’s their business, after all.

That’s why you must spend time understanding the seller as much as the business. Are they kind? Do they act with integrity? What do their customers, vendors, employees, and neighbors say about them?

Small businesses are a direct reflection of their owners.

How the seller runs their life is how they’ve run the business.

This is where your emotional intelligence as a buyer comes in. Due diligence isn’t just about the numbers — it’s about character. Talk to everyone. Look for inconsistencies. Listen to your gut.

Because here’s the truth: if a seller decides to torpedo your deal — either before or after close — there’s very little you can do to stop them.

Yes, you can sue them for fraud or breach of contract. But lawsuits are expensive, slow, and rarely end how you expect. (Just ask Justin Willess.)

Meanwhile, you’re left cleaning up the mess.

If you walk away from a deal and feel sad, you’ll get over it.

If you close on a deal and realize too late that you were lied to, you may never recover.

Regret #1: Do not do a deal with a seller you don’t trust.

2. Leverage Will Kill You

We’ve all seen the headlines:

And it’s true — the SBA 7(a) program is one-of-a-kind. There’s no other system in the world where a regular person, with decent credit and a modest down payment, can borrow up to $5M to buy a business.

That’s incredible. And it’s part of what makes the ETA space so exciting.

But just because you can borrow 90%… doesn’t mean you should.

In fact, most of the failed buyers I’ve spoken to say over-leverage was the biggest mistake they made.

A highly leveraged deal — especially your first — puts a massive debt load on the business from Day 1. Every dollar of cash flow goes straight to the bank. That leaves you with very little room to maneuver when (not if) things get tough.

For context: even private equity firms, with teams of professionals and operating playbooks, tend to cap leverage around 40–60%. And we — first-time buyers — are taking on 90%?

Take a breath. Slow down.

When you’re just starting out, your goal isn’t to be Warren Buffett.

Your goal is not to fail.

You have a lot to learn. And learning takes time — and margin.

That’s why I recommend a healthier capital stack for your first deal:

• 55–65% bank debt

• 15–25% seller note

• 10–20% equity injection

Yes, this means raising more money. Yes, equity is more expensive than debt.

But ask yourself: Would you rather own 65% of a thriving business… or 100% of a bankrupt one?

To be continued…

📣 What’s Up Next

I’ve got a couple things coming up that I’d like you to be aware of:

Weekly Live streams will be held Thursdays from 4-5pm EST. I’ll be live on LinkedIn and YouTube to answer your questions and there’s no need to register.

The Start Searching Challenge last week was a huge success! So much so, that I’ve decided to do it again from April 14th - 18th.

👉🏻 Here’s the link to register: https://www.startsearchingchallenge.com/challenge

Welcome!

Whether you’re just starting your search or already deep in the trenches, I’m glad you’re here. This newsletter is built for you—and I’m excited to grow it with your input.

If you’re active on social, I’d love to connect there too. I regularly share thoughts, frameworks, and risk-focused lessons from my own search journey.

🔗 Follow along here:

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Thanks again for being part of Still Searching. Let’s build something great together.

-Jed