buybiz

Mistakes I’ve made buying my first biz:

- not having an earn out where seller is on the hook for a year (min 6mo I’d say)
- margin too low to effectively hire
- underestimating working capital needs (very diff from software)
- weak diligence in their gtm channels

(…prob more gotchas that I fell for)

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Building something new. 🟪 Host: /venturecapital /adventures /theitinerant

Part of it! needed to find time to down on main biz now 😅

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Coming from software, embarrassingly never paid attn to WC or a cash flow statement till I bought this biz

Then I was like o shit

Can DM more or send excel, but tldr; 
- can be profitable but die from neg WC
- pushing back net+X payable can squeeze sig margin from biz
- good LOC terms is critical bc eats into margin

Can you say more about the working capital issues?

Would love tangible examples if you can share