[csa]

> Who is the buyer?

Realistically, the best buyer would be someone who has deep connections in a market that the current owner hasn’t penetrated that could 5x the volume almost instantly.

They would hem and haw about whatever small multiple the seller is asking for, and then laugh all the way to the bank after close.

I’ve seen this happen many, many times.

> And then, enough cash that it's worthwhile to go through diligence and paper up a deal and take on the risk that there isn't skeletons in the closet

For a business of this relatively small size, an agency would likely be used, and they would do all of this scutwork, and their fee is paid by the seller. Which agency or agencies have you used (if any)?

[danielmarkbruce]

> Realistically, the best buyer would be someone who has deep connections in a market that the current owner hasn’t penetrated that could 5x the volume almost instantly.

This is a nice theory. And it could be true, and it does happen, but it's more than likely not.

You must be using better M&A brokerages/bankers than I ever have. None of them do actual diligence, they are selling the business...They are actively making the business look different to what it is. They certainly don't take on any risk (they are not a party to the agreement in any way) and they certainly don't obviate the need to use and pay a lawyer (and most small deals are each person pays their own costs).

With respect, are you actually buying businesses? Or just doing contracted technical DD? It feels like you are missing a good chunk of the picture here. The default take on the value of this business by a lot of folks buying businesses is going to be "close to zero". I mean, to be fair, I have not ever bought a hardware business so I'm a little out of my depth here... but.. not miles out.

[csa]

> This is a nice theory. It could be true, it's likely not.

I’ve done it / do it with taking products and services to certain East Asian markets. And sometimes scaled quickly at much more than 5x of the original revenue.

> You must be using better M&A brokerages/bankers than I ever have.

FEI is one such broker, and know people on both sides of transactions done through them that are happy. I haven’t used them personally, but that’s one example.

They definitely do due diligence.

> With respect, are you actually buying businesses? Or just doing contracted technical DD? It feels like you are missing a good chunk of the picture here.

Funny, I was about to ask/say the same thing.

Yes, I buy businesses. No, I don’t do technical DD contract or otherwise (frankly, I’m not tech savvy enough to do that on my own — I can sniff out some bad code, but I let the pros do what they do).

I/we are on HN reply delay to prevent “flame wars”, even though I don’t think we are flaming. As such, I will stop here.

If you are what you actually say you are, I wish you luck and all the success in the world. That said, I stand by everything I have said above.

[danielmarkbruce]

I did almost say ~ "it's possible we just see very different deals and it colors the perspective".

I never deal with asia. Maybe everything I'm saying is off base given it's hardware and asia is a thing in that realm.

[wilkystyle]

I'd just like to say that I very much appreciated reading both of your responses, and commend you both for firmly but politely and reasonably disagreeing.

[alonsonic]

Second that. Good to see a polite but firm discussion in the comments. Also very interesting topic, would love to be a fly-in-the-wall in a meeting between these two.