In this episode of the M&A Launchpad Podcast, hosts Feras Moussa and Casey Minshew sit down with Trent Lee, a multi-year IBBA Top Individual Deal Maker and #1 business broker in the U.S. for closed transactions. Trent breaks down how great brokers actually think about valuation, deal structure, and—most importantly—how they qualify both sellers and buyers.
From getting price and structure “bankable” for SBA lenders to using SDE, EBITDA, and adbacks the right way, Trent explains why most brokers are doing sellers a disservice and how he approaches deals very differently. He also shares exactly what buyers need to do to be taken seriously, stand out in a database of 45,000+ buyers, and get access to the best pre-market listings.
Whether you’re a first-time buyer, an independent sponsor, or a founder thinking about selling in the next few years, this is a masterclass in how deals actually get done in the small and lower-middle market.
In this podcast episode, we discuss:
- How Trent went from frustrated seller to award-winning business broker and credentialed appraiser
- Why most business brokers get valuation wrong—and how that hurts both sellers and buyers
- The appraisal and valuation process: SDE vs. EBITDA, adbacks, debt service coverage, and SBA guidelines
- How Trent “indoctrinates” sellers with education before he ever takes a business to market
- Getting sellers realistic on both price and terms (the price/terms “teeter-totter”)
- Why some owners discover they’re not actually ready—or able—to exit when they first call a broker
- How Trent built a 45,000+ buyer database and uses pre-market listings to drive competition
- The rise of more sophisticated buyers and why “buying boring businesses” is beating startup risk
- Seller financing realities: when seller notes help, when they hurt, and why he rarely recommends big carries for SBA deals
- How to approach brokers the right way as a buyer (and what instantly tags you as a tire kicker)
- Why being “industry agnostic” is a red flag and how to define a strong, credible buy box
- The right sequencing: proof of funds, SBA pre-approval, and moving fast on non-binding offers
- How to use due diligence to justify price adjustments when adbacks or owner comp are off
- Trent’s Rocket Round: competitive tennis, a $19M triple-up exit story, and how he uses AI and automation to close more deals than most brokers combined
Guest Contact Info:
Website: https://www.sellbusinessinlasvegas.com
Email: Trent@fcbb.com
LinkedIn: https://www.linkedin.com/in/trentlee
YouTube (free education for buyers and sellers): https://www.youtube.com/channel/UCncOtmBY1gbuE6wDyaFfwBw
Social & free buyer resources hub: https://linktr.ee/trentlee
Additional Resources
M&A Launchpad Conference:
M&A Launchpad Conference – Upcoming May 2, 2026 in Houston, TX. Get your ticket at https://www.malaunchpad.com and use code LAUNCH for $150 off.
Sponsored by O’Connell Advisory Group
Work with a trusted Quality of Earnings and Financial Diligence partner who focuses solely on business acquisitions.
Visit: www.oconnelladvisorygroup.com
Contact Casey Minshew and Feras Moussa at info@equity-launchpad.com
Equity Launchpad helps founders and operators learn to buy, operate, and scale small businesses
Learn more at https://www.equity-launchpad.com
🎧 Podcast on YouTube: https://youtu.be/dbpQT4V1IXQ
🎧 Podcast on Spotify: https://open.spotify.com/episode/1FZnIW1AvU8MTLmAow7WQ9?si=bmoYcgoZRYy2JHuRW54T_A
🎧 Podcast on Apple: https://podcasts.apple.com/us/podcast/how-top-business-brokers-really-choose-buyers-with/id1740382586?i=1000736644063
Transcript
00:00 Hey there, this is Casey with the M&A Launchpad podcast. Put it on your calendar. This is a do not missed
00:07 one-day event. There’s going to be incredible headliners, but really at the end of the day, you’re going to get a
00:12 chance to talk to people that have made acquisitions, learn from some of the challenges that they’ve made because
00:18 this is definitely a challenging process. But more importantly, there’s going to be people there that can help
00:23 you and support you along the way from great vendors, quality of earnings, how to run the due diligence process, and
00:29 how do I get financed, how do I raise capital, how do I structure all of these things. It’s going to be hundreds of
00:35 people that are all focused, like-minded people, and man, everyone that’s come has given us incredible feedback. We
00:41 look forward to seeing you. All right. On today’s episode, we interviewed Trent Lee, who is the seventime award winner for doing the
00:48 most transactions as a broker. right? And a con, you know, a constant wealth of knowledge talking both about what
00:54 happens on the sell side, how does a broker qualify sellers, educate sellers, get them up to speed, and kind of really
00:60 level set where they are in reality. And at the same time, right, we dived into the buying side. What do buyers mistake,
01:07 you know, what are the common mistakes that they make? What do buyers do? What should they do? And how does a buyer become a better buyer for a broker? So,
01:14 Casey, what’s some of your takeaways? So for all the listeners here, if you don’t even listen to the whole podcast, you
01:19 need to go to Sean’s website and go through all of his stuff. He’s built absolute amount of material and content
01:25 to help you through your journey um of buying a business. Great amazing tips.
01:31 However, you should listen to his podcast because it was an incredible amount of nuggets to hear from the guy
01:36 that you’re trying to find the business from. And you’re talking about like Ferris mentioned, you know, seventime
01:41 award-winning at the IBBA for the number one transactions in the world. that that is incredible amount of volume. Uh but
01:48 you know to be able to get to a deal where he prices right and puts it out there. Those are the type of brokers you want to be with. Those are the people
01:54 you want to talk to. Uh there’s a lot of brokers out there, but not a lot of brokers do what the good ones do. Yeah.
01:60 You know, and it’s the first time we either of us have spoken with Trent, and it was kind of nice to see he’s very mellow, very level-headed, right? and he
02:06 just walks through here’s the thought process, here’s the why, here’s the hows, and here’s how as a seller or a
02:13 buyer you can come to those same conclusions, right? And that’s ultimately what helps get deals done. So, lots of nuggets in this one.
02:20 [Music] All right, guys, just take one second
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02:55 buyers like yourself successfully purchase and operate enduring, profitable businesses. In fact,
02:60 Patrick’s helped some listeners of this show. So, if you’re buying, looking for help with the quality of earnings,
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03:11 notes. Hey, Trent, welcome to the show. Happy to be here. Thanks for having me. Nice, man. Coming in from Vegas. So, uh,
03:17 you know, we’re excited to hear from you. And, uh, you know, having a good business broker, somebody that not only knows buy side and sell side and those
03:24 things, it’s mission critical because, as you know, there’s a lot of business brokers out there. there’s a lot of
03:29 people in the in the area and just because there’s a lot doesn’t mean there’s a lot of good, you know, and so
03:35 there’s there’s a lot of challenges that that are new listeners that are trying to buy a business, working with a broker, what they need to know. So, man,
03:41 tell us about your background. Jump. Let’s jump into it. Yeah. So, it’s interesting because
03:46 mentioning a lot of these business brokers we were talking about before just some of them are honestly so bad.
03:51 They’re doing a disservice for buyers and sellers. I my background was I got fed up dealing with business brokers
03:58 having sold two of my own businesses that by the time I sold the second one I’m like you know what I’ve got an
04:05 accounting undergraduate I did uh started my masters of finance at Harvard transferred over Texas A&M into the MBA
04:12 program I’ve got the background I’ve got the experience I think I could do a better job than these guys that I keep
04:19 running into and after I sold my second business I’m like I’m time time to get
04:24 into it. So, I went and got licensed, credentialed as a both a business appraiser and a business broker uh so
04:31 that I could really understand not just taking a business to market, but properly valuing it. And it’s one thing
04:37 to get the price right, but you got to get the deal structure right as as well. And that’s where I think a lot of business brokers miss the mark.
04:44 Tell me about that appraisal process because, you know, I before we got in the acquisition sides, I did I I was a
04:50 business broker. I did a couple business brokerage because I was a finance guy, moved into the the brokerage. I I got a
04:56 I got a deal done and I’m like, “Hey man, that you know, this is this is fun.” You know, I enjoy this. But the valuation side, I think, is such a
05:03 critical component, especially because I’ve talked to and Ferris and I both have talked to to sellers and they’re
05:09 like, “Yeah, the broker told me I can get 10x on this.” And you’re like, “Man, I can’t even how do I even start and be
05:15 realistic with them, you know?” Yeah. So, how is that that valuation process? I it was great. And and honestly, I had
05:22 a hard time really diving in head first as a business broker until I went
05:28 through and got a basic well from a credentiing standpoint, but a really good basic understanding of how
05:34 valuations work to begin with. And most business brokers don’t do that. They just dive right in as a business broker.
05:41 And that’s to your point, that’s the that’s the biggest issue. That was why I had a I struggled as a a business broker
05:47 trying to initially get myself put out there in the market as a business broker because if I don’t know how to properly
05:52 price a business that can be backed up by SBA that can get financing that can
05:59 meet debt service coverage ratio guidelines that can meet the SBA SOP guidelines then I’m just wasting my time
06:06 and I’m wasting the seller’s time by setting unrealistic expectations so that when I go to market when I go and meet
06:12 that seller I want to have confidence to say, “Not only here’s what you can sell your business for, but I know the
06:19 underwriting criteria, I know the appraisal practices, I know the guidelines. I can now take this business
06:24 that I just gave you a price quote for, and I can also get it pre-approved with the SBA. I can get it generally. I know
06:32 we can find a buyer and get this financable. It’s bankable.” And and that’s that that’s what I really felt
06:38 like I needed before I dove in head first as a business broker. Otherwise, I’m just wasting everyone’s time by
06:45 telling, you know, making wild guesses as to what I think the business can sell for.
06:51 Yeah. And I think, you know, as a seller, right, you want to be told the right number because the last thing
06:56 people want to do is deal with three trades, right? You know, as a broker, you set it too high. Now, the seller’s expecting something that’s not going to
07:02 transact. And as a seller, you’re ultimately pissed, right? Because you in your head, you’ve already spent the money, right? And now you’re like,
07:08 “Okay, maybe I’m going to sell for a 5x and not a 9x.” And so, you know, it’s a problem in this space and you know, you
07:14 see the same thing in the even the commercial real estate side, right? Where you kind of have to get level people off on where reality is and get
07:20 them there. And so maybe question for you though is you know for sellers, right? How do you find these sellers and
07:28 you know are they coming to you for valuations or are they coming to you already ready to transact, right? And
07:34 you know how much prepping are you doing with the seller before you even go and list it and start to tie in the buyers?
07:40 It’s a really great question. So, kind of a two-part component of that question. How are they finding me at this point? Um, I’ve done I’ve closed
07:47 over 650 transactions. So, at this point, there’s two things that uh I was
07:53 really quite surprised about. It’s I have not spent a dime in marketing um in
07:59 the last eight years. It’s 100% referral because I’ve done so many transactions.
08:04 And then here’s the thing that I didn’t actually plan on happening. There’s a there’s a small percentage of
08:10 transactions that are just going to turn over. Like I sold a business three or
08:15 four years ago and for whatever reason it’s not a fit. They’re burned out. They don’t like it. They grew it and maybe they’re ready to exit. And so out of
08:22 those 650 transactions, if I get just three, four, 5% of those that need to
08:28 resell, I get a built-in 20 or 30 deals um that are just coming back to me from
08:34 deals I’ve done previously. Um, and so what ends up happening is because, and
08:40 then that second part of the the question is is, you know, how involved am I with the sellers? I do a a bunch of
08:46 educational training and videos before I even meet with the seller to begin with.
08:52 So I call it like my indoctrination, my prefring videos. So before I even go out to meet
08:58 with them, I’ve sent them videos on what SDE is, what IBIDA is, how to calculate
09:04 what adbacks are, what what are justifiable adbacks, where can we actually do a bank approved adback, and
09:11 where have they maybe been a little bit too aggressive on their adbacks and they just killed themselves on the valuation.
09:17 I talk about debt service coverage ratio, market multiples, and so I’m sending out a lot of content to my
09:23 sellers before they even meet with me so that by the time I meet with them, they
09:28 have a pretty good idea of everything I’m going to talk to them about, what SDE is, what market multiples are, and
09:35 now it becomes a matter of plugandplay of the numbers. I’m not going into the
09:40 this seller who has no real background or education on how valuations work and how transactions are actually transacted
09:48 in the real world and coming in with my opinion of what the business is worth versus their opinion. Now, because I’ve
09:54 given them so much background and education and content on how valuations work and what their numbers are that
10:01 we’re just plugging in their we’re it’s math. We’re just now plugging in and we’re calculating IBIDA together. We’re
10:07 calculating sellers discretionary earnings, both of which are important where a lot of brokers miss that. But
10:13 we’re going through and then we’re pulling up market multiples together and we’re just plugging in the math and we’re calculating debt service coverage
10:19 ratio together. So now they can see how does the money math really work in this transaction. It’s now no longer my
10:26 opinion of what I think their business is worth. Kind of like fighting against their opinion. And then you know how it
10:33 goes. The sellers always think their business is worth more than it is. But when they really understand the concepts behind valuations and we’re just
10:39 plugging in those numbers, they really can’t argue, oh, you know what? Yeah, maybe my business isn’t worth $10
10:46 million and I need to be a little bit more realistic on the price. And it really helps set the realist and that’s
10:53 what I think a business broker’s a really important role. Could agree more is is setting that
10:59 expectation from the seller standpoint because that’s the that’s the thing, man. It’s like cuz you know when you
11:05 meet with sellers right we do a lot of offmarket so we’re doing a lot of the education and the meetings with them
11:11 right we don’t we’ve traditionally you know used brokers to build our thesis over the last few years we’ve met a few
11:17 good relationships but all the deals that we’ve closed have been through referrals and contacts and we’ve had to go through an educational process with
11:23 them valuation is always it’s going to be your biggest one right what is your company worth you know how do you do it
11:29 how do you trade it um so if I have a broker that’s doing that and I know that
11:34 they’re bringing me a deal that’s already been through that conversation and you’re saying, “Hey man, this is just this is just this is what it’s
11:40 worth.” It really cuts down a lot of what I would call the noise that’s in between these deals.
11:46 So, I would imagine that when you’re working with a buyer and they come trenching the deal, they know like,
11:52 “Hey, you know, we’re we’re going to know what it’s worth, what’s the value, it’s going to be justified. I don’t have
11:57 to sit here and spend days going back and forth to the seller or months.” Yeah. Because we we know if we’re
12:02 working directly with an offmarket like where we ran into the seller, we met the seller, we know that that’s a one-year
12:09 plus transaction, right? There’s the them getting educated, understanding, going to their buddies, realizing it’s
12:16 not, you know, it’s a whole thing versus it comes through a broker typically, right? That seller’s already been
12:21 levelheaded because the broker is probably not going to waste their time if the seller doesn’t get there, right? If someone, you know, wants something
12:26 just completely out of left field, a broker is not going to spend their time. you only have so much bandwidth to do deals and and maybe a question I have
12:33 ideally yeah ideally and and not only is it just the broker setting the realistic expectation on the price but there’s a
12:39 flip side of that coin which is the deal structure what are the terms both of
12:45 those conversations I think are really important to have upfront with a seller to know that they can’t have their price
12:51 and their terms it’s a teeter totter if they want the price we got to be flexible on the terms if they want their terms they’re getting all cash up front
12:57 then we got to be flexible on the price and so running that what I call the money math. We got to work through the
13:03 the money math of both what is the business worth, but what are the terms to make the deal transactable.
13:09 Yeah. And question to you though, how many times or how often is it that you work with a new seller and you get them
13:15 educated and they they know that they have some homework to do to go get their business more, you know, sell ready,
13:20 right? Is that pretty often where you kind of do the first pass and then they’re like, “Hey, give me another six months so I can really hyperfocus on IBA
13:26 and prove it out, etc., etc.” or do they usually get past kind of the that gap
13:32 and you know they’re ready to transact? Yeah, it’s a really good point. Percentage wise, I don’t know. I don’t
13:37 track that. But if I had to guess, majority of the people that call me are,
13:42 you guys have heard of, you know, the D’s, divorce, disease, death, whatever, whatever it happens to be, there’s some
13:49 reason they’re selling the business. It’s not just because they’re kind of thinking about it and they want to
13:54 retire in the next couple years and they got a couple years to plan and and prepare and they’re getting evaluation
13:60 ahead of time. Obviously, I would love that, but most of the deals I’m getting
14:05 are people that are approaching me that say, “Look, I’ve got to I’ve got to sell this. There’s a real reason driving the
14:11 sale.” Maybe they’re just maybe they’re just flatout burned out uh as well, but
14:17 there’s primarily a reason. So, they’re going to probably, as long as it’s somewhat reasonable, that valuation,
14:24 they’re going to probably just list it and and and go with me. Unless they are
14:30 so unrealistic or they have too much debt or they need so much money and it’s just not any close, then they’ve got to
14:37 go back to to reality. But that’s a big mental blow for a lot of these sellers because by the time I’m talking to them,
14:42 they’re already thinking about exiting. And so when they hear they can’t exit for anywhere close to what they eat or
14:48 they’ve got, like I said, too much debt, they have to then mentally go through that gymnastics of getting themselves
14:54 back not only into the business, but back into growth mode to grow that business. And a lot of them just aren’t
15:00 aren’t there. At least that’s how that’s that’s at the point I’m talking to them. Yeah. Yeah. Running a business is very
15:07 different than growing a business, right? And that’s why a lot of times, you know, public companies is two different CEOs, right? And it’s just,
15:13 you know, some people get complacent in their business and it’s just tiring to grow. So, yeah. And I know you mentioned before
15:19 and I don’t want to forget because I’m going to write it down. So, you have a lot of content out there. You’ve got a lot of materials and things. So, someone
15:24 like us that are like I can use that when I’m going through my sales process with these offmarket deals to to start
15:30 thinking about, hey, my education piece. So, like where do you have all that data? How does someone follow you and
15:35 get all that that content? Any social media channel. They can find me on on all of them. Um,
15:42 and then I’ve got a uh a school community with like we were talking about about 30 hours of uh free content
15:50 walking them buyers. This is buyer focused content. How to be uh prepared as a buyer, how to be taken seriously by
15:57 business brokers, what to do to to really kind of define your buy box, get
16:02 preapproved for SBA lending, how to find deals, how to how to analyze deals.
16:07 We’ve got a tool analyzer, how to underwrite deals, all the contacts from
16:12 due diligence experts to lenders to attorneys to escro services. I’ve got
16:17 this school community. It’s totally free uh for buyers to go through and um they
16:23 can find it any uh social media channel uh of their preference. I’m I’m on it. They can look me up and find all sorts
16:29 of videos and uh links to anything they want to go through. Yeah, we’ll put that in the show notes
16:35 for listeners. So I guess shifting gears, right? You kind of touched on so we so far we’re talking about selling,
16:40 right? The sell side, right? Let’s talk about the buy side, right? You know, how do buyers find you? And really, how does
16:46 some of those early conversations go? And what are some of the I’m going to ask you a bunch of questions. How do some of those conversations go? How do
16:52 they find you? And what have you seen maybe change over the years, right, with
16:57 buyers, right? Have you seen anything change in terms of the deal size, the type of deal, the quality of the deal,
17:03 all the above? Yeah. So, a couple of questions there. We’ll we’ll tackle each of them. How did they find me? Um, at this point, I’ve
17:11 got um probably 45,000 buyers on my d in
17:16 my database, segmented by uh industry that they’re looking for, all of which
17:22 who have like gone through the process. They’ve signed NDAs, they’ve signed non-disclosure processes. Uh, and so I
17:30 email them listings. Uh, in fact, talking about social media, what we just talked about, I post pre-market deals
17:35 about 7 days before they go public. I’ll post it on my social to my social media followers, but I’ll email out uh to
17:43 buyer database on uh deals that are coming up or deals that are on the market. Um, good good listings will
17:52 attract the buyers. So, I know this is a buyer focus, so let me just kind of give
17:57 you the the broker mentality here. buyers are a dime a dozen. I I have no
18:03 shortage of buyers. Um, a good listing, in fact, I have I’ll give you an example. I have a medical billing
18:09 company that we’re closing on this afternoon, $3 million transaction. I had 27 full price LOIs,
18:18 not not just like indications of interest, not not not to include the hundreds and hundreds of buyers that
18:25 inquired about it. I’m talking about 27 LOIs. Good listings will attract buyers.
18:32 Um, and so to answer your question, how do they find me? One, my database, uh, and then two, good listings will will
18:38 attract the buyers. And ideally, um, if if you find a good business broker,
18:44 you’ll want to get on their their list, uh, somehow connect to them to find pre-market deals. Uh, that’s helpful
18:50 from a buyer standpoint. your other question about um what have buyer what have I noticed
18:57 have changed in the in the marketplace buyers are and this is fantastic I think
19:02 this is a really positive change buyers are becoming more sophisticated there
19:07 are tons of con it’s very much the old uh kind of cool startup the grind of the
19:16 startup what used to be uh you know bragging rights and cool has switched to and and I think it should be because
19:23 it’s so much more safer and less risky to buying an existing business. Uh as you’ll see on online buying boring
19:30 businesses and with that it comes a whole host of some good some bad uh
19:37 social media gurus and content creators that are providing their approach to how
19:42 to do this and how to analyze deals. But comes with that a lot of content and a lot of education. And so buyers are
19:48 becoming more sophisticated and they’re realizing how much safer it is and how
19:54 much better it is, how much easier it is to buy an existing business that’s profitable, that’s established, that’s
19:60 got history rather than uh start a business up from from scratch, the high-risk startup. And th so those
20:07 buyers are coming better prepared and better educated than they were years
20:12 ago. At this point, I’ve been almost in the industry for 10 years. And so there’s a noticeable shift in the
20:19 education that the buyers are coming coming up with here. Yeah. And it’s I mean it’s it’s the the
20:25 fact the internet makes information, you know, readily available to everybody, right? Same thing in the commercial real estate. People used to think the
20:31 apartment down the street was owned by some big institutional company out of New York and they didn’t understand that
20:37 it’s syndicated, right? It’s, you know, traditional people that have some extra money that are looking to invest. And so
20:43 I think the the transfer of knowledge and information is just really opening. I think and that’s really the I think
20:48 that’s really what’s starting to accelerate in this space, right? You know, we just got back from the Meguire Woods Independent Sponsor Conference and
20:54 there have been more and more people there each year, right, than the previous year and significantly more. I
20:59 mean, I think they had almost 1,700 people register for this one versus the conference started 7 years ago, right?
21:04 And you know, people are getting more sophisticated. They’re starting to understand that this is something that can be done and they’re starting to learn on how to structure it, right? And
21:11 some people, you know, you know this as well as I do Trent, some people just shouldn’t buy a business, right? Buying a business is not for everybody. So some
21:18 people are infatuated with the idea versus the reality of running a business is a whole another thing. But for those
21:24 that have the acumen, that have the knowledge, have the the the sophistication, they’re getting the
21:29 knowledge at least to be able to go transact and do it correctly. And I think that is a huge shift in the space.
21:35 Yeah, I I agree. and and the the better a buyer can be as far as education as to
21:40 what to expect and and what to know, the better prepared they are because at the end of the day, they’re the ones that
21:46 are coming in here signing a personal guarantee with the SBA or partners if they’re raising funds and they’re the
21:51 ones that have responsibility to to operate the business and so it just makes it for a lower risk investment uh
21:58 which in turn is a better better option uh for for them. So, of the deals that
22:03 you’re looking at, um, sellers carrying, what are you seeing? Are you seeing a trend now, especially cons, you know,
22:09 SBA rates are fairly high still. They’re around 10%. Are you seeing, you know, the seller
22:14 being willing to carry 20% or 30% on a note? Um, how are you seeing that trend?
22:20 And it could be just deal by deal, right, if you price it right, etc. But where are you seeing those seller carries?
22:26 Yeah, it’s it’s a good question. It’s it’s I’m a little bit torn on this because from one st first off most
22:34 sellers don’t want to carry and so as a bro as a broker I’m prepping them to say look you need to prepare yourself there
22:40 likely is going to be some type of seller carry here but and and I get why
22:46 the bank will want to do that and see that. I get why the the buyer will will want to see that. But on the flip side,
22:52 I’m not a huge fan of of seller carry notes, at least large portion, because
22:57 most of the time, most of my deals, my my good size, and I play in the small to
23:03 medium-siz market. I’m not doing huge transactions. So, most of my deals are are SBA, the good ones are SBA um
23:10 funded. Yep. And the reality is most seller carry notes are at a at at a shorter term than
23:17 the buyer could get with an SBA. And so from if if I’m I’m putting myself in the
23:23 buyer’s position, I don’t really recommend that they come in with this huge seller carry note, 30%, 40%.
23:31 Because that seller carry note is typically going to be at a much shorter period of time, 3, four years, maybe
23:36 five, where they could roll mo majority of that over and get a 10-year term with the SBA. So, I don’t traditionally um
23:46 recommend much more than a 10% seller carry just if you want from a buyer standpoint to have the seller have some
23:52 skin in the game and that shows the bank that there’s some skin in the game, but it doesn’t really benefit the buyer to
23:58 have a a longer uh a bigger seller carry than than that at that point. Otherwise,
24:04 they’re now compressing their cash flow because they’ve got to amortize, they’ve got to pay this seller carry note much
24:10 quicker than they would through the SBA. Yeah. But see, I think, you know, I
24:15 think it depends on the type of deal you’re doing, right? Because I from our side, I love seller carries, not because we need them to carry the money, but
24:22 it’s a lot of times I can get better terms if I do it correctly where it’s a win-win. Seller’s happy, we’re happier.
24:28 And again, that skin in the game, right? like they are there motivated to solve problems and you know we have a we have
24:34 a company that we bought fairly sizable company $20 million transaction and the seller has been an important part of
24:40 that and it’s been valuable he’s got his seller carry he’s there part of the board meetings pushing things along and
24:45 we’re continue to grow that business and without that commit from the seller it’d be we’d probably be in a very different
24:51 situation than we are today and so and I think we would be so I think it really does
24:56 depend on the type of business right maybe is kind of how I would personally qualify that. Yeah. It also depends on the size of the
25:02 business, right? If we’re if we’re talking about a $20 million transaction, that’s a totally different deal structure than the $600,000 little HVAC
25:11 company that’s just kind of a small, you know, three or four manation that you’re right. It it it depends on
25:19 the deal, but it also, I think, depends highly on the range, the the size of the
25:24 transaction. And if you’re using a seller carry note as a negotiation tool,
25:29 then that’s a whole separate conversation. I’m talking about just strictly from a debt servicing you
25:35 standpoint. 100%. Yeah, fair enough. Well, and I’ll tell you the uh for us, it’s like, you know, we and I think
25:41 almost everybody that’s being trained out there right now is is talking to sellers to have a seller carry. SBA, no
25:49 question about it, wants to see the seller to carry something. I mean, I’ve done thousands of SBA origination
25:56 transactions in my career, and I mean, it’s almost like SBA wants to see at least a seller carrying, like you said,
26:02 10% or something, so they have some skin in the game. Um, so anyway, it’s just one of those things, you know, it’s the
26:08 for our listeners especially, right? They’re they’re thinking about, hey, I’m going to sit down with this seller. Um,
26:13 I’m working with a broker. Um, and I’ve met some brokers along the way that just kind of put us directly with the seller.
26:18 Don’t really get involved. They’re more matchmakers. and we’ve got to have these conversations. Um, so
26:25 I think depends on how vital uh the business is around the seller like if
26:31 they’re core and their relationship and their personal goodwill and personal reputation, then that seller carry
26:37 becomes even more important. Obviously, we can’t do an earnout with the SBA, but you can do a forgivable adjustable note
26:44 and get a lot of the same components of an earnout that um would be in
26:49 compliance with the SBA. And so again, if you’re using that as a negotiation for a deal structure, then absolutely
26:55 it’s a it’s a vital component. And so you’re having these conversations with your sellers. I I mean, if like
27:00 this is the stuff, man, I’ve I’ve talked to hundreds of brokers um about deals. Um I have you’re probably one of the
27:07 first I’ve talked to that that says, “Hey, look, I do valuations. I sit with my sellers and give them education.” So,
27:13 when you’re putting out your listings, like you said, that’s why you’re getting so many LOIs because you’re putting them right in a pocket where the buyer
27:19 doesn’t have to go, man, that’s just how did he get there? You know, I don’t have
27:25 to question your FDA. You’re just I’m not sitting there going like, “Hey, Trent, you know, what is this ad back?
27:30 There’s there’s not an ad back.” You know, you’re saying, “No, we’ve already done it. We already know. Is that an ad?
27:35 Is that truck an ad back or not?” And it’s like, “Well, yeah, the truck is, but the Ferrari is not, right?” and kind of getting those conversations sorted
27:41 out with the seller to get to something that just as a buyer makes it easier.
27:46 So, for all your listeners, um you know, obviously you talked to these new buyers, right? So, let’s talk about new buyers. Um you talked to them, you’re on
27:53 the phone with them. give us some things that our listeners need to know. Like give us that five like top things like
27:60 do not do this, do this type thing that you would for a guy calling you right off the, you know, fresh out of uh NBA
28:07 school wanted to make a position. What are those things they need to do? What what should they not do?
28:13 So, here’s here’s what I would say. Like if I were in a buyer’s position, let me
28:18 just tell you like how I would approach brokers to really be taken seriously and and to to get on their on their, you
28:26 know, their essentially kind of VIP list. Uh first off, I would I’d be
28:31 reaching out to multiple brokers, not not just one. What you’ll find is if you reach out to 10 in your area, you know,
28:38 six or seven of them are going to be so worthless you don’t even need to bother talking to them. but you’ll find two or
28:44 three or four really good ones. And so you want to start building relationships with a with a number of different
28:49 brokers. You want to be prepared with proof of funds. That’s one of the first
28:55 things a broker is going to find out is who especially now as buyer is becoming more popular to buy these businesses
29:02 online. There’s unfortunately, I think my personal opinion, gurus out there
29:07 that are doing a disservice trying to tell people they can buy a business for zero down by an absentee business and
29:13 and and do zero money down. And so it attracts all of these people that from a
29:18 broker standpoint, part of the broker’s job is to essentially be the gatekeeper to try and make sure we’re not wasting
29:23 the sellers’s time because they’ve got to primarily be focused on running their business and keeping the margins up and
29:29 keeping the profit up and the growth up rather than spending all their time answering questions that from someone
29:36 that’s hoping to maybe raise their the funds and borrow money from their uncle and don’t worry about it, I’ll get the
29:42 funds later. That that that really doesn’t work. So, I would be connecting with multiple different brokers. Be
29:48 prepared to to quickly sign their whatever confidentiality agreement, non-disclosure agreement. If they ask
29:55 for proof of funds, you need to have something available to show that you are not a tire kicker. I would get
30:02 pre-qualified from an SBA lender. Find an SBA lender that you like. Uh if you
30:08 if you don’t, you can reach out to me and I can point you to to one or two of them where you could get pre-qualified.
30:13 and then define your buy box as a buyer. So don’t call a broker and say, “I’m
30:19 interested in anything that you’re that you have for sale that makes money. I just I just want cash flow.” Or what
30:26 buyers will say is, “I’m industry agnostic.” That language is the first
30:31 thing a business broker is going to hear and say, “That’s a tire kicker. This is someone who has no realistic that that
30:39 the only people who use that language are people who have never bought a business before. People who buy
30:44 businesses who know they know what they’re looking for. They have a defined criteria. They have industries where
30:50 they know they can have core competencies. They have experience to get in there and operate the business
30:56 and and make it successful. And so you want to define really what you’re looking for so that you can reach out to
31:04 the broker and say, “I’ve got proof of funds. I’m preapproved. Here’s what I’m looking for and why.” That’s that’s an
31:10 important question because one of the first things I ask potential buyers is why is why are you interested in this
31:16 business? And if you tell me because it makes money, my next question is, “Well, great. I get it. Yeah, that everyone
31:22 wants a business that makes money. But if I’ve got like I’ve got right now a a
31:27 uh cabinetry business that makes fantastic margins, but it’s it requires
31:34 a contractor’s license. And just this morning, I had a group that said, “We’re ready to go. This is this meets our our
31:41 criteria.” Their only criteria was bottom line profit and and the margins.
31:47 And I’m like, “Well, great. In the state of Nevada, you’re required to have a contractor license to do this particular
31:53 set of work. Why are you interested? Do you have the background? Uh, no. We we
31:59 don’t. We We haven’t really thought about that. Well, that’s just a waste of time. So, there’s all sorts of
32:04 businesses that sometimes you can get away with not having direct industry experience, but the the first thing a
32:11 lender is going to ask you is if you go to them, you’re they’re going to say, “Well, do you have some sort of
32:16 ancillary experience? Is there some sort of background that that you have that
32:21 would give us some assurance that you can operate this HVAC or this plumbing company or this surgical center and and
32:29 so having a defined set of uh criteria and knowing why that’s a good fit is is
32:37 really helpful. So, I guess just to recap is have proof of funds ready, get preapproved with an SBA lender, and um
32:45 have kind of narrow down what you’re looking for and why it’s a fit. And then here’s the last thing I would say,
32:51 brokers are looking for. I mean, and I’ll just be realistic, good brokers
32:57 that have good listings, like I mentioned before, buyers are we’re just
33:02 overloaded with buyers. Honestly, I’ll get a 100 plus inquiries every single
33:08 day for my my different listings. I can’t possibly have a conversation with all of them. I can’t possibly talk with
33:14 all of them. What I’m looking for is those those buyers that are that come
33:19 prepared, that have the right background, that have the criteria, that have the funding, that have the proof of
33:25 funds, have the right experience. And then here’s what I would recommend as a buyer. be quick to submit some sort of a
33:34 non-binding offer, either an indication of interest, a LOI, and be slow to make
33:39 decisions. Here’s what I mean by that. Because brokers have they’re so they’re so overloaded, good listings will just
33:46 get hundreds and hundreds of buyers and and we it’s sometimes hard to sort
33:52 through who’s serious and who’s not. And so if a broker gets a good buyer that’s
33:58 quick to make a decision, meaning they’re in they’re they’re going to submit an offer but slow to make I I
34:05 should say quick to make an offer, slow to make a decision, take your time in due diligence. That’s really where you
34:11 got to make where you got to do your homework. And so I don’t mind going through and spending my time with people
34:17 that are quick to say I’ I’ve got some interest. I want to make an offer. And then take as much time as you need and
34:24 due diligence to really then get into the tax returns, the bank statements, the financials. That’s where you got to
34:30 do your homework. And you do often you just don’t have the information you need to properly make a decision if you’re
34:38 trying to like stand out from the five or 600 buyers that inquired about a
34:43 business rather than trying to make that decision on the back end once you get into to due diligence. and it’s a
34:48 non-binding offer. So, if it’s not a fit, then it’s not a fit. You move on. If it’s uh an option where the broker
34:56 was sloppy in their valuation and they were too aggressive with the adbacks and you need to retrade, then you go to them
35:02 with justification for saying, “Look, you added back two owners wages that are full-time operators and you just can’t
35:09 do that. You can only operate add back one and then we got to factor in the fair market value to replace the other.
35:14 Therefore, there’s a pricing adjustment that that’s justified here. Yep. Yep. Great advice, Trent. Absolutely great to
35:22 have you. So, now we’re gonna get to the other side. We want to get to know about you. So, we’re going to turn over to our rocket round
35:27 where we ask the the guests the same three questions. So, first question. What do you like to do in your free
35:33 time? I play tennis. Uh competitive tennis. Uh most of us are old kind of fat college
35:41 uh college players, but uh we still play. In fact, next week uh our team uh
35:47 made it to the top 16 teams in the nation. So, we’re going to nationals uh in San Diego for uh for some tennis. So,
35:55 I I I play probably four to five times a week in the morning. All right. Well, so then the important
36:00 natural next question. What are your thoughts on pickle ball? Pickle ball? I’m not old enough for
36:06 pickle ball yet. One day I’ll get pickle ball a lot easier with my daughters. Yeah, but when you’re
36:11 competitive tennis, you’re it’s hard to get to pickle ball, right? Yeah. It’s a little slow. Um Yeah.
36:17 So, uh All right. What’s your most memorable moment in your business journey? Here’s a here’s a good one. It’ll take
36:23 me just a minute to to tell you the story. So, I had a uh granite fabrication company for sale, $5
36:29 million. We got a full price offer. Got a buyer uh pre-appro I’m not pre-approved, fully approved with the
36:35 SBA, one week out from closing. and the seller calls me and says, “Hey, let’s
36:42 pull the business off the market. I’ve got a ton of work coming up. Give me uh give me a year or two. I think I’m going
36:49 to double the business and then I’ll call you and we’ll sell it for double the price.” Like, “No, we’re not doing
36:54 that. We’re one week out from closing. These these guys have uh not only uh got
36:60 fully funded and and approved and escrow is ready to go, they quit their job to buy your business. You’re not backing
37:06 out.” Well, he backed out and it was the only one in the one of the only times
37:11 where I actually I was upset and so we went to court uh arbitration at least
37:18 for to force the sale. Came up with a a settlement. He he essentially owed us
37:23 the full fee cuz we did our job. Of course, we settle it for much less before he ended up paying that uh that
37:31 discounted fee. I threw in there that I I said, “You know what? if he sells it
37:36 every time anytime in the future, he needs to reach out to me and give me another chance. I thought for sure this
37:41 guy hates me. He’s probably not happy at all. Um, nothing’s going to happen.
37:47 Well, granted, to his credit, two years later, he calls me, says, “Hey, I’m
37:53 ready to sell the business. Not only did I double it, like I told you, I tripled it, and I want you to come and sell it.”
37:59 And we took it to market, sold it for$19 million. Wow. and he paid the full fee and it was
38:07 as happy as can be uh over it. And uh what a good story. It was fun to watch it. I mean, it
38:13 didn’t work out great for the the first round, but uh it was it was fun just to kind of see that that that whole thing
38:18 go from start to finish. And the buyers didn’t have any teeth to force the sale or did they get something in mediation
38:24 settlement at least to try to they got something and and they didn’t want to it wasn’t worth it was too big
38:29 of a legal hassle to try and force it and to go through and so they got something to just kind of part ways and
38:35 and be satisfied. But you know what that’s some conviction by the seller from the seller because he
38:40 was like hey I’ve got this and you know what he he did it right and then he took care of you. And that’s what’s pretty
38:46 awesome. We actually have a seller like that right now. Since then, he’s called me and I’ve sold two other businesses uh
38:53 for him, including some some uh commercial real estate that he had tied to one of the businesses. So, I thought
38:58 he for sure was never going to call me again. And he he had no problem. He had no ill ill feelings. He’s like, “Hey,
39:04 this is just business. I knew I was going to be able to sell it, so I was happy to to pay you.” And and it it
39:09 worked out. Great story. Great story. All right. And last question. Favorite tool or resource?
39:15 AI. Uh, I’m sure you get it all the time, but I have a ton of automations in
39:22 my process. Um, I automate everything. U, we didn’t even talk about that, but
39:27 it’s probably why, um, I have so many more closings and listings than most business brokers out there is because my
39:34 entire process is automated and I use a ton of AI in uh, in everything I do.
39:41 Yeah. And it’s funny for your business actually, right? A lot of your job is is qualifying buyers. So, do you as as a
39:47 person gets into your database, do you have it automatically just go and hey, give me a quick, you know, kind of three sentence paragraph about Ferris or about
39:54 Casey and it just kind of scrubs it just to help you know which buyers to actually focus the time and effort on.
40:00 I do have that, but further in the process, I don’t do that for every single buyer because like I said, some of some of these listings, we’ll get a
40:05 hundred NDAs in a day on it. And so I don’t need to I don’t need at that point. But once a buyer is ready to talk
40:12 with the seller, then I’m doing a little bit more more background. All right. Very cool. We’ll make that 102. We’ll get signed up
40:18 afterwards. I don’t think we’re on your list. All right. Tren, I know we said this, but uh for our listeners, they can get you on on social media, LinkedIn, give
40:27 us some of the profiles just so they know where where to find you. Yeah. Instagram, Facebook, Twitter, um
40:34 LinkedIn, all of those. If they just do a search for most of it’s under Trentley Biz Broker, uh, but if they just do a
40:41 search for Trenley, they’ll they’ll see it. YouTube got ton of you ton of YouTube videos. Any of the social media
40:46 channels will have in the bio will have a link to um any of the free video courses that I have.
40:52 All right, sounds good. Outstanding. Trent, thank you for spending your time with us today. Oh, thank you very much. You got it. Happy to do it.
40:58 Appreciate it. Thank you for listening to the M&A Launchpad podcast. If you’ve enjoyed today’s podcast and would like to
41:04 support us, please leave us a rating and a review after you listen. I’m Casey Menchu and I look forward to talking with you next week.
