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Today’s Rundown
Confidence in search fund deals
7 questions to predict deal quality
Annual letter of a searcher
2 deal / launch announcements
Database Overview
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Weekly Highlights
Buy Than Build published a new article on why confidence is a lagging indicator in ownership:
Confidence is not a prerequisite for ownership but a byproduct of it, and waiting to “feel ready” before acquiring a business often keeps buyers stuck in search because real confidence only forms after decisions carry consequences
The search phase creates false certainty since models, projections, and scenarios live safely in Excel with no payroll, customers, or irreversible commitments attached, leading many buyers to confuse spreadsheet clarity with true readiness
Immediately after closing, confidence typically drops rather than rises as responsibility spikes, and many new owners enter a predictable 30–90 day “valley of despair” where doubt increases even if business performance remains stable
Over the first 6–12 months, competence accumulates through lived decision reps such as handling payroll, navigating cash constraints, managing team changes, and correcting imperfect calls, which gradually compound into durable judgment-based confidence
The core shift is moving from asking “Do I feel confident?” to asking “Am I willing to take responsibility before I feel confident?” because ownership accelerates growth through exposure, and those who act under uncertainty consistently develop faster than those who wait for internal certainty
Florian von Villiez, investment manager at search fund investor Legacy Partners, shared the 7 questions that predict deal quality before diligence even starts:
Experienced LPs predict roughly 80% of deal quality before full diligence by collapsing complexity into seven repeatable pattern questions, rather than relying on exhaustive 140-point checklists that can mask structurally weak businesses
High-quality targets generate mission-critical demand, demonstrate real pricing power through successful increases in the past 24 months, and show a predictable unit-economic growth engine that does not depend on founder heroics or personal relationships
Structural moats such as switching costs, embedded workflows, proprietary data, or compliance positioning are favored over behavioral loyalty, since businesses built on “they like us” dynamics typically erode quickly under competitive or pricing pressure
Durable cash flow requires low owner intensity, meaning EBITDA stability does not depend on constant CEO intervention, while industries with high fragmentation and amateur operators offer consolidation arbitrage compared to PE-saturated sectors where margins are competed away
A credible exit thesis must be visible on day one, with at least three identifiable strategic or financial buyers likely to pay a higher multiple in 7 years
Deals that fail two or more of these pattern filters often represent structural risk rather than operational upside
Kaustubh Deo, a searcher and now CEO of a tree care company, shared his 2025 annual letter:
The past two years focused on building sustainable foundations rather than chasing rapid expansion, aligning Blooma’s company mission and vision with the owner’s personal mission to create long-term durability instead of short-term growth spikes
2025 achieved key strategic objectives including formalizing the mission and vision, growing the Tree & Plant Healthcare division by approximately 68%, and maintaining active acquisition sourcing despite completing no transactions, prioritizing disciplined preparation over forced roll-up activity
Operational infrastructure materially strengthened through leadership hires, standardized sales processes, improved pricing accuracy, upgraded communication systems, KPI-driven management loops, and SEO-driven organic traffic growth of 30%+, positioning the business for scalable execution
Pricing and capacity lessons revealed that healthcare service pricing likely needs to increase by 25–30% to reach optimal product-market alignment, highlighting the importance of experimentation before pushing aggressive expansion
The 2026 focus shifts toward achieving 15%+ organic revenue growth alongside positive profit growth, moving from “building the plane while flying it” to intentionally accelerating growth now that systems, culture, leadership depth, and risk tolerance are aligned around creating an enduring business rather than the fastest-growing one
Deal / Launch Announcements
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