ABOUT THIS EPISODE
This week we tackle two small business valuations, reveal how AI collapsed 30 hours of professional work into 90 minutes, and share a golden rule every investor needs to hear: you make your money on the buy.
Interesting Deal / File of the Week: Valuing a Small Business
We were asked to provide valuation guidance on two small businesses for partner buyouts. We walk through the full professional process — from understanding the purpose, to analyzing financials, to writing a defensible 6–10 page letter — and why that work typically costs $5,000 to $10,000. Then we show how AI let us complete both valuation letters, with full schedules and methodology, in just 90 minutes. We also discuss the growing problem of non-professionals using AI to imitate professional work — and what that means for the industry.
Lesson Learned of the Week: Buy Bank Debt
Working with a manufacturing client in financial distress, we break down why understanding liquidation value from the bank's perspective is critical to your negotiating position. We also explore an alternative deal structure: instead of refinancing the full loan, have a new lender buy out the existing bank's position at a discount — illustrated by a real acquisition where $3 million in debt was purchased for $1.5 million.
What I'm Thinking About: Make Money on the Buy
A golden rule for investors and entrepreneurs: your profit isn't made on the sale, and it isn't made on the value you add — your profit is made on the buy. We discuss why you should avoid competitive sale processes and instead create deals from a unique knowledge base. We reference a real debtor-in-possession lending example generating 50%+ annualized returns, first secured — the kind of deal no one hands you. You have to build it.
#Business #Deals #Valuation #SmallBusiness #AI #PrivateCredit #BankDebt #Investing #Leadership #SinclairRange #WinningMomentum
