On this episode of Still Searching with Jed Morris, independent sponsor Andrew Engram of Lightning Rod Capital breaks down what it actually takes to buy lower middle market companies when you raise capital deal by deal.

Andrew's road runs from walking on to the Texas A&M football team to managing offshore drilling projects in Scotland, Rotterdam, and Korea, to getting laid off in the oil crash and rebuilding through an MBA, a stack of VC rejections, and a co-founded boutique investment bank. Then he left to build his own firm. His first deal as a sponsor was a natural gas measurement company in West Texas. He spent eight months on it, talked to over 400 capital providers, found exactly one family office willing to move, and then watched performance fall off a cliff. He walked away carrying the diligence bill and the lessons.

Those lessons are the meat of this one. Do not try to win a banked auction as an independent sponsor. Do not underwrite peak EBITDA and call it normal. Know who runs the company post close before you fall in love with the deal. And remember the line Jed gives every buyer: you have a buy box, but lenders have a lend box.

A buyer walks away with: how the independent sponsor model really works, how to pressure test a deal with a personal board of advisors before going to market, and why capital raising is won in person, not over Zoom.

Full transcript: https://jedbmorris.com/podcast/independent-sponsor-lessons-andrew-engram

Watch on YouTube: https://www.youtube.com/watch?v=yQ7giA19G_E

Connect with Andrew Engram: https://www.linkedin.com/in/andrewengram19/

On this episode of Still Searching with Jed Morris, Army veteran Renan Cortez explains how he bought an $8 million restoration business with 100% seller financing and zero money down, and what happened when it all came apart two years later.

The deal itself is a masterclass. An off-market find, a QoE before terms, and a negotiation at a diner where buyer and seller worked one calculator together until they landed on 7% over 12 years. No bank. No broker. A page and a half with ketchup stains that a lawyer turned into a 74-page APA.

Then the part the highlight reels skip. Revenue slid from six million to two, and it was not organic. A $600,000 MCA loan demanded 12 grand a week. Payroll came out of his own pocket until it could not. And at the lowest point of his life, a phone call from an old military buddy arrived at the right moment. Renan handed the business back for a dollar, went back to corporate, and started rebuilding. His verdict is not what you expect: the seller financing is not what failed him. The structure that saved him from the bank also gave the sellers a reason to want the business back.

A buyer walks away with: how to negotiate seller terms side by side instead of across the table, why 100% seller financing can tempt a seller to default you, the MCA trap to avoid, and the community rule that saves more than deals.

Full transcript: https://jedbmorris.com/podcast/8m-seller-financing-renan-cortez

Watch on YouTube: https://www.youtube.com/watch?v=29H-f9Yr58I

For Halloween, Still Searching with Jed Morris joins Andrew Hoffman of the Search Fund Coalition for Tales from the Search Crypt: six real stories of small business acquisitions that ended in the graveyard.

A $20 million healthcare deal that lost most of its EBITDA nine months after close. A 100% seller-financed plumbing buy that turned into a fight over $600,000 in receivables. A star salesman who turned out to be the most toxic person in the building, holding half the revenue hostage. A parts manufacturer that tripled capacity on cheap money right before the market normalized. A searcher so deal fatigued he hoped his own QoE would come back bad. And a seller who built a copycat business across town before the ink dried. Names changed, industries pivoted. The settlements and NDAs are exactly why you never hear these stories.

This is not scare content. It is preparation. Do not overlever, because a 1.5 DSCR feels comfortable and is not. Know the incentives of everyone on your deal team. And never close with a seller you do not trust. Jed ends where most people will not go: what insolvency does to the person holding the personal guarantee, and why losing money is not losing everything.

A buyer walks away with: the failure patterns that repeat across deals, the leverage and trust rules that keep you out of the graveyard, and the reminder that in year one your only job is to not fail.

Full transcript: https://jedbmorris.com/podcast/small-business-failure-stories-halloween

Watch on YouTube: https://www.youtube.com/watch?v=DIzF_b7xmGg

On this episode of Still Searching with Jed Morris, Marine Corps veteran Michael Johnson breaks down how he bought SpeedPro, a wide-format print and sign shop near Raleigh, with an SBA loan, then bolted on a second shop with 100% seller financing.

Michael's path was not a weekend course. It was Fallujah as an infantry NCO, restaurant floors, five years running a metal fab shop, crane and rigging operations, and a stretch as a full-time financial writer. By the time he found SpeedPro on BizBuySell, he knew his numbers cold: two years of expenses banked, not two years of salary, and $50,000 liquid before he let himself look. He wrote a one-page buyer profile, got a banker on the phone, and went from first conversation to a closed deal without a guru in sight.

Then the part most first-time buyers never hear. Every employee stayed. Raises and paid holidays on day one. And when the sign shop across the parking lot needed an exit, Michael structured a 100% seller-financed acquisition, a tool that works when you already own the cash flow, not when you are broke.

A buyer walks away with: how to size your runway in expenses instead of salary, why a one-page buyer profile opens doors, what day-one retention actually looks like, and when seller financing is a tool instead of a trap.

Full transcript: https://jedbmorris.com/podcast/sergeant-to-ceo-michael-johnson

Watch on YouTube: https://www.youtube.com/watch?v=k7fg94YqyF8

Connect with Michael Johnson: https://www.linkedin.com/in/keeptrading/

On this episode of Still Searching with Jed Morris, M&A financial due diligence pro Jonathan Hutchins pulls back the curtain on what actually happens between LOI and close. Jonathan is a CPA who cut his teeth in audit at EY before moving to the diligence side, and he now works deals from a $300K enterprise value all the way up to nearly $100M. His take: deal size matters less than you think. Industry drives the complexity, and the same landmines show up at every level.

Jed and Jonathan walk the fundamentals a first-time buyer has to command: revenue trend, gross profit against industry benchmarks, costs miscoded between COGS and SG&A, customer concentration, and the key man whose relationships walk out the door with him. Then the sharper edges: owner personal expenses buried across a dozen GL accounts, add-backs that are secretly marketing spend, and the purchase agreement definitions that quietly erase the value your QoE found. About 70 percent of the time the EBITDA checks out. You hire the professional for the other 30. And if you will sign for millions in personally guaranteed debt but balk at paying for a QoE, your whole philosophy of risk is skewed.

A buyer walks away with: the pre-LOI financial checks to run yourself, the red flag that ends a deal on the spot (data that contradicts management), and the three-person deal team no buyer should close without.

Full transcript: https://jedbmorris.com/podcast/ma-financial-secrets-jonathan-hutchins

Watch on YouTube: https://www.youtube.com/watch?v=wLV6wOQdmaw

Connect with Jonathan Hutchins: https://www.linkedin.com/in/jonathangh

On this episode of Still Searching with Jed Morris, quality of earnings specialist Caleb Basile breaks down the financial due diligence that kills more deals than anything else in business buying. Caleb is a CPA who left the Baker Tilly audit track to do QoE work full time, and he ran 57 of these reports last year on deals from $1M to $50M in revenue. His estimate: when a deal dies in diligence, roughly eight out of ten times it dies on the financials, not the legal.

Jed and Caleb get into the machinery most first-time buyers avoid because it feels uncomfortable: the three sections of a QoE, why reconciliations come first (and why Caleb charges half if the deal dies there), the add-backs that never pass the test, and the concentration risks hiding in QuickBooks. Then the math that ends the debate. If adjusted EBITDA comes back at $700K instead of the $1M the broker claimed, at a 4X multiple that is $1.2M you almost overpaid. A QoE is not a checkbox. It is the cheapest insurance in your deal.

A buyer walks away with: the three reconciliations to demand before anything else, the add-back tests that separate real earnings from wishful math, and a working grasp of net working capital, capex, and the cash conversion cycle.

Full transcript: https://jedbmorris.com/podcast/quality-of-earnings-caleb-basile

Watch on YouTube: https://www.youtube.com/watch?v=PE5zluwZfXk

Connect with Caleb Basile: https://www.linkedin.com/in/qoeprep

On this episode of Still Searching with Jed Morris, Jed goes solo on business purgatory: what nobody tells you about actually owning and operating the small business you buy. Not the dramatic failure stories. The quieter trap. Profitable on paper, stuck in real life. Jed has had this exact conversation 20 times in the last couple of months with buyers who did everything right and still hate the job they bought.

He walks through the frustrations searchers never price in: a workforce that cannot relate to you, geography that pins you to one city for years, professional growth that stalls out, and debt service that makes walking away impossible. Then the live Q&A gets tactical: the accidental roll-up Jed stumbled into with his own landscaping company, how to vet gurus, why a business partnership needs a prenup (it is called your operating agreement), and the hard truth that a purchase agreement is not protection, it is a platform to sue. Jed bought a business, it failed, and it wiped him out financially. This is the conversation he wishes someone had with him before he signed.

A buyer walks away with: a real test for business buyer fit, one cheap move that de-risks your industry choice (shadow an owner who already bought in it), and a sober read on SBA default risk, settlement NDAs, and what your contract can and cannot do.

Full transcript: https://jedbmorris.com/podcast/what-they-dont-tell-you-about-buying-a-business

Watch on YouTube: https://www.youtube.com/watch?v=BLHzj2G8Ln0

On this episode of Still Searching with Jed Morris, Austin business broker John Rodriguez opens the books on how brokers actually size up first-time business buyers. John is not theorizing. He grew up in his family's St. Louis restaurant group, ran it, exited in 2021, then spent 12 months as an SBA-prequalified searcher in Austin and never closed a deal. Now he sits on the other side of the table as managing broker at the Ventura Group.

The whole episode is myth demolition. The $55K general manager who runs the business while you keep your day job: John will tell you that math nets out to what dishwashers make, and to budget 150 on that line instead. No money down: reserved for buyers who share DNA with the owner, or businesses two minutes from liquidation. The safe industry: he would rather back a good owner in a tough industry than a mediocre business in a hot one. And the seller who always takes the highest bid: John has watched owners take 2.2 from a searcher they trusted over 3 from a PE group they did not.

A buyer walks away with three things: how to be the buyer a seller picks when you cannot be the highest offer, why trust beats every clause in your purchase agreement, and where to hunt when every listed deal is priced past your DSCR.

Full transcript: https://jedbmorris.com/podcast/business-broker-insights-john-rodriguez

Watch on YouTube: https://www.youtube.com/watch?v=G6yPlFWBtIo

Connect with John Rodriguez: https://www.linkedin.com/in/john-rodriguez-atx/