At Ellery Partners, we are attempting to find one small business that we can acquire. However, before we can find that needle in a haystack, we have to actually build the haystack ourselves. Our team develops the haystack through different methods: proprietary outreach and broker inflow.
The end goal of our analysis of deals generated through these two channels is the same. Namely, we want to determine if an individual business is compatible with our model. However, the way to make that determination is very different depending on the channel. With broker inflow, it is more of a science. Proprietary outreach, on the other hand, is more of art.
For broker inflow, a broker will send us a teaser for a business that has recently been listed for sale. On that teaser, the businesses’ pertinent information, such as their revenue and employee size, is clearly detailed. As such, we simply have to read through the teaser and assess whether we have any interest in the business. All of the information is there; we merely need to analyze it.
Proprietary outreach, however, is very different. A company, of course, certainly will not list their revenue on their website. Sometimes, it’s even hard to decipher what exactly it is that the company does. Instead, you find yourself scouring through the company’s website, looking at Facebook pictures of their 2018 end of year luncheon or stumbling across their Chamber of Commerce profile in an all out fact finding mission. With proprietary outreach, you will never get the answers to your questions until you get on the phone with an owner. With that said, with the Internet at your disposal, it’s always possible to come up with educated guesses!