2020 has been constant reminder that SMB M&A is hard. Had 2 nasty busted deals over the summer...#1: industry focused test prep company, under LOI pre-covid, amazing FCF economics, reasonable price/terms, growing industry tailwinds...

But sales went to zero during quarantine, lender walked, we renegotiated w/ seller to satisfy lender -- 3 months later (a few weeks before closing), business had recovered and seller made a huge cash distribution to herself from PPP + summer recovery. She walked. Dead deal.

#2: specialty landscaping product installer, slight revenue decline during covid but signed LOI just after quarantine. Problem: never met seller in person b/c of covid. 100% of communication was phone/zoom/email...

While negotiating deal docs, lawyers got (over) involved, some misunderstandings about selling SMBs "as is" (no R&Ws) and didn't have relationship to recover. Dead deal.

All the normal micro PE / search fund materials make SMB M&A seem straightforward, even formulaic. It's not. Especially w/ covid's impact on deal process dynamics. Patience/persistence/creativity are table stakes (BTW we finally closed on 1st business of 2020 last week...)