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- Mastering Micro-Acquisitions
Hey there! 👋
So, you’re diving into the world of micro private equity, and you’ve got your sights set on businesses under $25K. That’s exciting! But let’s be real—many investors trip up during the due diligence phase.🕵
It’s not that the deals are bad; it’s often just a matter of not knowing what to verify or how to do it. ✅
To avoid these pitfalls, let's break down a three-step process to ensure your micro-acquisitions are sound.💰
Let’s explore! 👀
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🔨Step 1: Nail Down the Non-Negotiables
First things first, you need to get your hands on some key information. Here’s what I like to call the non-negotiables:
🧾Proof, Proof, and More Proof: Demand access to crucial data points like revenue (Stripe, Gumroad), traffic (Google Analytics), and user metrics (Firebase, App Store).
📊Own Your Data: Don't settle for a screen share. Insist on direct email access to truly understand the business.
📂Domain Dominance: Verify domain ownership and ensure you have full control.
🌱Step 2: Assess the Growth Potential
Alright, now that you've got the basics covered, let's dive into the growth indicators:
✉️Email List Quality: Take a close look at their email list - are people actually engaging with it?
📱Social Account Health: Scrutinize their social media profiles - follower counts and engagement rates can tell you a lot.
📢Ad Account History: Review their past advertising performance. How have they been spending their budget, and what kind of results have they seen?
📞Customer Support: Reach out and see how responsive they are. Good customer support can be a real game-changer.
💡Pro Tip: Sure, solid revenue is great, but make sure to find out how long that revenue has been consistent. Longevity matters, my friends!
What's a common integration challenge in micro-acquisitions? |
🪽Step 3. The Devil's in the Details
This is where the real magic happens - digging into the nitty-gritty details:
📑API Documentation: Make sure their APIs are well-documented and still supported. You don't want any surprises there.
🏗️Database Structure: Understand how their data is organized and accessed. This can reveal a lot about the technical foundation.
⚙️Service Dependencies: Identify any third-party services they rely on. Are they stable and reliable?
💳Technical Debt Assessment: Look for any existing technical issues that could come back to haunt you later on.
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💪🏻The Power of Data-Driven Decisions
Armed with this knowledge, you can make informed decisions and avoid costly mistakes. Remember, a thorough due diligence process is the key to unlocking the full potential of micro-acquisitions.
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It has been a pleasure! I will see you next week. Until then, Stay motivated! Stay strong! Cheers!
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