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Coaching Buyers to 90 Million in Acquisitions

Walker Deibel is a longtime acquisition entrepreneur with a passion for educating aspiring brokers and helping them navigate the intricacies of the business. He is an M&A Broker for online businesses with Quiet Light, where he works virtually with a group of nine other entrepreneurs to assist online companies in a transaction.

Walker is the Founder of Acquisition Lab, a membership program that facilitates resources and tools valuable to any successful entrepreneur. He also authored Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game, which garnered praise with its release and became a crucial part of many universities.

Here’s a glimpse of what you’ll learn:

[2:22] Walker Deibel talks about his book Buy Then Build
[6:57] Walker shares his insights on the Q3 trends of 2022
[16:24] The revolutionary effect of Buy Then Build as a resource hub for business brokers
[20:06] Walker talks about Acquisition Lab and its educational value
[25:46] Different deal structures and strategies to help you close deals
[31:28] Walker shares the most desirable qualifications for people who are getting into brokering

In this episode…

Acquisition entrepreneurship is an advanced business practice that requires a certain understanding of business frameworks and models. As an upcoming or tenured broker, how can you elevate your professional experience and bridge the skill gap required to get into this business?

Decades ago, the educational resources on business acquisition techniques were limited in scope. To Walker Deibel, that only meant he had to carve his own way as a broker. His immense success as an acquisition entrepreneur sparked a mission to help educate others and led him to write Buy Then Build, a book that is now being used in many universities.

In this episode of the Quiet Light Podcast, Joe Valley welcomes guest Walker Deibel, Founder of Acquisition Lab and Author of Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game. Joe and Walker talk about business acquisition techniques, where to find valuable resources for entrepreneurs, current investment trends of 2022, and what changes to anticipate in the upcoming years.

Resources Mentioned in this episode

Sponsor for this episode

This episode is brought to you by Quiet Light, a brokerage firm that wants to help you successfully sell your online business.

There is no wrong reason for selling your business. However, there is a right time and a right way. The team of leading entrepreneurs at Quiet Light wants to help you discover the right time and strategy for selling your business. By providing trustworthy advice, effective strategies, and honest valuations, your Quiet Light advisor isn’t your every-day broker—they’re your partner and friend through every phase of the exit planning process.

If you’re new to the prospect of buying and selling, Quiet Light is here to support you. Their plethora of top-notch resources will provide everything you need to know about when and how to buy or sell an online business. Quiet Light offers high-quality videos, articles, podcasts, and guides to help you make the best decision for your online business.

Not sure what your business is really worth? No worries. Quiet Light offers a free valuation and marketplace-ready assessment on their website. That’s right—this quick, easy, and free valuation has no strings attached. Knowing the true value of your business has never been easier!

What are you waiting for? Quiet Light is offering the best experience, strategies, and advice to make your exit successful. To learn more, go to quietlight.com, email [email protected], or call 800.746.5034 today.

Episode Transcript

Intro 0:07

Hi, folks, it’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.

Joe Valley 0:32

Hey, folks, Joe valley here, welcome to another episode of the Quiet LightPodcast. This episode is entertaining, shall I say, but educational as well, we’ve got my old friend Walker Deibel. On the podcast. Walker is one of the lead advisors on the Quiet Light team. But he’s also a best selling author his book Buy Then Build has sold something like 65,000 copies. And he runs something called the Acquisition Lab, which is a program to help people buy businesses of all shapes and sizes, online, offline manufacturing, whatever it might be. And so we talk a little bit about the state of the online world and the economy and whatnot. But most of this podcast is talking about how to buy a business period, what the process is like how Walker’s helped people what you can do, what you shouldn’t do things of that nature, a little bit of stories of Walker’s background, and some awkwardly funny experiences he’s had in, I’m gonna say it in the bathroom, where people know who he is and approach him while he’s in the urinal. Please, please listen. And I didn’t hold anything back. So here we go. Great episode with author of Buy Then Build. By the way, let me just say right now, you can get a 99 cent copy of Buy Then Build this week, just go to amazon.com and get your copy. We mentioned it in the podcast as well. He’s relaunching the book, the hardcover copy of the book, but he wants to get his rankings up there. So you can get the digital version on Kindle for 99 cents. Okay, here we go. Walker dial folks. Walker Deibel. Welcome to the Quiet LightPodcast. And welcome back. I guess I should say,

Walker Deibel 2:22

Joe, it’s so good to be here. It’s been a long time since you and I have hung out one on one, especially on stage. So I’m looking forward to this.

Joe Valley 2:29

I know the pandemic has ruined our I know, folks, we’re out of the pandemic, but I’m still not traveling that much. But you and I, you know, sitting down and having our old fashions at the end of the event of a long day. It’s my favorite part. And you know how to make them. You tell the bartenders how to make them and adjust them, folks, he’s he’s actually sent them back heat. If you don’t know Walker dial, he’s one charming, MFer. And he will go back up to the bartender and actually turn them into making it his way. And it’s the best band old fashion I’ve ever had. So if you need instructions, Walker is a man of many talents and old fashions is one of them. So just hit him up at [email protected]

Walker Deibel 3:12

Joe, I’m not sure that that’s going to land well with people that makes me feel you know, like very excruciatingly specific and I’m pretty easygoing guy.

Joe Valley 3:21

Well, what else? Do you do that? Why don’t you tell these guys who you are and what you do?

Walker Deibel 3:24

Oh, gosh, this is actually the hardest question for me to answer. My daughter. My eight year old daughter recently told me that I need to quit one of my jobs, which I did. I ended up stepping back from I was an adjunct professor at the Wharton School of Business, teaching acquisition entrepreneurship, actually. And but what what do I do? I sort of think that my life is three legs of the same stool. Okay, so number one, first and foremost, I work as a broker with Quiet Light Brokerage and help online entrepreneurs exit their business. Okay. Second is, everything’s sort of Buy Then Build related, right? So I wrote this book, called Buy Then Build after I acquired seven companies, over 10 years, it was a little over 16 and a half million in revenue. I think I acquired and I wrote a book about it, and kind of was trying to wake up entrepreneurs by saying like, Look, you don’t have to start from scratch. Right? Not everybody is Steve Jobs. You know, you can you can also be, you know, one of those people that lives in like the expensive part of town that runs a company no one’s ever heard of, right, I’m from St. Louis. That’s what the situation is. And so the third leg is actually the companies that I have acquired, right and so so on the one hand Quiet Like brokerage, helping sellers, on the other hand, Buy Then Build, the Acquisition Lab, helping buyers and on the third leg is just companies that I own.

Joe Valley 4:45

It’s an awful lot and I’m with your daughter, you got to you got to make a change. And just because you can doesn’t mean you should and you’re doing you’re doing a lot man and I know Look, I know the book. It folks if you have not and especially the buyers out there in the audience that are listening. If you’re not, if you’ve not bought Buy Then Build, you need to go out and buy it because it’s a great book. It’s I don’t know how many copies sold out 50,000 100,000

Walker Deibel 5:10

i It looks like it’s gonna be about 65 By the end of the month. That’s incredible. My 1000 not 65 65

Joe Valley 5:17

No, that’s my book.

Walker Deibel 5:21

I will say, I’m just gonna insert a plug this right now. But the week that this podcast is, is being released, we’re actually selling the ebook for 99 cents. Yeah, I

Joe Valley 5:29

was gonna plug it, I was gonna plug it. So um, I have no problem with a shameless plug. If it’s going to help the audience that’s its podcast. And if honestly, if you’re if you’re hoping to buy an online business, and you can’t afford the 15,95 that the paperback costs, or what the 23-24 that the hardcover relaunch is coming, you probably shouldn’t be buying an online business, right? Just keep doing what you’re doing and focus on on on growing your wealth that way. But yes, the book, the digital version of it is going to be 99 cents for the week of September 27.

Walker Deibel 6:05

September 25, is the Sunday so the 27th right,

Joe Valley 6:08

as this podcast is airing, so how do they get to amazon.com?

Walker Deibel 6:12

Place it’s gonna be everywhere.

Joe Valley 6:14

Okay, so shameless plug but one that will help you be a better buyer. And and then of course, you’re gonna have to get the experts playbook to understand how to be a better seller as well and build more wealth. Walker.

Walker Deibel 6:29

It’s a boxset Joe,

Joe Valley 6:30

it should you and I did you and I need to do a complete read together and make it about what’s happening in the market today, right? We are three quarters into 2022. Quiet Light had a record year, you’re probably the worst guy for me to be asking this because you’ve been on a really negative run as a broker. I’m wondering if I should just edit this out right now?

Walker Deibel 6:57

No, no, cuz here’s the thing is actually if you just look at what I actually have currently under contract, I I’m actually teed up to have the best year I’ve ever had it just even as isolated as a broker. Right. So you know, it’s been a bit of a choppy year, right. And I think that I had a lot of FBA businesses under contract set to close at the end of 2021. And literally two weeks for the end of the year, they all fell apart every single one of them. And then we went into q1 with with a handful of FBA businesses trying to and they were large, right. And so the audience for that as aggregators. And so we were heading into, you know, I found myself heading into aggregator land during the choppy waters that they’ve experienced thus far. Right. And I hate to say it, but they sort of were making the same mistakes that I made, you know, back in, you know, 2014 15 16, right.

Joe Valley 7:52

They didn’t buy your book. That’s why,

Walker Deibel 7:55

unfortunately, they bought it. They just scaled incorrectly, but I shouldn’t say that they’re doing great job. They’re doing great.

Joe Valley 8:02

I say Yeah, well, obviously. Yes. So everyone had a banner year in 2021. Quiet Light folks. I think I’ve said it before we grew 85% over 2020. And if we look at 18, 19, 20, and 21, the average was 55% year over year growth. We’re not going to have that in 2023. In fact, it’s going to be down a little bit. Maybe maybe we’ll see what happens right? There’s there’s enough under the law that will match 2021 Right now, but not everything is closing because buyers are getting scared. They’re they’re seeing interest rates rise their their their trends from the businesses that did great last year are off a little bit and are you finding that that’s making buyers more skittish Walker,

Walker Deibel 8:50

I’m gonna I’m gonna disagree with you just a little bit. Okay. And that you’re you’re right. Everything you just said is right. But you’re we’re also comparing it to a time of zero interest rates and the largest, the largest m&a market in human history. Right. So when I look at all my companies right now, what I’m doing is I’m comparing 2022 to 2019. Yeah, up significantly. Right.

Joe Valley 9:12

Right. Well, you’re agreeing with me, then you’re not disagreeing with me? Yeah.

Walker Deibel 9:16

Well, the thing is, is like I think sentiment is really sort of off out there. But the thing is, is that everyone’s still there’s still more cash in in American hands than ever before. They’ve got people on tons of money right now. Yeah. Yes, the the interest rate thing, has some people spooked, but I think that, that the other sort of big trend that’s been happening is that through COVID, you’ve got a lot of people that are shaking up their life, they’re like, wait a minute, what was I doing? Like, I don’t necessarily want to go back to work. I don’t necessarily want it you know, and they start to learn about things like, you know, maybe passive income or, or, you know, buying a small business or probably the most favorable buying an online business that they can run And from home, right? We had a

Joe Valley 10:02

Right, but buyers are still looking at the year over year trends. That’s part of the challenge, right? I’m in your camp 100%. If if, if Quiet Light looks at 2022 and compares it to 2020, we’re still up. Right? It was just 2021. That was just an incredible. Yeah, record shattering year. How do you think we can educate the buyers to look at it from that Periscope as opposed to just looking at the year over year trends?

Walker Deibel 10:33

It’s gonna depend on the business, I think. Do you have thoughts on this? I mean, you’re asking me that question. But I’m like,

Joe Valley 10:41

I think it’s one on one conversation. I think I think that’s what it is. You just have to have one on one conversations and a little bit more of this. Let’s take a look at the bigger picture. I’m somewhat hopeful that in q1 of 2023, we’ll start to see some normalization, right? It may still be off a little bit. But hopefully, q1 of 2023 is going to be you know, similar to q1 of 2022. So we’re not comparing it to 21 anymore. And buyers will be like, Oh, okay, this guy is actually not falling. Things are okay. I can take a risk on this business, because it is technically still growing. Right? I think the fears will be subsided a little bit, they’re not that it’s bad, right? Again, if we compare most businesses that are operating today to 2020, instead of 2021. They’re there. They’re doing well.

Walker Deibel 11:34

Yeah. And we’re also speaking kind of macro like, like, I think that, um, I think that number one, everyone understands 2021 was a bit of an anomaly, right? Yes,

Joe Valley 11:43

but not when they’re stroking a check for 500,000, 1,000,000, 2 million, $10 million. They still get skittish, when they find a reason. They find a reason to renegotiate. That doesn’t have logic associated with it. Your numbers are down, your numbers are down look. But of course, they’re down. It was a banner year for everyone. So you have to you have to fight that logic somehow. Even though it’s a logic I guess it’s frustrating. Keep going I’ll shut up

Walker Deibel 12:07

Well, no, but I guess the thing is, is like it seems like this is really nuanced, Joe, but But what I’m seeing is that sellers were getting the sort of best prices, better prices than ever, but then the 16 year history, right in Quiet Light history. And so sellers were getting like the top price and every listing that we were putting out there, we were getting multiple offers and logic was gone a little bit and so like valuation started getting pushed north. Okay, it got a little frothy. Okay, I’ll just throw that out there.

Joe Valley 12:39

Well, now hold on. Now, I’m going to disagree with you just a little bit. Okay. Okay. You remember the last valuation roundtable call we had with the entire team, we do this on a monthly basis, folks, and we have this deal dashboard. multiples are up slightly, compared to 2021. Now, caveat is that, you know, it’s all, you know, a median thing. So when we look at some specific things they might be down. I think they are going to come down. I don’t think they’ve come down yet the walker. And I haven’t looked since our last call. And I hear yes, I could look now and maybe I’m talking about inside of my mouth, but slightly up, right. It’s not really like up. But I think you’re right, I think they are going to have to come down a little bit and be a little less frothy, we’re still getting multiple order offers, per transaction. I think it’s still like 3.5 or 3.6 offers per listing. The challenge is sometimes those listings once they’re under under loi and other month passes, and the trends go down. It’s not worth as much as it was, you know, when it went under LOI. And that’s, I’m hoping in q1 of 2023 We’ll start start to see less of that downward trend.

Walker Deibel 13:52

Yeah, I’m the the, the twist here is that you just said exactly what I was gonna say.

Joe Valley 14:01

You disagree with me, I said, we’re saying the same that I disagreed with you.

Walker Deibel 14:06

thing was that buyers were stressed out buyers weren’t actually paying enough buyers were wanting to renegotiate where I was gonna go with that was actually we’re seeing deals getting done. It’s just not there’s not as many offers coming in. It’s making everyone a little crazy. Right. So I think that and I also want to dig into some of some of that data a little bit because my view is that it’s probably going to be guaranteed payments have come up a little bit and I think probably the deferred payments and the sort of like the keeping that on guarantee portion of the valuation that’s kind of getting eliminated or cut down is my guess but I don’t I don’t have the good data there. Do you mean

Joe Valley 14:43

the cash so what you’re saying is that the deal structures might the multiples might be about the same but the the cash amount down might have gone down and the back end money might be a little higher. Overall keeping the multiple lot. Yeah, yeah, a little bit, a little bit of that happening. It’d be interesting to see what how As we go forward, let’s, let’s shift gears a little bit, because I totally put you on the spot there. Talk to me talk to the audience free,

Walker Deibel 15:08

we just think we disagree. I know.

Joe Valley 15:10

The key thing is that both of us have big messy hair right now, yours worse than mine, and we’re both wearing black shirts, you pull yours off a little bit better than I do. And that’s for you folks that are not, you know, taking the time to watch us. And you’re just listening to us. Talk to me about what you’ve been doing. Since you launched the book, it has been a huge success. And then you launched the acquisition lab, you being smarter, better looking than I am, you actually had a back end to the to the book launch that would help more people and actually generate some revenue. Not necessarily profit. Yeah.

Walker Deibel 15:46

I mean, the truth is, is it was it was somewhat deliberate, but totally also accidental, right? Like, I feel a little bit like, like, like the, you know, like, like, I think there’s a term like the, like, the hesitant protagonist or whatever. But here’s the deal. In 2004, I went out and tried to, you know, I was a graduate with my MBA, my startup failed, and I was like, I know, there’s a way that I can acquire, you know, one of these small businesses, right? And, you know, people I was talking to thought I was a little nuts are like, in there, like, how are you gonna pay for this yummy money? And I’m like, no, like, I’m gonna go to the bank, like, I’m gonna buy it, like, you know, with a bank loan.

Joe Valley 16:20

And they’re like, You can’t do that. Well, you look like you were 12 years old to at the time.

Walker Deibel 16:24

Yeah, exactly. Yeah, that was I’m gonna crush it in the in the old folks home, Joe, I’m looking forward to those days. But it’s one of these where eventually sort of got it done. And there was no good books at that time. There was no good resources at that time. And what I found was that number one, you know, business brokers in 2004, Quiet Light didn’t exist. Business Brokers, by and large are quite terrible. Okay. There’s, it’s unregulated. There’s no formal regulation, there’s no best practices, and it’s kind of opaque and fragmented. And the data seems subjective. And it’s, it’s a tough business, right? And so, you know, eventually I figured it out. And I started to write by them build by interviewing other people that bought companies. And what I found what and I just want to, like, come up with best practices. And what I found was, everyone I interviewed was saying, like, well, you, I’d say, like, what do you what were you looking for? And they’re like, Oh, I was just looking for whatever one was looking for I was looking for. And then they would say something that differed from everybody else. Right. And so I was like, how do I make sense of this? And I decided it wasn’t best practices. It was frameworks, right? So I wrote by them built in the effort of, you know, writing kind of the book, around navigating the private capital markets as a wannabe small business owner, right? What came of that? You know, speaking, I got job offers to teach MBA programs. You know, this, I go to a conference, I went to a conference, Joe, and I was in the men’s room. And this guy came up to me and said, Are you Walker Deibel?

Joe Valley 18:06

This is this is a PG show, just not sure where to go?

Walker Deibel 18:11

And I said, Well, it’s Deibel. But yes, I am. And he said, Oh, my God, I’m here because of you. And I said, Well, right now I’m peeing in the bathroom. At the event, I’m at the urinal, right? You know, I’m like, right on, I’m peeing. Let me start off with you in a minute when I’m washing my hands or whatever. So anyway, the point is, is people started coming to me saying, like, Hey, can you can you help me find and buy a business? And I was like, No, No way, I’m not doing that. Number one, you know, people that do that they charge $125,000 usually is a minimum, or there’s like a, you know, a $5,000 monthly retainer with a double Lehman success formula or something like that, you end up paying, you know, six figures in order to do it. And the thing is, is I was like, You’re gonna pay me a lot of money. It’s, I have to charge you, I don’t know if you’re going to do it, right, all these other things. And so I said, Okay, how do I how do I sort of unpack this? And if I did just write the textbook, what does the what does the class look like? Okay, let me pause for a minute. I now want to explain what became the acquisition lifecycle or do we have questions?

Joe Valley 19:17

I’m still stuck on this guy walking up to you in the urinal looking over and saying are you Walker diable it first of all, I straight eyes down folks.

Walker Deibel 19:29

That’s what I knew I was famous.

Joe Valley 19:34

Was there a divider between the two urinals just for clarification? I

Walker Deibel 19:38

don’t remember. I assume so. In my mind, there probably was yeah, it was

Joe Valley 19:44

okay. I’ll stop I’ll stop all right. Yeah, yeah, no questions. Tell us was

Walker Deibel 19:48

it it wasn’t full display. So I’m gonna go with Yes. I’m gonna go with the

Joe Valley 19:51

full exploit exposure or display. Alright, anyways. So, yeah, the lab. What did you What did you do? read it because I honestly, I know all about the acquisition lead, but I actually know nothing about it and what yeah, do for folks?

Walker Deibel 20:06

Yeah, sure. So basically, I said, Okay, what what, you know, what would the first you know, do it with you by sight advisory service look like? Okay. And I started came up with number one the foundation and anchor would be not just in education but world class education. Okay. And I wanted to dig into what that what how you built that and, you know, bring in the right people to help me execute on that number two, a vetted community. So the acquisition lab is not a mastermind, where, you know, if you want to pay us money just to join in and get in, the answer’s no, we actually have an application and vetting process, when we started, we only let in about 12% of applicants, it’s now up to about 25%. I think that’s just because of our referrals, right from people that go through it. So three out of four people that apply and want to give us money, we don’t let them in. And it is created this kind of lynched I’ll just use the word legitimate community, right? It’s not like a big Facebook group with 1000 people in it and one person actually executed, they’re like, I did it, I did it, you can do it, and everyone else is wasting your time. It’s a lot of competent people who can be CEOs who have the ability to execute they’re in the group.

Joe Valley 21:20

So what do they get when they it’s not like just joining a mastermind they apply and 25% get in, you actually have cohorts where you do lots of education training, to help people buy businesses? Yes, yeah.

Walker Deibel 21:32

So it’s, it’s world class education, bedded community, group coaching and tools and resources. Okay. So when you, when we launch it, we have cohorts of a maximum of 23 people per cohort, okay. And we’re not launching one a month, but I guess we could, okay. And so that cohort goes through the intensive that lasts a month, okay. And the intensive is a lot of work. Okay. But in my opinion, if we’re all going to be hanging out looking for businesses together, I need to get you up to speed with how we think about things, our language, our tools, our analysis tools, our evaluation tools, our modeling tools, all of those things. You know, so it’s, it’s service provider networks, it’s all of the, you know, models and everything you need. We also subscribe on we I spent 1000s of dollars a month, subscribing to tools that that these searchers can use to compare different industries. This is this is not online specific.

Joe Valley 22:33

Yeah, it’s just gonna ask, right? It’s not right. It could be any industry.

Walker Deibel 22:37

That’s right. We’ve had people buy manufacturing, home service companies, home health care online businesses, content sites,

Joe Valley 22:44

kind of makes sense. Because you have not always owned just online businesses yourself. The first one you bought was, wasn’t it? It was a company company. Yeah. But right

Walker Deibel 22:53

now I own a aluminum fabrication company and a powder coating facility.

Joe Valley 22:57

Your daughter’s right, you do too much. Yeah. And

Walker Deibel 23:01

then I also have my e-commerce site. And then I’ve got a content site as well stop re e-commerce sites stop,

Joe Valley 23:08

you could shatter all records at Quiet Light if you just stopped doing. And actually, you’d make me more money too. So please stop.

Walker Deibel 23:19

So, you know, the concept was I want I want to build something that that applies to every person that wants to buy a small business. When I say that, we’ve done, we’ve done deals in the lab where we’ve almost closed on like north of $25 million deals, but like, most of the deals are somewhere between one and 5 million. Right. And so in the last 18 months, I think we’ve just closed on the 50th transaction of lab numbers. And I think we just exceeded 90 million in transactional value. Don’t hold me to that. But because we need to formalize the numbers, but that’s what it’s looking like,

Joe Valley 23:52

that’s pretty solid. So 90 million divided by an average worth 3 million bucks or something like that, is that we looking at, you know, a 30% success rate of the people that go through the lab or like how do you measure that kindness? Yeah, making sure they’re getting? So when I turn on their investment?

Walker Deibel 24:09

Yeah, when I did research, when writing by them build, I found I found out I discovered that about 10% of people that start looking for business to buy actually close, which is very similar, by the way to people who start a business who actually end up with with a business, right. And so it resonates with what we know about these things. And the lab using 2021 numbers, I’ll tell you, we let in 150 applicants and we closed just under 35 transaction, but 60 million. Yeah.

Joe Valley 24:39

And just because they didn’t close one and 2021 They’ve got that education, they’ve got the tools, they’re gonna, you know, think if they keep hunting, they’ll find one eventually. Well, I

Walker Deibel 24:48

mean, you know, yeah, we probably let in, you know, 60 people in q4 2021. So I mean, you know, we’re giving them days that’s wrong. I mean, here’s the thing, Joe, is that when I wrote by then build I almost didn’t publish it because I was like, you know, people are gonna read this and you’re gonna go and buy a business and then they’re gonna like screw it up or something, right? And then blame me for it right. And I was like, I don’t know that I want that on my conscious. But it’s not any different than writing a book saying quit your job and go start a business. Like, that’s crazy. If you really think about it, right? Like this is a much more measured approach. The hard part is that people have to get around the fact that if you’re a real player, and it’s your first time doing it, you really need to get comfortable with the fact that you’re taking a personal guarantee on a bunch of cash in order to acquire a business usual, That’s most people’s situation. Go ahead.

Joe Valley 25:35

We taken a personal guarantee on a bunch of cash, we talked about the buyer, taking a

Walker Deibel 25:40

personal guarantee or the seller, the buyer, so like an SBA loan, for example. Right. Okay. Okay.

Joe Valley 25:46

Talk to me about deal structures, like what are you seeing? Like, what, what’s your, what’s your take and vibe and feel inside the lab for, you know, buy a business with no money down? Use $500 of your own money and buy a business?

Walker Deibel 26:04

Yeah, I think that, um, look, I bought a business with, you know, no money out of pocket and all that stuff. There’s no version of reality that I’m going to start a coaching program teaching first time buyers how to do that. It’s completely unrealistic. Then the number one job career path that MBAs at Harvard Business School want right now is independent sponsor, which means a funless sponsor that basically buys companies with none of their own money. And yeah, and that’s sort of an elevated version of five business with no money down. But the thing is, is like, that’s doable. But number one, your bottom feeding. Number two, it’s, it’s pretty advanced. And like when you have a resume that is sort of empty with business acquisitions, people aren’t eager. But this is what I do. When people ask me this question. I’m usually in a situation where I’m on stage, and there’s a bunch of people, and I say, raise your hands, if you are willing to lend 100% of your exit value of your business, to someone who’s never bought a business before. nobody raises their hands. nobody raises their hand, it’s the number one most valuable thing people have. Why on earth? Would they give it away to somebody and say, Hey, I got you, there’s no, you’re looking for people in tight situations, completely off market, you’re leveraging the fact that they don’t understand the private capital markets, and you’re taking advantage of them. I’m gonna, I mean, that’s pretty aggressive there.

Joe Valley 27:27

And I mean, the business is on shaky ground if they’re selling it that way. 100% leverage data and

Walker Deibel 27:34

emergency someone I

Joe Valley 27:36

you know, I had a, I had a listing at SBA listing at one point, and I had two Harvard MBA grads, literally, like they graduated a month ago. Yeah. And one of them. His dad was his sponsor, right, he was gonna go ahead and supply that the money down, they got denied from the SBA, because the SBA said, You guys have no business experience, just because you have your MBA, you don’t have any real life experience. Sorry, we’re not risking that I think it was a $2 million deal. We’re not doing this with you, and we ended up selling it to somebody else. So if the SBA is not willing to risk, you know, their money, or the banks, you know, SBA backed money, why in the world would a seller, you know, again, like you said, unless there was a high risk situation.

Walker Deibel 28:25

And since we’re on the topic of the lab, I will also say that during the intensive during the interview process, and the intensive, we do a pretty good job making sure that that doesn’t happen to our members, we’ve had one out of just north of 300 members that that ended up having to got past the goalie,

Joe Valley 28:41

meaning they ended up they couldn’t

Walker Deibel 28:43

get the SBA loan to close on the business day, I don’t know if it was them, or the or the business, I’m not exactly sure what happened, but the lender,

Joe Valley 28:51

so you’re getting them pre qualified as part of your, your lab process before you take their money, you’re making sure they’re pre qualified,

Walker Deibel 28:58

we make sure they’re pre qualifiable. And then they’re definitely pre qualified by the end of the first month

Joe Valley 29:03

with, okay, who’s your go to person for that? Or do you just go to a variety of different folks,

Walker Deibel 29:07

so I’m, part of what we celebrate at the lab is choice. But our very good friend, Steven spirity, calm lending, comes in and teaches a session during the intensive about SBA lending and the actual fundamentals of how it works. And so their team will also prequalify everybody in the lab,

Joe Valley 29:29

does he do lending that’s not e-commerce related to somebody’s buying a manufacturing business to see somebody that will lend money or do you generally go to somebody else?

Walker Deibel 29:36

No, thank you. He actually does that. Did you know that?

Joe Valley 29:39

I didn’t, yeah, no, he

Walker Deibel 29:40

does. That’s actually why I reached out to him at the beginning I was put all together because the thing is, is he’s called econ lending and that’s really where he you know, we’re sort of stands out and is made a market but the truth is, is that all of his lenders if you if you look at his business model, you know, he’s got whatever a bench of 12 lenders at all times and they all have different baskets and he blending with the online businesses is filling one of the baskets of all of his current lenders. But all of those lenders have other baskets they’re trying to fill. And so, um, yes, they absolutely will, will fund, not online based businesses. I mean, the other thing is like, I mean, a lot of people, a lot of, you know, a lot of people that sort of, we’ll call it self funded searching, right, usually come through, you know, acquisition entrepreneurship through the search fund framework, okay. And in a lot of the people that come from that direction, usually will know of, you know, Live Oak Bank or, you know, Bruce marks and other people, active very good guy in the in the community. And so, I mean, obviously, you know, you get exposure to all those people in the lab, but, you know, yes, we

Joe Valley 30:47

do have favorites. Is it realistic for somebody to come out of college, their MBA and join the lab to get the experience? Or is that? Would you decline them? Because they have no experience? And they’re not going to get? It depends,

Walker Deibel 31:02

right? It depends is the answer. And I think that like, um, you’re talking right out of undergrad, you know,

Joe Valley 31:11

what I know, I guess it’d be grad school, I guess it could be either. But like, if you want to, you know, get pre approved or pre qualified join the lab by a $2 million business. But you’ve never had anything but a job? I know, it’s doable, because I’ve sold lots of businesses that way. Yeah. Like, what’s the what’s like, the magic recipe for somebody that wants to go off? And on their own? How much how much business experience? Do you feel like they should have in general, as somebody who just doesn’t want them to fail? Of course, I

Walker Deibel 31:42

think it’s different Joe, right. Like, like, I think it’s, I think it’s, it’s going to be mindset, it’s going to be drive, it’s going to be understanding the business model. When you understand the business model. It’s really easy to take that leap of faith. And I feel like, so many of us have spent so many time with buyers that just like second guess themselves, like, they’re not confident like they’re looking, they’re trying to de risk and acquisition. And it’s like, look, the magic is not in the derisking of the acquisition, right? The magic is in what do you bring to the table as the CEO? And how are you going to not only buy, but then build right on on the on the platform that you just that you just acquired? Right? So it’s all about what does this person bring to the table? I’ll share with you, when I started teaching MBA classes, I had to completely change all my curriculum, because, you know, I’d hired a curriculum designer who does, you know, accredited programs and certification programs, and she helped me build out the original curriculum for the acquisition lab. And then I then I was like, Oh, I got all this, like dope content. I’m just going to try it in this in this university setting. And there was a gap. And more than ever, I understood the demand, or the I should say, the pain that has resulted in search funds, okay. And in my opinion, search funds, sure, mid career people can go out and like start a search fund, but that is not, you know, the A one use. So for people who don’t understand a search fund, it’s a to a traditional search fund, I’ll say, it’s a two raise situation where you do the first raise, to raise 24 months of just living expenses that you can search and find that business, then you do a second raise once you get the business under LOI. But no, Joe, how many times would you put a company under loi without proof of funds? But anyway, okay, so you now you’re going to do a second raise, okay, in order to raise the money to acquire the business, including the debt and that first, that first money gets a step up? When I was speaking with MBA students, they were like, look, you know, one of the questions we asked it, they’ll have is, but to get in the application process is just do you have access to $100,000? And that question, right there knocks out half the people we’re talking to, like, I can’t sell some I cannot help you. If you can’t answer that question. I’m not asking even if you have it. I’m simply asking do you have access to it? Can you get it? Are you smart enough? Are you nimble enough? Are you scrappy enough to get $100,000? I don’t know. Encourage them to answer it that way. But that’s what I’m asking. And if they can’t find $100,000, I can’t find them 5 million, or 1 million. Like I can’t do that, right? They’re not going to succeed. The point is, is the MBA students, we’re all like, Walker, this is great. I’m accumulating massive debt sitting here in this chair right now listening to you speak, right for God for college credit. Like, how do I get, you know, that $10 million or $15 million to actually buy this company? And the clear answer was search funds because there’s investors out there that are funding, you know, these these recent MBA graduates in the right situations, and again, they’re not looking at business experience. They’re looking at you know, do you have the chutzpah? Do you have the mistake one to actually be a CEO.

Joe Valley 35:02

Yeah. And and to think that you actually have to have the business experience is a little narrow minded. And I’m saying that about myself. I’m interviewing somebody in a couple of weeks that, you know, started her business at 19 years old. She sold it at 29. And now doesn’t have to work for the rest of her life. So, you know, we all do different things at different stages in life. Think

Walker Deibel 35:23

Mark Zuckerberg did something like that, too. No, he went.

Joe Valley 35:28

He went to Harvard. He, he didn’t graduate, though, did he? Yeah, but but he’s a he’s a, he’s he’s cookie, Mark Zuckerberg. Whatever it is, former President Trump called him last week and interview. We’re not talking politics here, folks. But really, if anybody is watching this, or listening to it, please go on to YouTube at about the 44 and a half minute mark, and just look at Walker’s hair, it’s sticking straight out. of bed every day. So it’s interesting, you know, I have conversations with somebody earlier today about thinking like an owner and an entrepreneur and not an employee. Because you can’t do it. We’re not we’re not in the corporate world, your people, some of your people must come from the corporate world. And think about the, you know, arm’s distance, corporate world thing here. We are both by all measures, incredibly successful yet here I am making fun of your hair. And we’re wearing black T shirts and jeans and I got sneakers on you probably due to it. We’re very informal. How do you how do you knock the formality out of somebody that’s been a C suite executive at a fortune 100 company and joins the lab, how do you tell them to calm that shit down? I don’t

Walker Deibel 36:51

need to Joe because the thing is, is like, you know, look, yes, I own a manufacturing facility. But But like, I’m very much an online entrepreneur as you are, right? I mean, I run a coaching program online, I run, you know, I’ve got an e-commerce business, I’ve got a content. I mean, you know, I broke I broke or, you know, online businesses, like, like, I resonate as an online entrepreneur. But, you know, if you’re gonna buy, you know, a home health care company, that has, you know, five managers and, you know, at part time, you know, pseudo nurses, you know, your, your, my lack of knowledge, you know, sometimes our nurses sometimes they’re not at the point, but but you need to have management skills and at a level that you and I don’t put into practice right now, right?

Joe Valley 37:36

Or could I, you know, that’s, that’s my biggest weakness. That’s why we that’s why we have this wonderful, you know, the independent company here Quiet Light, you know, you never need to be managed.

Walker Deibel 37:47

first company I bought had a president and accounting manager, a production manager, a pre press department had a press department had a binary manager, an HR, HR manager, that’s like seven. And then I had 45 employees to shifts 50,000 square feet. I wore, I mean, I didn’t wear a tie. But I wear a button down and either slacks or khakis every single day for seven years and like ran the company

Joe Valley 38:13

just to play that role.

Walker Deibel 38:16

Right when buying online based business in 2006. Yeah, of course, SBA was still trying to bid the SBA was not backing these loans. So I had to find a business that had so I became like a raving fan of Quiet Light, like pre 2010. In fact, I remember sitting in that office, my button down shirt, looking at the Quiet Light website, right and being like, how do I acquire one of these? Right? Because he was like, I couldn’t use bank financing at that time. That all changed in 2018 January 1.

Joe Valley 38:44

So it’s, here’s a here’s how he acquired one folks. He was on a call with me looking at a particular business that somebody else bought, right? But Walker was kind professional, memorable, likeable, it maybe he didn’t have two nickels to rub together at the time, I don’t know. But he made an impression and this is I one of the day how to buy a business with when you don’t have all cash or to beat somebody with all cash. And it’s being a nice guy. And that’s exactly what happened. And so then mark sent a note out to me and Jason and Amanda because we were the team at the time was like Hey, I got this really private seller that does not want to list the business and they need just the right kind of buyer you got anybody Walker Deibel and that got you into this online world you bought something quite late you running all sorts of different companies now and and you’re part of the team I still again with your daughter, a Greg get rid of everything else and just do this, but that’s not going to happen.

Walker Deibel 39:46

We’re working on it. One thing, one thing at a time, I

Joe Valley 39:49

know but you’re you’re launching the hardcover copy of your book now the buy them build I was going to call it the acquisition lab. It’s not it’s by them build. You’re still racing in some Be different positive directions and helping so many different people. So it’s a good thing. I make fun of you. I just want you to selfishly focus on one thing for me. And for your daughter. That’s all I care about. Just me and her. And I know you’ve got more than one daughter, you got three kids, right? You got three.

Walker Deibel 40:13

Yeah, and a dog

Joe Valley 40:15

and a dog. I don’t care. And a wife of course, let’s have Walker, we’re running. We could talk for another hour, but people are probably sick of listening to us. Folks, if you’ve not bought by then build please do this week. It’s 99 cents. If you can’t afford that send Walker an email, I’m sure he’ll send you 99 cents. I’ll split the difference with him. Thank you, if you if you the audibles done incredibly well by an incredible voice. It’s not Walker’s it’s not mine. It’s somebody that actually does it for a living. And the hardcover book will last forever. So pick it up, get a copy of Biden bill do today. Let’s make him let’s make him a New York Times bestselling author. Let’s let’s make that the goal. Can we do that?

Walker Deibel 41:01

That’s a stretch. That’s a stretch. If like New York Times is sort of like trying to get your film into Sundance, it’s very hard to predict because it’s too random.

Joe Valley 41:09

Yeah. And he’s a film producer to folks, but we won’t go there as well. He’s multitasking, multi multi talented multi multitasking at all times. I don’t know how the hell you do it. Anyway, folks. look him up. Walker. dyeable. He’s on the quite low website. He’s on by then Bill. He’s on the acquisition ladies all over the place. Send them a note. Look for him in bathroom stalls any.

Walker Deibel 41:32

Please walk away from the just Pro tip. Pro tip.

Joe Valley 41:39

Just the tip. No. Okay, we’re not going there. All right, Walker. Thank you for coming on the Quiet Light podcast. Once again. Let’s end this before we say anything we truly regret. Thank you.

Outro 41:50

Today’s podcast was produced by Rise25 And the Quiet Light content team. If you have a suggestion for a future podcast, subject or guest, email us at [email protected]. Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram, and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.