Jan 16, 2024 · 39m · we-live-to-build
Carl Called Business Deadlines Nonsense. His Reasoning Is Hard to Argue
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Host Sean Weisbrot interviews M&A advisor Carl Lundberg to explore the practical dynamics of lower-mid market acquisitions, company valuations, and deal structuring, while examining the philosophical perspective that commercial business deadlines are flexible constructs compared to life's true priorities.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Sean holds 13% of the talking time here. How this is scored →
Sean as informed peer 2.5 Guest teaching 3.2 Guest disagreement 0.3 Sean pushing back 0.2
speaking balance: gold is Sean, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 38:20 Carl dismisses corporate deadline rigidity as nonsense
Carl rejects standard corporate adherence to deadlines, arguing that non-medical businesses do not operate in casualty wards and that missed deadlines are normal and manageable.
Hardest push from Sean ▶ 29:05 Sean challenges exit strategists' aversion to pre-sale optimizationSean strongly pushes back against advisors who claim increasing company value before a sale is cheating, arguing it directly enhances performance and owner returns.
Biggest teaching moment ▶ 22:14 Carl explains enterprise value bridge and surplus asset adjustmentsCarl walks Sean through the precise mechanics of converting enterprise value to equity value by deducting debt and adding surplus non-trading company assets.
Sean holds their own ▶ 27:24 Sean highlights margin expansion upside from cutting costsSean demonstrates practical commercial understanding by deducing that a low EBITDA margin relative to revenue indicates a prime turnaround opportunity to cut costs and increase enterprise value.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Sean as informed peer | Guest teaching | Guest disagreement | Sean pushing back | Why |
|---|---|---|---|---|---|---|
| Hook: Life Lessons and Business Deadlines | 2 | 2 | 0 | 0 | Sean asks broad opening questions about life lessons and satisfying deals. Carl provides detailed context on small search fund acquisitions versus large private equity transactions. | |
| Criteria for Identifying Business Acquisition Targets | 3 | 3 | 0 | 0 | Sean cites personal conversations with founders of eight-figure businesses to ask how targets are identified. Carl outlines criteria including positive cash flow, succession needs, and unexploited growth. | |
| Three Core Sourcing Channels for M&A Deals | 3 | 4 | 0 | 0 | Sean asks if deals are found through informal old-boys networks or chamber meetings. Carl methodically details the three main sourcing pipelines: proprietary database outreach, brokers, and sell-side M&A advisors. | |
| Business Valuation Methodologies and Multiples | 3 | 4 | 0 | 0 | Sean probes how valuations are established given conflicting incentives between brokers and buyers. Carl explains discounted cash flow principles, market multiples, and when to use EBIT instead of EBITDA for capital-intensive firms. | |
| Host Call to Action: Channel Subscription | 2 | 3 | 0 | 0 | Following a mid-roll subscription appeal, Sean asks whether acquisitions ever use gross revenue multiples. Carl clarifies that revenue multiples are standard in SaaS and historically in professional services, but rare in the lower mid-market. | |
| Explaining Lower Mid-Market, EV, and MBIs | 1 | 5 | 0 | 0 | Sean asks basic foundational questions to clarify the definitions of lower mid-market, EV, and MBI. Carl provides an educational breakdown of enterprise value versus equity value, illustrating with an anecdote about a surplus vintage aircraft. | |
| EBITDA Margins and Operational Improvement Upside | 4 | 3 | 1 | 1 | Sean engages in financial calculations regarding low margins on high revenue and argues this represents cost-cutting upside. Carl corrects the math to a 4 percent EBITDA margin and nuances the analysis with industry margin models like FX trading. | |
| Maximizing Business Value Pre-Sale and Earn-Outs | 5 | 2 | 0 | 1 | Sean challenges conventional exit strategists who believe optimizing operations before a sale is gaming the system. Carl validates Sean's viewpoint, adding that sustainable earnings improvements directly boost sale value and earn-out structures. | |
| Due Diligence Readiness and Win-Win Negotiations | 2 | 4 | 0 | 0 | Sean invites Carl to discuss overlooked aspects of M&A. Carl explains sell-side timing deferrals for multiple expansion, buy-side sustainability due diligence, and the philosophy of win-win deal structures. | |
| Actionable M&A Advice: The Power of a Quick No | 1 | 3 | 0 | 0 | Sean asks for practical closing advice for buyers. Carl emphasizes search focus, maintaining deal-breaker checklists, and the market reputation value of delivering a fast no. | |
| The Malleability of the World and Business Deadlines | 1 | 2 | 2 | 0 | Sean asks Carl for his overarching life lesson. Carl challenges the rigidity of corporate deadlines, arguing that business is not an emergency room and that deadlines are often malleable nonsense. |
Statements from this episode (12)
Lundberg: Smaller M&A Deals Require More Advisory Work Than Large Ones
“Normally working on kind of smaller transactions they are, you know, you need a little bit more input. The buyers and the sellers actually need a bit more support to get the deal done. And often, you know, things tend to come up because the businesses aren't q…”
Lundberg: Search Fund Buyers Care More Than Traditional Private Equity
“This is one of the benefits of search, investing in search over investing in kind of traditional private equity is that the searcher really cares, right? Because it's their career. They've only got one shot. If you've got a fund that's going to buy 15, 20 busi…”
Lundberg: The UK Has Roughly 200 Active Search Fund Buyers
“Optimistically there's maybe. 5000 buyers out there and probably in the UK searches, maybe 200. So there's loads to pick from.”
Lundberg: UK disclosure rules exempt most small businesses from reporting revenue
“Obviously the UK kind of public accounting requirements, the public disclosure requirements mean that most small owner managed businesses don't have to report revenue, but it might be out there.”
Lundberg: Approaching off-market targets usually causes owners to shop around
“Normally if you find a company that's not on the market and you approach them, you know, you can expect that they're going to shop around before they say yes or no to you.”
Lundberg: Business brokers often set unrealistic seller valuation expectations
“It's much, much nicer on the buy side to be doing a deal with a client who's got a proper M&A sell side advisor than it is With just a broker, because the brokers, and again, not to be disparaging here, but sometimes you will find that some of the brokers set …”
Lundberg: SME Acquisitions Currently Trade At 4.5x To 5.5x Earnings
“At the moment we're seeing deals in, in, you know, the SME space of between four and a half and five and a half generally.”
Lundberg: UK professional services historically sold for 0.8x to 1.2x revenue
“Historically as well, professional services used to be sold on a revenue multiple. And there was a lot of M and A in that space in the UK at the moment in, in, you know, lawyers, financial advisors and accountants. And they used to be bought on a multiple of r…”
Lundberg: UK lower mid-market deals range from £5M to £40M EV
“Really for us, the type of deals that we see are, Between five million at the bottom end EV. And that really would be a, I think more of a bolt on play for one of these PE houses, but you know, a good platform for a search fund, for example for a self-funded s…”
Lundberg: Search deals need strong second-tier management for investor appeal
“Lots of search deals are perceived as MBI's historically. They have been. Now the more attractive ones for investors are actually where you have at least a very good tier, second tier management. So while someone may go in to run the business, there is still q…”
Lundberg: Acquirers should filter opportunities against deal-breaker criteria first
“I always say to people have a list of deal breakers and go through that first, because if you get something in front of you and it doesn't tick all of those boxes, then you can very quickly say no and move on to something else.”
Lundberg: Corporate Business Deadlines Are Usually Arbitrary Nonsense
“I think that I've seen actually, as I've kind of gained experience and worked in professional services for longer and worked with lots of different businesses over the years, the deadlines often are nonsense, right? And it's a, you know, best endeavors type si…”