A second buy-side QoE on the same deal. Nine material risks the first provider missed — each one large enough to bankrupt the buyer. Below the surface of every “simple business” is the iceberg that sinks the ship.
Elliott Holland · The $4M Mistake Most Business Buyers Make
“It’s a simple HVAC business. Bank statements look fine. I don’t really need a full QoE.”
Confirmation bias dressed up as due diligence. ‘Simple’ is what every first-time searcher tells themselves before signing personal guarantees on someone else’s lies.
On a $4M deal, the seller just bought himself a QoE provider who can’t say no. Half the fee in exchange for a writeup that calls every iceberg an ice cube.
20 years of mystery inventory gets booked as current and good. Cost of goods sold becomes fiction, gross margin is overstated, and you can’t tell whether 40% or 60% of any project was raw material. The hull leaks the moment you take the helm.
The day after close, that ‘other’ entity pivots into your end-market. Your non-compete protects exactly what was carved out. You sue in his home county, in front of judges he voted for. You bought $4M of revenue he’s now competing for.
If you’ve made it this far, you already know the answer.