The Joy & Pain of Buying a Tech Business

Let's build a macro funnel. Antonio, you take care of the top of the funnel, and the top means from lead generation or deal sourcing all the way down to NDA signed, that was sort of the top of the funnel. Felipe, you take care of the bottom, which is from NDA all the way down to closing the acquisition.

Right. And so by doing that, my weaknesses were never exposed, meaning lead generation and deal sourcing and showing up to customers conferences. And Antonio's weaknesses were never exposed because he never, he never even signed an NDA or, you know, drafted an loi. And that was all by design.

Yeah, yeah, yeah, great. Well, when you describe the unifunnel as opposed to two parallel funnels and how you're each tackling the end of the funnel, that makes sense for your skills. It actually, I mean, it sounds perfectly logical and natural that it would be structured that way, but you're right.

My sense of how partnered searchers usually do it is like what you said. They try to double the quantity of deals that they look at. Might basically say, you do one funnel, I'll do another, and we'll, you know, and we'll, and we'll double the size of universe that we're going after, as opposed to instead trying to optimize to have the, the most effective funnel possible.

But, but a single funnel, maybe it. Works for some people.

It, I'm sure it works. Two funnels isn't necessarily better than one, one is not necessarily better than two, but hence why it's so important to keep track of KPIs. Right. And sometimes people will over index certain tasks in their funnel that are really not yielding much in terms of KPIs.

But if you're not measuring, it becomes really hard to just improve and figure out, you know, how to do things better. Because funnels and the sourcing engine are not set. And forget from day one, it took us about four months of AB testing and tweaking things before we got to a point where, where we were like, okay, this is actually decent.

We can run the rest of the search with what we have today. What are the KPIs, the wrong headed KPIs you've seen in searcher funnels and what are the correct KPIs, I mean. Hard to label a KPI as incorrect.

I would say response rate is over indexed just because it's the KPI that all investors know, even the non searcher investors, meaning those who never searched. So it's easy to try to coach people based on response rate, but you can get a very high response rate of uninterested sellers. I got a 40% response rate and 99% of those are no thank you.

So what's the point? For me, the most important KPI in search in a search funnel is the quality of leads. And the way we calculated that was number of NDAs signed divided by number of intro calls had.

Right. So for us that number was around 20%. So for every 10 intro calls that we had, we signed 20ndAs. Two NDAs. Sorry. And that's important because it's telling you how many intro calls you're having are actually interesting leads or qualified leads for you as a searcher.