The Entrepreneur Awakens: Pivoting from Tech to Ownership

And aside from the price, I think through the process of going through these options helped flush out other important factors that they're thinking about a buy of Lison. Right. Price, obviously, is always the. Almost always the most important factor for lots of the sellers.

Right. I think there's the other parts where they almost like interview to me as a potential new owner of Lights on how I approach things my style and when I will be able to handle the team and the clients gracefully after the transition. Right. I think through that process, I was able to show some of that to make them feel at ease, that, hey, this is not just like a transactional thing. They…

I think lots of the clients still have good relationship with the sellers. So I think those are also important factors that could compensate the fact that my offer wasn't up to what they were looking at the first place.

Okay, great. That was very. That was great. And so what did they. What were the terms that you all arrived at?

Yeah. So the L that we end up drafting was a. It was roughly a 20% actually, not like 15. We started with 20, but we actually brought it down to roughly 15% of seller notes to help with the debt service, the debt service coverage ratio.

So 15% are sellerfi:10, 15% or so from my own fund. And the rest are SBA financed from Livelihood Bank. 15% from them, 15% from you, 70% from the bank.

Yep. So that that's a pretty traditional structure in self funded search land. Yep.

Sometimes it can be a little, you know the more aggressive is 10, 1080 but you did 15, 1570. Yeah. And the one asterisk to that is because the total loan size also includes working capital and a lot of credit. So the, the total finance amount was actually everything combined will be more than the purchase price.

So if you're looking at purely just the acquisition price, I will be putting at less than 10% which was a bit more, a bit less conventional.

So it just, I think one tip for everybody out there when asking for bank financing, always I get additional fund for working capital and getting a line of credit. I think all those are going to be very important to just build up that wall chest of working capital which is going to be very, very handy as you start running the business. Sure. Post acquisition liquidity, the. How much working…

Put on the balance sheet? Yeah. Right now after all the projection and due diligence, it was suggested around like 150 grand or so. I like yeah. With more buffer.