Back to Academy
Deal Diligence

Reading a listing without getting sold

Learn what to question when a broker package looks too clean.

Video 18 min

Chapters

  1. 00:00
    The listing is a sales document

    Why the first read should separate seller claims from evidence.

  2. 04:10
    Normalize SDE before trusting it

    How add-backs, owner salary, and one-time expenses can change the real earnings picture.

  3. 11:30
    Find the first diligence questions

    A short checklist for customer concentration, owner dependence, and revenue quality.

Key takeaways

  • Normalize add-backs before trusting SDE.
  • Look for customer concentration and owner dependence.
  • Tie every financing assumption back to debt service coverage.

Use this lesson as a checklist before you send an LOI or lender package.

Start with what the broker is trying to prove

A listing usually tries to prove that the business has stable earnings, transferable customers, and a price that makes sense. Your job is to identify which claims are supported and which ones need diligence.

Turn the listing into questions

Do not argue with the listing. Translate it into questions: which add-backs are recurring, who owns customer relationships, what revenue would disappear after a transition, and whether the acquisition can support debt service.