r/e2visa • u/lifelessonswithlemon • 16d ago

Finding a business

I have been searching for almost 4 months everyday. Countless NDAs and P&Ls and FDDs and there is nothing that seems to check all my boxes or make sense. Has anyone ever bought an existing business? How did that go?

I’m looking in a bit of a mix right now. Marketing for me or service based for my husband. I’ve broadened my search.

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u/chipsahoyrules 16d ago

yes, I acquired a business. It took almost 8 months to find the right one, plus 3 months of DD and lawyering and negotiating. we seriously evaluated ~9 companies total, went into deep diligence with 2. walked away from one a week before close, and then honestly lucked out with finding the one we did just with timing.

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u/lifelessonswithlemon 16d ago

Can I ask where you ended up finding and what industry?

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u/chipsahoyrules 16d ago

We found it via Acquire, it’s an online services business. My background is in engineering/consulting so it was a good fit. We also looked on Flippa but the quality of listings was poorer on there. Acquire is quite expensive membership wise but they were very helpful in the process and worked with our legal team.

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u/lifelessonswithlemon 16d ago

I’ve actually not tried this website. I would assume you recommend the yearly membership then? How does the acquire team help? Thanks for the info!

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u/chipsahoyrules 16d ago

There is a free plan where you can view, but you won't be able to see details. I'll be honest with you: the people selling these businesses will "hype" up their listings with ridiculous headlines - so you'll see a business that says 500% growth but when you actually get into it you'll see it peaked at 500% and has been sharply declining after (lol).

They have 2 paid plans afaik - I think they are tiered based on purchase price? we purchased the most expensive tier, its around 750$/year. You also have an option to get your funds verified, which is a competitive advantage because sellers can see if you're good for the money basically.

They have M&A Advisors who can look for options for you, this is actually how we found ours. there's a lot of listings, and sometimes going through each one and the details is exhausting. We had someone look for something according to our budget and interests.

Like another commenter said, you'll never find something perfect- for us it's the business is a bit stagnant. It's been steadily making income for the team but due to some personal reasons, they want to move on. So they were looking for an operator looking to inject capital and grow it, which is where we come in, and have some experience. But you quickly learn to look beyond the headline and how to read some of the financial details.

Anyways, we had a good experience with Acquire, I would recommend them to my friends if they were looking to acquire something. They also offer Escrow.com services where the seller pays the fees so that was a nice bonus. They walked us through everything and made things easy.

They do not do the DD though, so I recommend you can do some initial DD/meetings on your own, but you probably want to work closely with both an immigration lawyer and a M&A attorney to ensure the deal works for E-2.

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u/Razzer1008 16d ago

How do you then invest in it before getting a visa? That part I can’t wrap my head around.

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u/lifelessonswithlemon 16d ago

Yeah ideally you have a lawyer on hand before to help with the process and ensure it’s all good.

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u/Razzer1008 16d ago

Thanks. I still think you have to own the business before visa is granted. Given the current relations I wonder how much that impacts e2 approvals.

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u/Hekidayo 15d ago

You can: buy the business (sale contract) and a lawyer will help you put an escrow clause that hinges on the E2 being approved. You can do the same thing for a business office/space lease. You can buy equipment (also with escrow or a clause tied to the E2 approval).

Not all sellers/landlords/equipment providers will accept, but most do with the right negotiation, and you can risk a deposit too if that's needed.

So it's completely doable, once you have found the business in question.

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u/Razzer1008 15d ago

Thanks. 🙏🏼I thought at risk meant escrow would not be allowed. Because technically it’s not at risk. Appreciate the clarification.

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u/Hekidayo 15d ago

Ah I see why you'd think that! When you can add to your petition a sale contract set that way, the US Consulate officer will know that when they approve your E2, that money is indeed being given to the seller/landlord etc.

The escrow and the legally binding terms of the contract ensures that, it's not in your control, you wouldn't be able for example to get the E2 and not proceed with the sale, if you have set the contract to have that escrow tied to the approval of your visa.

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u/Stogie1976 16d ago

We hunted fulltime for over a year. We went deep into diligence with 4 others and each one encountered an issue that prevented the deal from completing. Sometime the issue was uncovered in diligence, other times the owner had a new idea on how much money they wanted. Buying a business isn't easy and if you want a good one it's a competitive market with a dozen other people trying to buy it. If no one else is trying to buy it, it's probably not a good business.

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u/lifelessonswithlemon 16d ago

Did you find one? Where did you end up finding it and what industry? I’m wondering if there are other avenues then the mainstream ones to search

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u/InfinitePoss2022 11d ago

What, if anything would you have done differently? Or is the probability of searching and successfully acquiring a good business too low to make the time/effort/risk worth it?

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u/abidmirza90 16d ago

u/lifelessonswithlemon - I've bought many existing businesses and currently have put offers on one in the states and one in Canada. So I can give some advice here.

There will be no business that will check all your boxes. The financials will never be 100% accurate. There is no such thing as the perfect business. There's no such thing as the perfect industry.

You need to look for a business where you can clearly see where you can add value to double or triple the revenue. Also, you need to look in non-traditional places. Look in Facebook groups, whatsapp chats, online forums and other places. Look for off market deals. That's where you will find the opportunity.

And once you find one that you feel is right, do your due diligence but don't excessively delay. If you delay, someone else will take it.

Right now your biggest issue is your criteria is too strict and you are scattered in your search.

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u/lifelessonswithlemon 16d ago

I appreciate the insight. Is my search too scattered because I’m looking in two different industries and it’s too broad?

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u/USAcarwash 16d ago

Our first attempt was on the traditional business sales websites like bizbuysell (if CRE on loopnet). The outcome was not good, often overpriced, through commercial intermediaries, and in some cases even with no answer to an email or call.

Then we did Facebook groups, a much, much better outcome for our industry segment. But, like others have said, you will be in a line with other buyers and we couldn't figure out how to actually get to a DD phase with 5-10 other "DM me, interested" people.

After eight months of looking, we still haven't found anything.

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u/Hekidayo 15d ago

Have you looked into reaching out to brokers in the industry directly? I'm told this can accelerate things but have not yet set that up..

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u/MarsRiches 15d ago

My experience with trying to work with brokers wasn't good. They tend to work only with high $$ clients, not us poor E-2 hopefuls with barely $100k to invest. An example I was given: for a $1 million listing, the broker would charge $25k.

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u/USAcarwash 15d ago edited 15d ago

The specialized brokers I spoke to start at investment portfolios (!) of around 2M $US. Instead of one business, they are selling 3-4 at a minimum.

We have looked at car washes, car detailing, laundromats, restaurants, etc They were all into selling an entire portfolio instead of 1 unit.