I own a small manufacturing biz doing about $4M rev. When I decided to sell, I looked at the usual marketplaces and immediately felt like a piece of meat. Brokers calling nonstop, tire-kickers, my financials floating around who knows where. So I joined a private community of owners and advisors instead. Took longer, but the buyer I ended up with came through a trusted intro. Curious if others have gone this route or if I'm just a control freak.
Divestment
Why I used a private community instead of a marketplace
Nah, you're not a control freak. Marketplaces are a race to the bottom for anything under $10M. Private network is the only way to keep your sanity.
How do you even find these private communities? Every time I search I end up on a forum that's just brokers pretending to be owners.
Honestly it was a crapshoot. One was a paid mastermind that was mostly recycld LinkedIn content. The one that worked was invite-only through a peer group I'd been in for years. Slow burn.
Private community = 12 months of 'just circling back' emails and one guy who ghosted after signing an LOI. Marketplace = 200 tire kickers in 3 weeks. Pick your poison.
That ghosting thing is real though. Had a private buyer string me along for 6 months then vanish. At Least on a marketplace you know everyone's a vulture from day one.
What was the actual advantage for you? Better price or just less hassle?
Both, sort of. Price wasn't a home run but the terms were clean and the buyer knew the industry. No earnout circus. I think the trust part saved me at least 3 months of legal back and forth.
3 months of legal bills is real money. What did the private community cost you though? Memberships aren't free.
One was $6k/year and worthless. The peer group was $1,200/year but I'd been in it for 4 years before selling. So the real cost was patience, not cash.
Interesting thread. I'm on the buy side and I actually prefer private networks. Marketplaces are full of sellers with unrealistic numbers and brokers who don't know the business. Half the time I'm explaining their own operations to them.
lol the broker explaining the business to me while getting the product name wrong. classic.
The problem with private is you only get one shot at a buyer who might be a flake. Marketplace gives you volume. Volume lets you walk away from bad deals. Private network doesn't always have that luxury.
Maybe it's less about private vs marketplace and more about how you vet the buyer. A bad actor is a bad actor no matter where you meet them.
That's fair. I probably got lucky with the intro. Though I'll say the private route filtered out the obvious time wasters before they ever reached me. Nobody in that group was going to introduce a guy who wasn't serious.
Those intros are worth something, honestly. On a marketplace I have zero social cost for wasting your time. In a private group, if I jerk a seller around, word gets back and my reputation in that circle is done
So the real product is accountability. Interesting.
Accountability and a monthly invoice. Anyway I'm still going marketplace for my plumbing supply place, I don't have 4 years to wait for the perfect intro.