Mainshares Resource Center
Mainshares has an ever-growing pool of resources to help entrepreneurs and investors navigate the nuances of small business transactions.
Feb 10, 2024
With increased interest in SMB M&A, many investors are looking for ways to earn passive income from buying a business. This article outlines five approaches to passively owning an SMB as well as their pros and cons.
Jan 25, 2024
PIK interest refers to interest that is paid-in-kind vs in cash. It is relatively common in debt investments from private lenders and SBIC funds. This article outlines how PIK interest works and how it compares to cash interest.
Jan 13, 2024
For businesses with large amounts of equipment, buyers may turn to various forms of equipment financing to fund the deal. Equipment financing is backed by the equipment of the business and is a useful form of debt, if the deal is otherwise unbankable.
Jan 11, 2024
When buying a business as an asset sale, there is often depreciation recapture due to the IRS. This post explains how depreciation recapture occurs, how to calculate it, and how it is typically handled when buying an SMB.
Dec 30, 2023
This post covers F-reorganizations, a common approach to selling an S-corp. It allows the seller to roll equity without being taxed on the roll, while allowing the buyer to received a stepped up basis on the assets.
Dec 29, 2023
Many small business entrepreneurs form SPVs to acquire operating companies. SPVs allow entrepreneurs to shield their future investments and their own investors from the specific operating company.
Dec 16, 2023
While cash accounting simplifies tracking cash movements, accrual accounting offers a more comprehensive view of financial health, making it the preferred choice for investors and lenders.
Dec 15, 2023
For SMB acquisitions funded by investors, the entrepreneur will need to call the capital prior to the deal closing. This article explains the order of operations for funding an SMB acquisition and how to call capital.
Dec 14, 2023
Navigating the intricacies of an SBA 7(a) loan can feel overwhelming, especially when it comes to meeting insurance requirements. In this article, we discuss the essential insurances, from hazard and liability to worker's compensation and life insurance.
Dec 2, 2023
Structuring an equity raise can be complex, particularly when it comes to setting the ability to buy out the investors at a future date. This article aims to explain the equity call option, a way for small business entrepreneurs to buy out their investors.
Dec 1, 2023
Off-balance sheet liabilities refer to financial obligations and commitments that a company has but are not reported on its balance sheet. This post covers why these liabilities are important and how to diligence them.
Nov 18, 2023
One common worry is the status of the seller's assets, especially when it comes to potential legal entanglements like UCC liens. This post covers how to handle UCC liens in an asset purchase.
Nov 15, 2023
Getting an SBA term sheet is one of the most important steps after getting an offer accepted by the seller of a business. This post breaks down what goes into getting a term sheet for an SBA 7(a) loan.
Nov 7, 2023
Private Placement Memorandums (PPMs) are key disclosure docs used when raising capital for a small business. This post covers the typical outline, how a PPM is used, when it is presented and more.
Nov 3, 2023
The decision-making process and autonomy of the CEO depends a lot on how an LLC is structured. In this post, we break down the differences between member-managed and manager-managed LLCs.
Nov 1, 2023
Unlike SBA loans, seller notes can be structured in many different ways. This post breaks down common ways to negotiate a seller note to buy a business, including interest-only, balloon payments and stand-by clauses.
Oct 26, 2023
A Certificate of Good Standing is often required by lenders, attorneys and investors during a business transaction. This post outlines what the certificate means and why it's required.
Oct 20, 2023
This post explains blue sky laws' importance, differences between states, when to file and how to maintain compliance when raising money for a business.
Oct 13, 2023
Many small businesses with investors have provisions for tax distributions in their operating agreements. This post explains how phantom income is created and how tax distributions work.
Oct 6, 2023
Find pre-qualified acquisition targets on the Mainshares platform. The full set of targets are updated weekly.
Oct 4, 2023
The SEC disqualifies bad actors from taking advantage of Regulation D to raise capital for small businesses. This article covers the key parts of the regulation, outlines the disqualifying events, and explains how to check bad actor status.
Sep 30, 2023
Enterprise value and equity value are two important metrics for valuing and negotiating a small business acquisition. This post explores the differences, how to calculate them, and when to use which metric.
Sep 29, 2023
A waterfall structure is a way to dictate how distributions from a small business flow to investors and management. This article covers common waterfall structures in a small business acquisition.
Sep 24, 2023
With most SMB acquisitions being structured as asset sales, this article gives an overview of what an asset purchase means and how it impacts taxes and liabilities for the buyer and seller.
Sep 19, 2023
Although many small business sales are done cash-free, debt-free, working capital is critical to understand as a business buyer. In this post, we explain what working capital is, show how to calculate it, and how to ensure you’re covered.
Sep 18, 2023
Many small businesses still have outstanding EIDL loans issued during the pandemic. This leads to confusion over whether business buyers can assume these loans and use them as a cheap cost of financing.
Sep 12, 2023
Many self-funded searchers plan to raise capital to fund the purchase of a small business. This article explores raising capital through 506(b) vs 506(c) offerings under Regulation D.
Sep 11, 2023
Small business investors typically choose opportunities based on their ability to generate cashflow or increase in value. This post reviews investing for cashflow vs appreciation.
Sep 7, 2023
Small business roll-ups are becoming more popular as individuals leave private equity and look to buy Main Street businesses. This article explores this buying strategy and outlines tactics for rolling up SMBs.
Aug 30, 2023
Many small business buyers are ordering quality of earnings reports during due diligence. This post reviews the purpose of QoE reports as well as their typical cost for a small business acquisition.
Aug 29, 2023
With interest rates increasing, more seller notes on being put on standby. This post reviews full standby seller notes, why they are used, and their pros and cons.
Aug 23, 2023
This guide covers the questions to ask of a business owner when considering acquiring an existing small business. Commonly referred to as "due diligence", these questions will help you determine whether the business is right for you.
Aug 22, 2023
The past few years has seen of surge of activity in people pursing entrepreneurship through acquisition: the process of buying a business instead of building one. This post explains what goes into ETA.
Aug 21, 2023
This post covers how self-funded searchers and acquisition entrepreneurs use seller financing to fund the purchase of a small business.
Aug 17, 2023
For acquisition entrepreneurs looking to raise investor capital to fund a business acquisition, the concept of preferred equity can be confusing at first. One common piece of any investor-funded acquisition is a preferred return.
Aug 16, 2023
A guide to books on buying a business. From Buy Then Build to the Messy Marketplace, these are the must-reads for acquisition entrepreneurs.
Aug 15, 2023
With many small business acquisitions being cash-free, debt-free, it's important for business buyers to understand how outstanding debt impacts a seller's after-tax proceeds from a sale.
Aug 8, 2023
A sources and uses analysis tracks where funds will come from and how they will be used to close on a business acquisition.
Aug 3, 2023
This post dives into the licensing requirements to buy and own an automotive repair shop in California.
Jul 26, 2023
This post outlines how an equity step-up is used to calculate investor ownership in a business acquisition.
Jun 21, 2023
Attorneys are crucial members of any deal team. This post outlines how to work best with your M&A attorney during an acquisition.
May 17, 2023
This post gives an overview of the independent sponsor model of business acquisitions and highlights the differences compared to private equity and self-funded search funds.
May 8, 2023
This blog post explores the top industries for buying a small business in 2023, including business and consumer services, based on M&A activity and macroeconomic factors.
May 2, 2023
The auto repair business is one of the largest industries in the U.S. This post highlights the pros and cons of buying an existing auto shop.
May 2, 2023
This post provides an overview of the licensing requirements for individuals to purchase and operate an HVAC business in Texas.
May 1, 2023
This post highlights the top funds, syndicates, and angel investors for self-funded small and medium-sized business (SMB) acquisitions in 2023.
Apr 28, 2023
This post outlines the timeline for buying a business, including the phases and factors that affect how long it takes.
Apr 27, 2023
This post explores the differences between Indications of Interest (IOIs) and Letters of Intent (LOIs) in the context of business acquisitions.
Apr 26, 2023
This blog post outlines the various methods to find businesses for sale, including online marketplaces, networking and referrals, and direct outreach.
Apr 25, 2023
This post discusses the various types of loans available for financing the acquisition of a small business, including SBA loans, home equity loans, seller financing, 401K rollovers, and personal loans.
Apr 24, 2023
This blog post discusses the use of escrow agreements in small business acquisitions, and how they can provide a secure way to hold funds or assets until certain conditions are met.
Apr 23, 2023
This post explores the differences between traditional search funds and self-funded searches for entrepreneurs looking to acquire small businesses.
Get the latest in your inbox
Join our bi-weekly SMB newsletter. It's free and not annoying.
Broker-dealer services provided in connection with some of the investment opportunities on the Mainshares platform are offered through Main Street, a registered broker-dealer, affiliate of Mainshares, and member of FINRA/SIPC. For additional information, please contact your licensed securities representative of Main Street Securities LLC or visit FINRA’s BrokerCheck. If the investment opportunity does not include the "Brokered by Main Street Securities" designation, broker-dealer services were not provided in connection with the offering through Main Street.
Neither Mainshares nor Main Street Securities LLC make investment recommendations and no communication, through this Website or in any other medium should be construed as a recommendation for any security offered.
Should you be presented with an investment opportunity, such investment opportunities involve private, unregistered securities that are speculative and involve substantial risk. These investment opportunities are conducted in accordance with an exemption from registration, specifically relying on the private offering provision outlined in Section 4(a)(2) of the Securities Act of 1933, along with compliance with Rule 506 of Regulation D. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. There is always potential to lose money when you invest in securities or other financial products. Private placements lack liquidity and distributions are not guaranteed. You are strongly encouraged to seek professional advice prior to entering into any transaction for any securities and to consider your investment objectives and risks carefully before investing.
Neither the SEC nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided herein or through any references/links herein. There can be no assurance that any valuations provided by issuers are accurate or in agreement with market or industry valuations. Neither Mainshares nor Main Street Securities LLC make any representations or warranties as to the accuracy of such information.