SVIC Podcast #4: JP Morgan Sues Frank, How To Spot Deal Due Diligence Red Flags, Trish Higgins

This interview was on 1 February 2023.

In this video, we are joined by Trish Higgins, who runs Chenmark Capital. Chenmark acquires and operates small companies. They own an array of businesses from: landscaping, boating tours, fruit tree pruning, food manufacturing, paint distribution, and much more.

We talked about conducting due diligence on businesses, red flags to be aware of when analyzing a business, dealing with post-close deal surprises, analyzing a company’s culture, how to integrate a small business, and much more.

Trish writes a free newsletter about business, and you all should subscribe: https://chenmark.com/weekly-thoughts/

Episode Notes:

00:58: Why is JP Morgan Suing Frank
04:46: How to initiate deal due diligence
05:40: Making offers with incomplete data
06:40: Walking away from deals that don’t make sense and avoiding sunk cost fallacy
07:52: Deal due diligence process
08:56: Financial due diligence
12:58: Deal show stoppers
15:00: Doing the deal is the easy part
15:55: Founder due diligence
16:54: Culture due diligence
23:54: Buying companies people want to work at
26:31: Transitioning management
27:52: Simpler the business, the better
29:36: Training new CEOs
30:59: Labor shortages and higher interest rates
32:16: Less debt the better
32:57 : Tracking consumer spending
35:00: Starting over again, what would you have done differently?
37:42: Partnering with family on deals while raising a family
39:41: Forcing crucial conversations
42:19: Either company time or raising family time, don’t try to mix the two

Books Mentioned:

• The Messy Marketplace: Selling Your Business in a World of Imperfect Buyers
• Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game