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It sounds great, but I'm not sure the space needs to be "disrupted". I get it that there are a number of steps needed to buy a business, but this isn't exactly

by apapli 10y ago

It sounds great, but I'm not sure the space needs to be "disrupted". I get it that there are a number of steps needed to buy a business, but this isn't exactly buying a chocolate bar from the supermarket where all we need to check is the "best before" date has not passed. Proper, thorough, due diligence takes time, and knowing how much you are paying for a business versus how much you are handing over for goodwill (which is far from guaranteed) is hard, let alone being able to understand cultural fit, internal politics, market forces and the myriad of other internal and external factors that all influence a business on a daily basis. Warren Buffet apparently does it quickly (I didn't check beyond the claim in this article), but he has a talent for it, and I will guess a fairly large research team that are fully prepared and informed before they approach a prospective target. Comparing Warrent Buffets approach to this service to me comes off like a very well-intentioned but frankly naive initiative. Of course, if the author is planning to buy businesses at a massive discount to what they are truly worth then he indeed can probably skip some of the diligence - but that's a pretty poor outcome for the seller.

valuearb 10y ago
Warren's key competency is recognizing and valuing good businesses, he's not farming that out to any research team, even his own employees. Buffet has 24 total people at corporate, mostly finance people working on tax returns and a CFO obviously. Warren evaluates the business, values it, makes the offer, and relies on his CFO I believe to do basic due diligence and close the deal. But the key value Warren relies on is "moat" and that's a hard one to quantify for many tech businesses. Warren can buy a chain of furniture store because he thinks they are run well, efficiently but most importantly have a strong moat because of a great brand and locations in their market. So he can be confident the business will be around in decades. Will a web development company be? Will the web be? Those are harder questions and make applying Buffett's techniques far harder in this market, even if author had similar skills to Buffett, which is also very unlikely.

by apapli 10y ago

valuearb 10y ago

Warren's key competency is recognizing and valuing good businesses, he's not farming that out to any research team, even his own employees. Buffet has 24 total people at corporate, mostly finance people working on tax returns and a CFO obviously. Warren evaluates the business, values it, makes the offer, and relies on his CFO I believe to do basic due diligence and close the deal. But the key value Warren relies on is "moat" and that's a hard one to quantify for many tech businesses. Warren can buy a chain of furniture store because he thinks they are run well, efficiently but most importantly have a strong moat because of a great brand and locations in their market. So he can be confident the business will be around in decades. Will a web development company be? Will the web be? Those are harder questions and make applying Buffett's techniques far harder in this market, even if author had similar skills to Buffett, which is also very unlikely.