'I bought a business and it failed'

The speaker recounts buying a lower‑middle‑market business (closed October 2023) that declared bankruptcy in June 2024 and left him personally liable on guarantees; the fallout included litigation, a settlement months later, selling his home, liquidating assets, and living with family while applying to "somewhere between 200 and 500 applications" (only two final interviews). He stresses three linked truths: business acquisition can and does fail often ("over a hundred people" told him the same), failure is hidden by shame and NDAs/non‑disparagement clauses, and legal remedies are costly and unreliable.

Concrete risks and examples: seller fraud (one buyer found fraud four weeks post‑close), supplier shocks wiping out EBITDA, and dangerous reliance on SBA debt plus personal guarantees (the speaker cites personally guaranteed amounts and a hypothetical "four million dollar" SBA deal where a Quality of Earnings (QofE) saved him from signing multimple million‑dollar guarantees — he reports an "18,000%" return on the QofE spend in avoided downside). He flags lender metrics and bad claims online (examples: 'DSCR is 0.6' and gurus promising "no risk") as misleading and sometimes predatory.

Practical prescriptions he insists on, verbatim where used: hire an attorney with lower‑middle‑market M&A experience up front; buy a 'quality of earnings'; build your own financial model (and know every input); search off‑market (use AI as a tool); define and enforce a strict buy box; assemble a deal team (legal, QofE, industry consultant) before diligence; and treat acquisition as a one‑way door—re‑entry to big tech/defense/consulting may be difficult. He also cites the upcoming SBA change (October of 2026) requiring '5%' cash equity as an indicator of the sector's evolving underwriting discipline.

Bottom line: acquisition is powerful but not a hobby or get‑rich‑quick path. Protect downside with proper legal counsel, rigorous QofE, disciplined sourcing and underwriting, and respect the real cost of personal guarantees.