Getting to the core of what makes a deal backable is at the forefront of anyone who is involved in search. That was the subject of this panel at last year’s inaugural EtA Forum, which brought together four people involved in search in different ways to share their experiences. The key theme driving the conversation is, as the moderator, Paige Kohalmi says, “the searcher plus a good opportunity, and the right funding structure, is what makes a deal backable.” These three elements are equally core, and any investor is going to consider those three things closely, giving them equal weighting, before supporting an acquisition. One of the highlights from the panel was when the panellists discussed three different companies, in different sectors and with different profiles. They were asked to choose which of the three they liked most as a candidate for an investment. The fact that all three panellists chose a different first target just goes to highlight how subjective this process can be. Every investor and searcher is going to evaluate risk in a different way and, ultimately, come to a different conclusion. That does drive home the importance of character in the searcher and who they’ve got backing them, too. The capabilities of the searcher and what they will bring to the business can go a long way to strengthening the numbers sitting behind the business. The panel also covered a subject that is worth keeping in mind, that the downside with search is more protected than it would be with a VC or startup, because the business is already established and earning revenue. There’s no point in looking at a business that hasn’t proven this or hasn’t got strong recurring revenue (or there are clear risks to that revenue), and margins are a key data point that can make a business very attractive. Overall, this is a fascinating panel for anyone who is interested in better understanding the thought processes that factor into deciding which searches to back. Connect with Paige Kohalmi: https://www.linkedin.com/in/paige-kohalmi/ Connect with Sahil Shekhar: https://www.linkedin.com/in/sahil-shekhar/ Connect with Tom McGhie: https://www.linkedin.com/in/tommcghie/ Connect with Lui Pangiarella: https://www.linkedin.com/in/luipangiarella/ What we discussed: 1:25 Paige introduces the panel and topic for discussion. 2:45 Tom kicks off the discussion with his perspective of placing debt – what makes a deal backable? 4:50 Sahil describes his approach to identifying opportunity and how to find a deal to be involved with. 7:16 From the perspective of an investor, Lui discusses the importance of resilience. 10:43 “Simplicity” is a core concept with funding. Lui and the panel discuss what that word means to them. 12:42 The panel segues to discuss balancing the share of upsides. As someone who has been involved in both search and investment, Sahil shares his perspective. 16:57 Summarising the discussion to date, Paige says “the searcher plus a good opportunity, and the right funding structure, is what makes a deal bankable.” The next question is – is one of these elements more important? 18:26 The panel is presented with three companies, and asked to pick apart the opportunity of each. 25:44 An extended Q & A with the panel. 21:49 Pete provides a summary and analysis of the key findings from the panel. Key quotes: Tom: “The most important thing in deciding whether a deal is bankable from a debt perspective and where we should place that deadline is actually the searcher the people involved.” Sahil: “Both as a searcher and as an investor, you're trying to protect the downside, and to reduce business risk. There is a bit of operator risk, because there’s a transition in owner operators, so what you're trying to really protect against is other downsides.” Lui: “Recurring revenue is what we would put as our number one priority. If the business has got 90% recurring revenue, you know that you're going to survive next year. It's as simple as