The 'devastating' moment his ETA deal fell apart

A last-minute disagreement over price caused the seller to walk, throwing Markus Scott's dreams of becoming a lower-middle-market CEO into question.

Scott, now the CEO of thriving security-camera service called EyeQ Monitoring, says his deal-that-got-away was a "hard point that I think is really, really important for every searcher to know is going to come, and to be okay with."

In the traditional Entrepreneurship-Through-Acquisition (ETA) search model, the ETA searcher has two years to identify, negotiate and acquire a lower-middle-market business, after which the searcher becomes the CEO. But many searches end without an acquisition being completed.

"I had a great relationship with the seller of the business," remembers Scott. The seller "got my kids dolls. The deal was largely done."

But in the midst of due diligence, Scott's investment group discovered earnings were lower than expected, and sought a new structure for the transaction. But "the seller just had the number in their head that they wanted to make. They weren't willing to listen to any other structure. Deal fell apart, and at that point I think I was 14 months into the search process. Devastating, right? It's like, okay, I'm back at square one here."

Scott shares his insights in the Search Party episode, "The Walk-On Linebacker Who Grew His Business 24x." Watch the full interview on Search Party's YouTube channel.

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