We recently ran two national passes on one of the most sought-after markets in small-company acquisition: independent managed IT services providers. Fifty companies came out of the data matching a careful buy box on paper. Independent, founder-owned, long tenure, recurring contract revenue, healthy size.
Then a person checked every name. Five survived.
The other forty-five are a tour of everything wrong with how most buyers source deals, so here is what actually died, anonymized but real.
The two most striking names in the raw data were two of the largest MSP roll-up platforms in the country. One of them has been through three rounds of private equity ownership and has spent years buying exactly the kind of company our client wants to buy.
They surfaced as targets. The data saw the right industry, the right size range, the right words on the website. It could not see that these are the sharks, not the fish. A buyer working straight from the list would have sent his introduction to his biggest competitor.
One "company" appeared on three consecutive data pulls from the same source. It was not a company. It was an anonymous broker listing, a business for sale dressed up with a company-shaped name, leaking from a listings feed into company data.
One company appeared in two reports from the same data source, days apart. In the first, its estimated EBITDA was one number. In the second, exactly half that number. Same company, same source, same week.
Modeled financials are a sorting hint, never a fact. We have seen a company dead for years carry a nine-figure revenue estimate, and a two-person shop carry a seven-figure profit estimate with a founding date in the future's recent past. If a number was not counted from something real, treat it as a guess wearing a suit.
Two of the five survivors share their names with entirely unrelated companies: one with a New York engineering firm and a UK holding company, another with a patent consultancy two thousand miles away. Databases routinely blend these identities, pulling one company's headquarters and another's headcount into a single confident-looking row.
The only fix is unglamorous: tie every data point to the exact legal entity, by hand, before anything travels.
The five that survived are genuinely remarkable: multi-decade, founder- and family-owned, real contract revenue, no investor anywhere in the history. In a market where a decade of platform buying has hollowed out the middle, verified independents at scale are the scarcest asset there is.
Which is the real lesson. The value was never in the fifty. It was in knowing, with a written reason for each, which five were real, before the first message spent anyone's credibility.
Five Experts runs proprietary searches for buyers of owner-operated companies. More than 25,000 companies checked by hand. We are not a business broker and not an M&A advisor; we work only for the buyer. fiveexperts.com
