THE DOSSIER

The 12 Red Flags.

12 flags / 3 severity tiers / 60+ post-mortems behind them

Every flag has three parts: what it looks like in the numbers, the exact question to ask the seller, and the rule for when to walk. Built from 60+ buyer post-mortems. Complimentary, in full, on this page.

Read the flags

770+ searchers inside"We closed yesterday." - Chris Hall

WHY THIS EXISTS

Most buyers learn these after closing.

The searchers who lose everything rarely miss something exotic. They miss customer concentration. An owner who is the business. Add-backs that do not survive scrutiny. The same patterns show up deal after deal: of the failures we have studied in our own interview corpus of roughly 60 buyers, about 65 percent involve material seller misrepresentation. This dossier is the library of those patterns, tiered by severity, so you catch them before you sign.

Reading the flags does not make you diligence-proof. It makes you harder to surprise.

CRITICALverified, you walk

MODERATEnegotiate hard or walk

LOWprice it in, proceed with open eyes

THE LIBRARY

Twelve flags. The first one is open.

Here is the full index and the first flag in full. Enter your email and the other eleven open right here on the page. No waiting on an inbox.

RF-01Customer Concentration

CRITICAL

RF-02Active Litigation

CRITICAL

RF-03Regulatory and Environmental Exposure

CRITICAL

RF-04Owner Dependency

CRITICAL

RF-05Working-Capital Manipulation

MODERATE

RF-06Lease and Cost Cliff

MODERATE

RF-07Key-Employee Risk

MODERATE

RF-08Deferred Capex

MODERATE

RF-09Revenue and Margin Erosion

MODERATE

RF-10Related-Party Transactions

LOW

RF-11Aggressive Add-Backs

LOW

RF-12Channel Dependency

LOW

RF-01CRITICAL

Customer Concentration

What it looks like: One customer is more than 50 percent of revenue and there is no long-term contract. Between 30 and 50 percent is the moderate version of the same disease.
Ask the seller: “If your biggest customer left the day after I close, what happens? Is there a contract, or a handshake?”
The rule: Over 50 percent with no contract, walk. The business is a single relationship you do not own. At 30 to 50 percent, price the risk and build diversification into year one.

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Questions

Straight answers.

Where do the 12 Red Flags come from?

From 60+ buyer post-mortems: documented reasons real acquisitions died, reconciled into one library. Of the failures we have studied in our own interview corpus of roughly 60 buyers, about 65 percent involve material seller misrepresentation. That is our tally, not an industry survey. The flags exist so you catch it before you sign.

Can I use this on a live deal today?

Yes. Print it, run every flag against the CIM and the conversation, and ask the seller questions word for word. A seller who answers straight is telling you something. A seller who dances is telling you more.

Is this the whole system?

No. The flags are the screening layer. The walk-away doctrine, the diligence checklists, and the live deal reviews are what the school teaches. The dossier is the part you should never have to pay for.

Why publish it at all?

Because one wrong acquisition can take your savings, your credit, and years of your life. The community is complimentary for the same reason. Read the dossier, use it, and if you want the machine behind it, you know where we are.

Every deal you read gets safer.

The flags live in the community, applied to real deals every week. Membership is complimentary.

Join the community

770+ searchers inside"...came out as a professional searcher." - Ryan P. Whitehead