Underwriting · V-track · 31 July 2026
Pre-LOI Screening for SBA Business Buyers
A first-time buyer acquiring a small business with SBA debt signs an unlimited personal guarantee on a seven-figure obligation, working from a broker listing with an asking price and a seller-supplied cash flow number. Professional diligence costs $15-25k and is uneconomic below roughly $2M enterprise value, which is most of the market. The information that kills deals - regulatory bans, forming mass torts, licensing…
74
± 3.1
BUILD
REWORK
PROVE
BUILD
rubric w3.0-20260804 · interval ±3.1 at 95% (n=10, sd=1.6, measured 2026-08-04)
Stages run102
Cost to produce$0.00
Wall clock64 min
Confidence76/100
What an analysis cost to produce belongs beside it. A reader deciding whether to trust a verdict is entitled to know whether it came from twenty-six stages or one, and nothing else in this category will tell them.
every charge, every rebuttal, every ruling
The case against it
| Charge | Rebuttal | Ruling |
|---|---|---|
| Core discovery mechanism is largely inaccessible to a search agent | CONCEDED — Conceded. The record asserts differentiation ('none independently search regulatory dockets, litigation records, or licensing registries') but provide | partial — Upheld against the autonomy story — PACER/county e-filing/licensing registries are not uniformly agent-accessible — but irrelevant to first dollar because the smallest_offer explicitly runs |
| Deterministic SBA structuring layer duplicates what the lender already computes | Partially rebutted. The thesis explicitly frames the product's value window as pre-LOI, before a buyer has committed to one target or engaged a lender | partial — Lenders compute this only after a buyer has a target, an LOI and a relationship; the paid window is pre-LOI across 5-8 targets where no lender is engaged. True effect is it caps willingness- |
| False negative on a liability-bearing finding causes catastrophic buyer loss and legal exposure | CONCEDED — Conceded. No disclaimer language, insurance, confidence-threshold design, or liability-limiting terms of service appear anywhere in the record. The ch | partial — Real but managed by naming the product a screen, not diligence: 'reasons to walk before you spend $20k', findings cited to source, explicit ToS that this does not replace counsel or QoE. Con |
| Buyer lifecycle is one-and-done, not recurring | CONCEDED — Conceded. Nothing in the record models actual usage cadence, retention, or LTV against the assumed subscription structure. The thesis asserts per-API- | upheld — Conceded and correct: a searcher runs 3-8 screens then closes or quits. This kills the $499/mo SaaS framing and forces per-deal pricing with total ARPU of roughly $500-2,000 — which is exact |
| Exotic risk flags are rare, so most reports show nothing the free DSCR calculators don't already show | Rebutted. Incumbent free tools are explicitly documented as single-variable DSCR only; this candidate's deterministic engine additionally outputs inje | partial — Base rate of a deal-killer is genuinely low, but a clean report still has value to someone about to personally guarantee $1.2M, and the full injection/post-salary-DSCR/sensitivity/reverse-so |
| Broker channel resistance suppresses the highest-intent distribution path | Rebutted. The channels list does not include brokers or broker-controlled listing platforms as a distribution path at all. The top four channels (Sear | dismissed — No listed channel is broker-owned or broker-gated; SearchFunder, the ETA newsletter and the podcasts are buyer-side properties. Broker hostility is even mild positioning fuel. |
| Named competitor already occupies the exact wedge with a head start | Partially rebutted. The record explicitly distinguishes this candidate's mechanism from Rapid Diligence and Deal OS: those tools analyze documents alr | dismissed — Competitor existence is evidence buyers pay, not a charge. Rapid Diligence charging quote-based against the $15-25k QoE norm is the best payment evidence in the file. |
| Pricing model mismatch drives churn regardless of product quality | CONCEDED — Conceded. No field in the record addresses buyer psychology around subscription vs. per-deal pricing, nor does it document any pricing experiment or p | upheld — Buyers think per-deal. Upheld and already resolved by the smallest_offer: sell $249 per screen, drop the $499/mo entirely until a repeat-buyer pattern shows up in Stripe. |
| Buyer population count is speculative and may overstate reachable, in-market demand | CONCEDED — Conceded explicitly. The buyer_population field self-labels its own basis as inferred and states plainly that no source isolates acquisition-only clos | partial — The 17,000 figure is self-labeled inferred and should not be trusted, but the reachability question needs only ~100 in-market buyers this month, and SearchFunder's ~10k members plus a 5,836- |
A separate agent argued against this idea, a second answered, a third ruled. 5 of 9 charges were conceded rather than defended. Published in full because a score with the objections removed is a advertisement, and because the objections are usually more useful than the verdict.
dimension by dimension
How it scored
| Dimension | Score | Reasoning |
|---|---|---|
| D1 | 84 | An unlimited personal guarantee on a seven-figure loan against seller-supplied numbers is about as acute as SMB pain gets; the only discount is that dread at screening st |
| D2 | 68 | Adjacent paid market is loud and priced ($15-25k QoE, Rapid Diligence quoting against it, $1,295 data rooms), but every direct structuring analog is a $0 lead-gen calcula |
| D3 | 82 | Buyer-only channels are named, enumerable and cheap: SearchFunder forum (~10k self-identified searchers), Big Deal Small Business (5,836 opt-ins, 50-60% open), Acquiring |
| D4 | 30 | Nothing defends v1 except the tedium of encoding SOP 50 10 8 correctly and the source-map built by trial and error; outcome-labeled data is a year-two asset, correctly we |
| D5 | 80 | Deterministic Python finance engine plus Flask/Stripe plus a manually-written risk section is squarely in the operator's stack; 5 days is credible because the hard part ( |
| D6 | 52 | Per-deal $249 collects cash cleanly but ARPU is bounded by a 3-8 screen search; the $499/mo subscription in the record is a fiction the charges correctly demolished. |
| D7 | 45 | Even at generous assumptions this is single-digit-millions US, with real but unproven UK/DACH extension; realistic path is a $300-800k/yr one-person shop unless it become |
| D8 | 72 | Deterministic-engine build and payments are dead-center in his skills; the gaps are SBA SOP domain fluency and zero standing in ETA communities, both closeable by reading |
| D9 | 90 | Manual delivery plus a Stripe link plus a named forum of buyers means a first $249 within 7-14 days is realistic; nothing must be built before money changes hands except |
named, priced, and dated
Who already does this
| Competitor | Pricing | Funding | Launched | Overlap |
|---|---|---|---|---|
| Rapid Diligence | Quote-calculator based, not publicly disclosed; positions ag | unknown | unknown | partial |
| Devaland / Deal OS | not disclosed | unknown | content dated 2026, appear | partial |
| Searcher OS | free tier + paid plans (7-day trial), amount undisclosed | unknown | unknown | partial |
| DealFlowSystem SBA DSCR & Fundability Calculator | free calculator; paid 'blueprint'/course upsell, amount undi | unknown | unknown | partial |
| Rejigg SBA Loan Calculator | free | unknown | unknown | partial |
| ClearlyAcquired | not disclosed (platform + direct investment in searchers) | unknown | unknown | partial |
| DealRoom (virtual data room, referenced via DealStream comparison) | starting at $1,295 | unknown | unknown | adjacent |
| Bank-branded free DSCR calculators (Captec, Fastway SBA, AMP Advance, Midwest CPA) | free (lead-gen for lender/CPA services) | n/a | n/a | adjacent |
Where the buyers actually are
| Channel | Why it reaches them |
|---|---|
| SearchFunder.com forum | |
| Big Deal Small Business newsletter (Guesswork Investing) | |
| "SBA 7(a) DSCR calculator" / "SBA acquisition loan calculator" search | |
| Acquisitions Anonymous / ETA podcast guest slot | |
| r/smallbusiness, r/Entrepreneur SBA threads |
what stands in the way
Regulatory gates
| Gate | Finding |
|---|---|
| G1 | No concrete legal violation identified. Automated web searches against public regulatory dockets, litigation records, and licensing registries are lawful. SBA structuring based on published |
| G2 | Core loop is automated: search-agent executes regulatory/litigation/licensing queries, Python deterministically computes SBA structure per SOP 50 10 8, report is generated. No per-customer m |
| G3 | Professional diligence for SBA deals is a paid market. Brokers, accountants, and legal counsel charge $15-25k per deal. Lender-grade SBA structuring is a paid service (underwriters, consulta |
| G4 | Thin first version: (1) web search wrapper around public APIs (Google, SEC EDGAR, state licensing DBs) with ranking heuristic—30 days, Flask + Python requests. (2) SOP 50 10 8 calculator in |
| G5 | Reachable channels exist: SBA broker networks (NAIBA, local chapters), small business acquisition forums (BizBuySell, Flippa for SMB), LinkedIn groups for first-time buyers, accountant/CPA r |
written before the outcome is known
The pre-registered test
| Term | Value |
|---|---|
| days | 14 |
| offer | A one-page Stripe-linked sales note titled 'Pre-LOI Deal Screen — before you sign the guarantee': send a broker listing URL plus state and industry, and within 72 hours receive (a) a full SOP 50 10 8 structure sheet — re |
| price | 249 |
| metric | Completed Stripe charges at $249 for the Pre-LOI Deal Screen, counting only strangers (no prior relationship), with refunds subtracted |
| channel | Free SearchFunder account: one substantive post in the SBA/structuring topic showing a fully worked reverse-solve on a real live listing, then 100 direct outreaches inside 14 days — SearchFunder DMs to members who self-d |
| threshold | ≥3 paid screens from 100 outreaches within 14 days. 2 paid = extend 7 days at $349 to test price rather than demand. 0-1 paid with ≥10 replies saying 'send me the free calculator instead' = the $0 floor is real; kill the |
Recorded at the moment the verdict was issued and not editable afterwards. If this is launched, the result lands on the ledger whether it passes or fails.
and what moves it forward
Where this idea is
| Phase now | Validating — A pre-registered test is live and running. |
| What you do here | Stand up a real offer and drive traffic to it. A test nobody saw resolves VOID, not FAIL — and VOID teaches you nothing. |
| To leave this phase | The frozen test resolved PASS, or you are deliberately overriding a FAIL with a stated reason. |
| Gate status | The test is VOID — registered and never run. That is not a failure and it is not a pass; it is an absence of evidence, and advancing on it means advancing on nothing. |
| Next phase | Building — Committed. The thing is being built. |
This gate is NOT met. Advancing an idea needs its link — the one handed back when it was submitted. Founder-owned ideas are advanced from the console. See the whole pipeline.
| What to do in this phase | What it proves | From which part of the analysis |
|---|---|---|
| Stand up a real offer that can take money | The offer exists and is purchasable. | demand_test |
| Drive traffic that did not come from you | The test was actually run. | demand_test |
| Reach ≥3 paid screens from 100 outreaches within 14 days. 2 paid = extend 7 days at $349 to test price rather than demand. 0-1 paid with ≥10 replies saying 'send me the free calculator instead' = the $0 floor is real; kill the paid report and pivot to the email-gated free calculator as a lead magnet. 0 paid and <5 replies total = reachability was overstated; kill. Completed Stripe charges at $249 for the Pre-LOI Deal Screen, counting only strangers (no prior relationship), with refunds subtracted before the deadline | The frozen threshold is met, which is the only thing that advances this phase. | demand_test |
Every step traces to a field this idea's own underwriting produced — not generic best practice, which is free everywhere. 0 of 3 complete. Mark them off in the console.
and what did not complete
How this was produced
| Measure | Value |
|---|---|
| Wall clock | 64 minutes |
A verdict produced by 22 of 23 stages is not the same artefact as one produced by all of them, and which stages failed was recorded on every run and shown nowhere until now. If a stage that feeds a section died, the section came from somewhere else or nowhere — and you are entitled to know which is in front of you before you act on it.
The money
| price point | anchor: Sits between the $0 lead-gen DSCR calculators (Rejigg, Captec, DealFlowSystem) and the $1,295 DealRoom data-room floor, and is a rounding error against the $15,000-$25,000 QoE alternative it substitutes external-risk-discovery for; monthly: 499; rationale: A monthly subscription matches the actual buyer behavior described in the thesis - screening many deals to close one over a search period - rather than a one-off report fee; $499/mo is cheap enough to be a no-brainer against a single $15-25k QoE avoided, but is 5-10x what a free calculator charges, which is defensible only because the product does something calculators don't (live external risk discovery, not just DSCR math). |
| current spend | amount: $15,000-$25,000 for sub-$3M EBITDA deals; boutique/flat-fee alternatives now as low as $7,500-$15,000; large-firm quotes run $25,000-$100,000+; source: Multiple diligence-provider pricing pages: '2026 costs: $15,000-$25,000 for sub-$3M EBITDA businesses' (CT Acquisitions); a Big Four/regional firm quote of $22,000 vs a flat $7,500 boutique alternative for a $4.5M HVAC deal (Bedrock QoE); '$5,000 to $15,000 range when working with boutique firms' for sub-$5M deals (WebAcquisition); on what: post-LOI buy-side Quality of Earnings (QoE) reports and/or analyst-built SBA DSCR/structuring workbooks |
| funding route | presale |
| revenue model | hybrid |
| churn monthly pct | why: The buyer's engagement with any acquisition-search tool is bounded by the search itself, not by ongoing need - once a deal closes or the search is abandoned, the subscription has no further reason to exist. Search fund research shows the acquire-a-company stage runs roughly 12-24 months, and only about half of searches that start actually close; for self-funded SBA buyers (no capital-raise overhead, faster and often more sporadic searches) effective active tenure is likely shorter and noisier. A 15%/mo churn implies ~6.5-month average tenure, consistent with an intense multi-month screening burst rather than year-round use, and is inferred, not directly sourced.; value: 15 |
| cash to first dollar | 1500 |
| marginal cost per unit | value: 15; components: Per-deal cost = (n search-agent web/API queries against regulatory dockets, litigation records, licensing registries at roughly $0.01-$0.05/call) + (LLM inference tokens for ranking/summarizing findings and running the deterministic SOP 50 10 8 DSCR/sensitivity/reverse-solve math) + trivial Postgres/Supabase storage and Vercel compute. No analyst or human touches the deal between payment and report delivery, so labor cost is zero by design. This per-unit figure is inferred from typical current search-API and LLM pricing, not sourced from a vendor invoice. |
What has to be built
| wedge | segment: First-time SBA buyers, sub-$2M deals; evidence: Confirmed the segment is real and dominant at this deal size, and that skipping proper diligence at this exact price point has already produced a bankruptcy case study.; why they switch: They are structurally priced out of real diligence and structurally under-informed by free tools that stop at one DSCR number, while signing an unlimited personal guarantee on a 7-figure loan based only on seller-supplied numbers; incumbent failing them: Traditional QoE/diligence firms (analyst-hour priced $15-25k) plus free single-variable DSCR calculators (Rejigg, Captec, DealFlowSystem) |
| data moat | A growing labeled dataset mapping industry+state+risk-category combinations to actual resolved outcomes (deal closed or killed, and later confirmation or absence of the flagged bad news) — this calibrates false-positive/negative rates on the search-agent in a way no new entrant can replicate without running equivalent deal volume. Secondary moat: the accumulated map of which regulatory/licensing/litigation sources exist per state and industry and how to query them reliably, built through trial and error rather than documented anywhere. |
| components | Deterministic SBA SOP 50 10 8 engine (injection, DSCR pre/post owner comp, sensitivity, re: risk: med; units: 6; Search-agent discovery loop (query generation, ranking, citation extraction): risk: high; units: 8; Per-state/per-industry regulatory, litigation, licensing data source integration: risk: high; units: 10; Seller document parsing (CIM/P&L extraction, OCR fallback): risk: high; units: 5; Report generation and delivery (PDF/web, templating): risk: low; units: 3; Backend orchestration: job queue, Postgres schema, retry/dead-letter handling: risk: med; units: 4; Frontend intake (deal details, listing upload, financials form): risk: low; units: 4; Stripe checkout and entitlement gating: |
| total units | 46 |
| smallest offer | what: Single-deal report: buyer pastes a broker listing URL + state/industry, gets back (1) a deterministic SOP 50 10 8 DSCR/max-price structure and (2) a manually-run regulatory/litigation/licensing risk scan written up as findings — automate the deterministic Python calc first, do the 'search-agent' step by hand for the first 20-30 orders; price: 249; format: report; days to build: 5; days to build note not a field: n/a |
| wedge strength | workable |
| hardest unknown | Whether an autonomous search-agent can reliably separate real signal (an actual regulatory ban, a forming mass tort, a licensing trap) from noise and hallucination across arbitrary industry/state combinations, with no labeled ground truth to validate against and real liability attached to both false positives (killing a good deal) and false negatives (missing the thing that was the whole point of the product) — this can't be unit-tested the way the deterministic SBA engine can, it can only be measured against live deals over time. |
| days to first dollar | 7 |
the verdict is not the end of the process
If you decide to do this
| Step | What it means | Where it happens |
|---|---|---|
| 1 · Read the case against it first | Charges the arbiter upheld are the ones to answer before committing. If an upheld charge is fatal for you, the verdict is not. | on this page |
| 2 · Commit the pre-registered test | The test is already written: Completed Stripe charges at $249 for the Pre-LOI Deal Screen, counting only strangers (no prior relationship), with refunds subtracted at ≥3 paid screens from 100 outreaches within 14 days. 2 paid = extend 7 days at $349 to test price rather than demand. 0-1 paid with ≥10 replies saying 'send me the free calculator instead' = the $0 floor is real; kill the paid report and pivot to the email-gated free calculator as a lead magnet. 0 paid and <5 replies total = reachability was overstated; kill.. Committing freezes it with a date, and it cannot be edited afterwards. | promote it → |
| 3 · Stand up the offer | A landing page, a price, and an instrumented link. Nothing is proven until somebody who does not know you is asked to pay. | ventures → |
| 4 · Run distribution and let it resolve | The test resolves mechanically on its deadline: actual against threshold, no judgement. A test never distributed resolves VOID rather than FAIL — inaction is not evidence. | automatic, daily |
| 5 · The outcome grades this verdict | Whatever happens is written back against this prediction and scored. That is what makes the next verdict better, and it is the only honest basis for ever claiming an accuracy. | the ledger → |
The evidence supports building it, and the objections below were answered rather than conceded. Steps 2 and 3 open the operator console, which lives under this same domain at /account and requires a log-in — the public record is readable by anyone, and committing a prediction against it is not. Step 5 happens automatically: this prediction is already frozen with its score, its confidence, and every dimension as it stood, waiting for an outcome to grade it against.