This year so far, our team has looked at well over 1,000 online businesses for sale.
We pull deals from Flippa, Empire Flippers, Acquire, MicroAcquire, BizBuySell, FE International, Quiet Light, Investors Club, broker pipelines, and a steady stream of off-market intros from operators who've sold a business before. Most of those listings get a 90-second look and a no.
37 made it past the first filter and into real diligence. Spreadsheets opened. Calls booked. Stripe and Google Analytics access granted. NDAs signed. Financials picked apart line by line.
We bought zero of those 37.
That ratio surprises people. It shouldn't. The job of an acquirer is to say no quickly and yes carefully. Most deals that look great in the listing fall apart the moment you ask the second question.
Here are the red flags that killed those 37 deals. If you're a seller, fix these before you list. If you're a buyer, internalize them before you wire money.
1. The owner IS the business
This is the single most common reason we pass.
The seller is the brand. They write every email, run every sales call, post every video. Half the customers think they're buying a product but they're really buying access to a person.
The day that person walks out the door, retention drops, organic traffic stalls, and the team doesn't know what to do because the seller never wrote any of it down.
We've seen $1.5M businesses where the seller's face is on the homepage and 60% of revenue comes from her personal email list. That isn't an acquisition. That's a job offer wearing a multiplier.
2. One channel = the whole business
We pulled out of a SaaS deal earlier this year where 89% of trial signups came from a single SEO page. One Google update away from zero.
The pattern repeats. One Amazon listing. One TikTok account. One affiliate. One paid keyword that's been profitable for 4 years and is about to stop.
We need at least two viable acquisition channels before we'll go deep, and ideally a paid one we can scale with capital.
3. Add-back gymnastics
Sellers love to add things back to SDE. Owner salary, one-time legal, "personal" travel that was clearly business travel.
We've seen sellers add back 40% of their reported costs and call the result "true earnings." Then we ask for 24 months of bank statements and the math collapses.
If the SDE only works after 12 add-backs, it isn't SDE. It's a story.
4. Trailing 3 months going the wrong way
Listings love to highlight the best 12 months. Smart buyers look at the last 3, then the last 1.
Three deals this year had top-line revenue down 30%+ in the trailing 90 days. Sellers framed it as seasonal. It wasn't. The market shifted, an algorithm changed, a competitor moved in. The deck was aging poorly and the price hadn't followed.
Pricing should track the trend. It rarely does.
5. Subscription metrics that don't survive scrutiny
For SaaS or membership businesses, the listing always shows MRR. We always ask for cohort retention, gross churn, net revenue retention, and cancellation reasons.
About half the time, those numbers don't exist. The other half, they look ugly. 8 to 10% monthly gross churn paired with high CAC means the business is a leaky bucket dressed up as a subscription.
If you're selling, build the cohort table before you list. If you're buying, refuse to value MRR until you've seen one.
6. Operations married to the seller's stack
The custom Notion the seller built. The Zapier graveyard with no documentation. The Shopify theme they've been hand-editing since 2019. The "internal tool" that's a $20/month service the seller forgot they were paying for.
Operationally messy businesses can be cleaned up. But the cleanup eats 6 to 12 months of post-acquisition focus that should be going toward growth. The price needs to reflect that, and most listings don't.
7. Legal exposure the seller hasn't disclosed
We've found unlicensed images on product pages, dropshipping arrangements with no supplier contracts, customer lists pulled from third-party tools in violation of TOS, and one case of a trademark dispute the seller "forgot" to mention.
This is why every diligence call ends with the same question: "What haven't you told us yet?"
It rarely produces full honesty. But the quality of the pause says a lot.
The deals we do close
The deals we close come from the same pipeline. Same brokers, same platforms, same outreach. The difference is they survive every one of these checks, and we still find a reason to keep digging.
Saying no to 37 deals isn't a failure. It's the work.
If you're selling and any of the above hits a nerve, you have time to fix it. Most of these red flags are addressable in 60 to 90 days, and the price you'll command after the fix usually pays for the wait.
If you're buying, the discipline isn't optional. The deal you walk away from is the one that pays for the deal you eventually close.