Investment Banking Meets Small Business: OffDeal Revolutionizes M&A for Small Businesses
Small businesses are the unsung heroes of the American economy, employing nearly half of America’s workforce and making up 44% of the country’s GDP. However, when it comes time for small business owners to sell their companies, their options are often limited. Some turn to small business brokers, while others close up shop altogether. Large corporations typically use investment banks for acquisitions, but most won’t bother with deals less than $25 million.
Enter OffDeal, a startup founded by former investment banker Ori Eldarov and former Meta engineer Alston Lin. OffDeal is disrupting the traditional M&A process by automating the work of investment banks to offer their services to millions of small businesses. Using AI agents, OffDeal matches good businesses with institutional buyers and creates pitch decks to facilitate the sale. Customers interact with human advisors who are more efficient thanks to OffDeal’s software.
OffDeal has a database of 2 million American small businesses looking for an exit, and they are currently under contract with nine institutional buyers with 250 more on the waitlist. The startup charges between 5% and 10% of the transaction value for its services, similar to traditional investment banks. Eldarov is confident that OffDeal's AI-powered advisors will be able to close more deals than other brokers.
While there are concerns about AI agents making mistakes, OffDeal's CTO Lin assures that improvements to the underlying models have reduced the risk. OffDeal recently raised a $4.7 million seed round led by Radical Ventures and plans to use the funding to hire more advisors and invest in marketing.
In conclusion, OffDeal is revolutionizing the M&A process for small businesses by combining human expertise with AI technology. By bridging the gap between small businesses and institutional buyers, OffDeal is providing a valuable service that can help businesses find buyers and buyers find businesses. This innovative approach has the potential to reshape the landscape of M&A transactions and empower small businesses to achieve successful exits.