Caleb Siambi | Entrepreneur

No matter how good the numbers look, these are 5 reasons we don’t invest.

1️⃣ I don’t like, admire and trust the owner.

Buying a company is like entering a marriage. I broke this rule once. I knew it was a mistake before I signed, and it took me over a year to get out of it. No license, no opportunity, nothing is worth breaking that rule.

2️⃣ There’s no talent below the top.

I always ask: are there enough great people in this business to keep it performing for years? If every decision runs through one or two people at the top, the business doesn’t have real value.

3️⃣ It won’t be around in 10–20 years.

We plan to own our companies forever. If an industry might only last 10 years, owning it forever is impossible. If you can’t answer this question, don’t buy the business.

4️⃣ It’s boom-or-bust.

Housing. Mortgages. Oil and gas. In a good year there’s nothing but money. In the off years you can lose money for a long stretch. If it’s your only company, that’s very hard to survive. I want a business that stays steady through every cycle.

5️⃣ It has no repeat customers.

The first question isn’t how big a business is. It’s how durable it is. Customers who come back again and again are what make it durable. If you have to win every customer from scratch, you’re starting over every month.

Price matters. These matter more.