Chapter 70: The Numbers behind the promise

Damian had learned one thing about buying a business.

Everyone had a reason their company was worth more than the numbers suggested.

Some had loyal customers. Others had promising technology, experienced employees, or a product that could become something much bigger with the right investment.

The trick was figuring out which reasons mattered and which ones were simply excuses for an unreasonable asking price.

He sat at his desk the following morning, staring at two spreadsheets.

Meridian Software.

Brightpath Systems.

Neither company looked terrible on paper. That was part of the problem.

If one had been an obvious disaster, he could have crossed it off his list and moved on.

His phone buzzed beside his laptop.

Maya Patel had sent him a message.

Maya: Brightpath’s initial financial documents have arrived. I’ve uploaded them to the folder we discussed. They’re incomplete, but there’s enough to begin a preliminary review.

Damian opened the folder.

Bank statements. Revenue reports. Operating expenses. Customer subscription records. Payroll summaries.

He clicked the revenue report first.

Brightpath had earned money consistently over the past several years. The monthly figures moved up and down, but there was no sudden collapse hiding in the middle of the records. Subscription income covered most of the company’s operating costs, and the business had remained profitable.

That was encouraging.

He moved to the customer report.

Six hundred and twenty-three paying businesses.

The figure looked better than he had expected, especially for a company with such a small team. Its customers weren’t all large companies with expensive contracts, either. Most were small businesses paying for tools they used every day.

Damian leaned back.

"Okay. That’s a decent start."

Then he noticed the column marked Customer Status.

He scrolled down.

And kept scrolling.

Several customers had downgraded their subscriptions. Others had canceled during the previous twelve months. A handful had been listed as inactive before their subscriptions officially ended.

He opened the retention summary.

Brightpath had kept a respectable number of its older customers, but newer customers weren’t sticking around as consistently.

Damian frowned.

He checked the dates, then compared the report against the revenue figures.

The problem wasn’t serious enough to dismiss the company immediately. Still, it raised a question.

Why were established customers staying while newer ones were leaving?

He wrote it down.

Customer retention: investigate.

Next came the expense report.

Brightpath spent less on marketing than Damian expected. Development costs were also low, which made sense for a company with only a handful of technical employees.

That explained part of its profitability.

It also meant the company might have been saving money in the wrong places.

A scheduling platform could survive for years with a basic feature set. But if competitors offered better integrations, automatic reminders, more useful reports, and easier payment processing, customers would eventually start asking why they were paying for an inferior product.

Brightpath’s records showed that it had received more feature requests over the past year.

Damian opened the support summary.

The same requests appeared repeatedly.

Accounting integrations.

Improved mobile access.

More flexible scheduling.

Automated invoices.

A better way to manage recurring appointments.

He rubbed his forehead.

"You’re not losing because the product is useless," he muttered. "You’re losing because people want it to do more."

That was fixable, at least in theory.

But fixing it would require money, developers, and time. There was no guarantee customers would stay long enough for the improvements to pay for themselves.

He added another note.

Technical review required before valuation.

His phone rang.

Oliver Grant’s name appeared on the screen.

Damian answered.

"Morning."

"Morning, Damian. I hope I’m not interrupting anything."

"I’m going through the documents now."

"Good. I wanted to check whether you had any initial questions."

Damian glanced at his notes.

"Actually, I’ve got a few."

"Go ahead."

"Your customer numbers look reasonable, and the revenue is fairly steady. But I’m seeing more cancellations among newer customers. Do you know why?"

Oliver paused briefly.

"We do. Some of them want features we haven’t built yet. Others sign up expecting the software to handle things it wasn’t designed for."

"How many leave because of missing features?"

"I’d have to check the latest figures before giving you a percentage. I don’t want to guess."

Damian appreciated that answer.

Too many people seemed comfortable throwing out impressive numbers and hoping nobody asked where they came from.

"Fair enough. What about the development backlog? How long would it take to address the most common requests?"

"That depends on how much we’re willing to spend. A few improvements could be done within months. The larger integrations would take longer, especially if we want them done properly."

"And your current developers?"

"One full-time developer. Another handles maintenance part-time. I do some of the product work myself, although I spend more time managing the business these days."

Damian looked at the employee list again.

"Which brings me to something else. How much of the business depends on you personally?"

Oliver let out a quiet laugh.

"More than I’d like."

"Can you be specific?"

"I handle most major customer relationships, approve larger expenses, manage the product roadmap, and deal with a lot of the administrative work. My operations manager keeps the daily side running, but there are things people still bring directly to me."

Damian made another note.

Founder dependency.

It was beginning to look like Brightpath’s biggest asset and its biggest weakness might be the same thing.

Oliver had built a useful product and kept hundreds of businesses paying for it. He also appeared to be holding together several parts of the company that should have been handled by separate people.

Buying the business wouldn’t automatically solve that.

In fact, if Oliver left immediately, Damian might inherit a company that worked perfectly well until somebody needed to make a decision.

"Would you be willing to stay after a sale?" Damian asked.

"For a transition period, certainly. Beyond that, we’d need to discuss the terms."

"That’s reasonable. I don’t expect you to work indefinitely for someone else just because I buy your company."

"Good to hear."

Damian smiled.

"One more thing. I’d like to speak with a few customers, including some who canceled recently. Not just your longest-standing clients."

There was a longer pause this time.

"That’s understandable," Oliver said. "We’ll need to arrange it carefully. Some customers may not want their account information shared with a potential buyer."

"Of course. We can work through the confidentiality requirements."

"All right. I’ll have my operations manager help arrange it."

They ended the call a few minutes later.

Damian returned to the spreadsheet.

Brightpath had real strengths. Hundreds of paying customers weren’t something a person could manufacture with a few optimistic projections. The company had survived for five years, paid its employees, and generated recurring revenue.

But it had also stopped growing quickly.

And now Damian had a better idea why.

He saved his notes and opened the Meridian folder.

The difference was immediate.

Meridian had a larger customer base, more established business relationships, and a product that had been operating for years. Its revenue was attractive, but its aging infrastructure and dependence on a major customer made the purchase more complicated.

Then there was Rachel Morgan.

And Northstar Advisory Group.

Damian had spent enough time examining Meridian to know that the asking price wasn’t the only question anymore. He needed to know what he would legally own, who could interfere with future decisions, and how much money he would have to spend after the acquisition.

Brightpath had a different set of problems. The company seemed simpler, but it needed product investment and possibly a change in management.

Neither option was an easy win.

His phone buzzed again.

This time, it was Ethan.

Ethan: You alive?

Damian replied.

Damian: Unfortunately.

Ethan: Good. I need lunch.

Damian: Buy your own.

Ethan: You have millions of dollars and you’re still acting like I owe you money.

Damian: You do owe me money.

Ethan: That was one time.

Damian: You said you’d pay me back on Friday.

Ethan: Which Friday?

Damian laughed and shook his head.

Damian: Get dressed. I’ll pick you up in twenty minutes.

Ethan: That’s my rich boy.

Damian put the phone down and returned to the system window hovering near his desk.

It had remained quiet throughout his review.

He had almost forgotten it was there.

A gold notification appeared.

[INVESTMENT EVALUATION IN PROGRESS.]

[NO QUALIFYING CAPITAL ALLOCATION DETECTED.]

[CURRENT BALANCE: $5,099,924.32.]

Damian read it once and dismissed the display.

He wasn’t surprised.

He hadn’t bought anything, and he hadn’t committed any money. The System had nothing to reward.

That was fine.

He had spent too much of his life worrying about what he couldn’t afford. Now he had the opposite problem: he could afford several things that might turn out to be mistakes.

He wasn’t about to let a number in his bank account make him careless.

Ethan was waiting outside the university gate when Damian arrived.

He opened the passenger door, climbed in, and immediately looked around the interior.

"Nice car."

"It’s the same car."

"I know. I’m appreciating it."

"You’re appreciating my money."

"Your money has excellent taste."

Damian pulled into traffic.

"Where do you want to eat?"

"Somewhere expensive."

"Why?"

"Because I want to experience the life of the rich before you lose everything buying a company with a broken spreadsheet."

Damian glanced at him.

"You’re not funny."

"I’m hilarious. You’re just stressed."

They settled on a restaurant a short drive from campus. It was nicer than the places they used to visit, with comfortable booths, large windows, and a menu that made Ethan whistle when he saw the prices.

He ordered without hesitation.

Damian took his time choosing.

While they waited, Ethan asked, "So, what’s the verdict? Which company are you buying?"

"Neither yet."

"Seriously?"

"Seriously."

"I thought you were getting somewhere with Meridian."

"I am. The problem is that getting somewhere isn’t the same as getting the answers I need."

Damian explained the outstanding legal review, Rachel’s rights, and Northstar’s approval requirements. Then he told Ethan about Brightpath’s customer retention problems and the development work it would need.

Ethan listened, occasionally stealing a piece of bread from the basket between them.

When Damian finished, he leaned back.

"So one company might have legal problems, and the other needs a lot of work."

"That’s one way to put it."

"And you’re considering spending millions on one of them."

"If the numbers make sense."

Ethan pointed at him.

"There’s that sentence again."

"What sentence?"

’If the numbers make sense.’ You say that like numbers can’t lie."

"They don’t lie. People lie about what the numbers mean."

Ethan paused.

Then he nodded slowly.

"Okay, that was actually good."

"Thank you."

"Don’t get used to it."

Their food arrived, and the conversation moved on to football, campus gossip, and a lecturer Ethan insisted had a personal grudge against him.

For half an hour, Damian didn’t think about acquisition agreements or customer churn.

It was a welcome break.

After lunch, they walked through a nearby shopping center. Ethan stopped at a display of watches, admired one, checked the price, and immediately put it back.

"Absolutely not."

Damian laughed. "Thought you wanted the rich life."

"I want the rich life with financial discipline."

"That’s convenient."

"It’s called being smart. You should try it before you buy a company."

They continued walking.

Damian had enough money to buy the watch without thinking twice. A few months ago, he would have spent the rest of the afternoon calculating whether he could afford it.

Now, he could afford it and still choose not to buy it.

That felt like progress.

His phone vibrated as they reached the parking garage.

A message from Maya.

Maya: The attorney has confirmed receipt of Meridian’s additional materials. Rachel has also agreed to a follow-up discussion, provided the meeting focuses on the specific rights she retained and the proposed use of the original architecture. We’re still waiting on the complete Northstar agreements.

A second message followed.

Maya: I recommend holding off on any price revision until the legal review and technical assessment are complete.

Damian replied that he agreed.

Then he opened the Brightpath folder again.

He had another question for Oliver, one he hadn’t asked during their call.

If the company had been profitable for years, why hadn’t Oliver invested more in development himself?

Maybe he hadn’t had the money.

Maybe he had preferred taking profits over expanding the business.

Or perhaps the product was more expensive to improve than the initial documents suggested.

Damian didn’t know yet.

He would ask.

He slipped his phone into his pocket and looked at Ethan, who was now trying to convince him that buying a new game console counted as a business expense because gaming improved reaction time.

"Absolutely not," Damian said.

"You didn’t even let me finish."

"You said enough."

"You’re becoming a terrible rich person."

"I’m trying to become a responsible one."

"Same thing. Terrible."

Damian shook his head, smiling as they headed toward the car.

For the first time since the acquisition discussions began, he wasn’t in a hurry to make a decision.

Meridian could wait for its legal answers.

Brightpath could wait for its customer interviews and technical review.

He had the money. He had time to learn. And he had no reason to pretend that spending millions of dollars was proof he knew what he was doing.

Tomorrow, he’d keep digging.

If one of the companies proved worth buying, he’d make an offer.

If neither did, he’d walk away.

Simple enough.

At least, that was the plan