The market for small private companies is the least efficient market most people will ever encounter. Prices are negotiated rather than quoted, information is held in one person's head, and the seller's timetable is frequently driven by age or exhaustion rather than valuation.
That inefficiency is real, and it is not free. It is compensation for illiquidity, concentration, and the fact that the buyer usually has to run the thing. This topic covers what is actually being bought — customer relationships, a schedule, a local reputation, a person's replacement — and the recurring ways those turn out to be less transferable than the financials suggest.
