When building a company, finding progress in the failures is a struggle. Hindsight is 20/20, and it can takes years to see it. Writing has helped me see progress. Going to share stories that helped me, hopefully it will help others that are building too.👇

Your uncle, who worked as an M&A attorney for 30 years, listening to you explain how you learned from a Twitter thread that anyone could buy a $3 million business with no money down and start making $500k a year with almost no risk

Met with a "family office" in Vegas to pitch my company (we're raising a round right now) Showed up at the guy's house (red flag #1, even though it was a very nice house) to pitch my company. He made a point to show me his motorcycle collection and photos of his wife (wtf?) Completely dark inside. All the blinds drawn. Two other people I don't know are in the meeting, and they don't introduce themselves (another red flag) All I know about these guys is that their website says they're a family office that leads investments with other family offices. Usually family offices have super vague websites, so I didn't pay much attention to it. But their site clearly gives the impression that they have capital to deploy into private companies. I go through my pitch and they seem interested. Then they take me out to their country club for lunch after the pitch. "We really like this deal. Let's do it, we can't wait to work together," were their parting words. The next day, I get an email from them. Not a term sheet or anything like that. A proposal. Turns out, they are some fundraising service (even though they call themselves a family office). For the low price of $35,000 per month, they'll work on raising the round for me. And I'd have to continue paying that $35k in perpetuity as long as the company exists. Has anyone ever seen such a crazy proposal?

The best job in North America appears to be a moderately successful AE at a SaaS company. These guys are all looking for guaranteed $200k+ and almost all of them hop from company to company every 18-24 months. What am I missing here?

The MBA who just purchased a Midwest plumbing business leading his first all-hands meeting with the team (they have no idea what he's talking about)

"How did you know I'm an Ivy League MBA working on a search fund to acquire a Midwest plumbing business?"

You are a settler that just arrived in Buffalo, NY circa 1852. Winter rolls around. You survive. Why do you stay?

"So basically I'll buy a boring service business at 3x EBITDA. Boomers are retiring like crazy and selling their companies. Then I'll implement some technology to streamline operations. Then I roll-up competitors. And boom! I sell it all to PE for 6x EBITDA"

I love Berlin, but sometimes it’s like Pyongyang and New York had a baby.

At least once a week I think about this image and it gives me peace.

New acquisition, an employee asks for a 80% raise with 0% increase in responsibility. They are a key member of the team. What’s your move @girdley @BillDA @markbrooks ?

Bought an HR software company doing $1.55 million in revenue a year We'll cross $2 million in sales the first full year after the acquisition Here's the story:

"Hey rockstars! Make sure to stay engaged in the Metaverse office today. If the entire team goes all day without taking their headsets off, we'll serve virtual pizza at 5:15pm!"

Most people are thinking about business acquisitions wrong I worked in private equity for years and bought a software company last year Here’s how to think about buying businesses:

People are paying 10x adjusted EBITDA on software deals doing under 500k in revenue. Don’t you people know you can get get into gutter cleaning for 2.5x?

EU missed opportunity here. If I were Spain I would have offered residency to any Ukrainian tech workers or companies with no taxation for 5 years. They should have done this a month ago.

I won't announce when I roll up every Midwest HVAC servicer for 3x earnings and flip it to private equity for 5x, but there will be signs

I asked AI to create an image of a company that's also a family

I’ve seen a lot of this weird stuff…this was the weirdest angle. The contract even said, they were the ones that would invest. So basically they find LPs or something then charge you.

It only cost me a flight to Vegas!

Uhh you got any gum?

Bought an HR software company doing $1.55 million in revenue a year Streamlined some aspects of the product and worked on sales (which the previous owners hadn't done much of) Will cross $2 million in sales the first full year after the acquisition

Getting @microacquire'd is your dream? You think selling your SaaS will lead to a life of daiquiris on the lazy river? Don't start counting your ARR multiple on two hands yet. Here are some financial mistakes we see founders make that could torpedo valuations . 👇

I assume the initial math done by the Bahaman counterpart looked like this

One of the greatest football coaches of all time left after 17 years and was replaced within 48 hours Yet most HR organizations need a full week to review a job description and post it online

We created a sales process that gets a ridiculous response rate (something like 30% on cold messages) It's helped us increase revenue from $1.55 million to over $2 million in a bit more than a year Here's what we do:

LOL. That would have been fitting. If I was a woman I probably would have picked up on the scam faster.

Expert copywriting.

Wife enters the kitchen: “You haven’t even started cooking dinner? What are you doing? Me: “I’m researching an investment.” Wife: “On twitter?”

Flight attendant: Is there a doctor on this flight? Dad: That could have been you Me: Not now, dad Dad: Not asking for a "search fund operator" are they? Me: Dad there’s a medical emergency Dad: Go and see if they need some due diligence help

There is only one piece of advice I feel qualified to give: Stop watching the news.

Kudos to the new ghost writer @girdley hired. The guy is on fire.

You've been lied to Demand for SMBs is not actually skyrocketing like many say Median sales price of businesses listed on BizBuySell = $350k in Q4 of 2023 Average multiple = 2.55x cash flow Multiples are basically flat since 2021 and up only 7.5% since 2019, or just 1.85% annualized (way less than inflation, and not nearly as steep of an increase as I would have expected to see given all the talk about an SMB buying frenzy on Twitter.) There always have been and always will be a glut of very small businesses for sale at miniscule multiples Why? The lowest multiple businesses are just small businesses ($350k average sale at 2.55x cash flow implies $137k in annual cash flow) There is limited demand from buyers for these types of businesses. That's not to say there aren't great opportunities within this set of businesses - there actually are thousands of life-changing opportunities for sale below $350k for the right person. But the fact is, these small businesses will never trade like PE-backed companies or public stocks. You can't simply buy one of these businesses, allocate some capital, and watch it compound. The bottleneck isn't decent businesses for sale. There are plenty of those, and there always will be. The bottleneck is skilled operators willing to dedicate a couple years of their lives to buy and grow these businesses. Especially while everyone else is focused on starting a SaaS business or rolling up an entire industry, there is an enormous opportunity for skilled operators to buy a solid but stagnant small business for $350k, focus on growing it for a year or two, and enjoy the fruits of their labor after doubling or tripling the business. Buying at a low multiple is a gift for the buyer. But the tradeoff is that you'll need to absorb yourself in the business and operate it for a year or two (or more) before you can actually begin scaling it. You won't hire a full-time operator with $137k in cash flow, unless you want to be in the red. If you want to get started owning and building businesses, you can write your own ticket to success by playing in this arena of small businesses that no one else is bidding for.

3 year old decided her new @Nike shoes weren’t interesting enough.

In 2010 I left my finance job to travel across Europe. I spent 6 months bouncing around @Airbnb apartments. Until I rented a studio on a tiny, roadless island. Lopud, Croatia. This is a story that won't show up up on the $ABNB S1.

You had me at collateralized assets!

This is why 15 days per year of vacation is abusive.

Never underestimate how much 1-2 people saying “screw you” to management can tank a small company.

Search fund operators will pay themselves a $250k annual management fee and buy this setup just to scroll BizBuySell for 10 hours a day

The whole interview seemed pretty unhinged, and whiny. I don’t get why people are praising him.

All hail @JohnBelitsky, emperor of the meats. My first truly memorable food experience post-COVID. Now you know where to eat the next time you are in Barcelona @BrentBeshore @girdley bookmark this place for your visit. Unless you have high cholesterol.

It’s a CIM for a port a potty company in Akron, Ohio

The OpenAI board after watching their decisions play out over the last 72 hours

I want to build the habit of writing. When I saw @dickiebush and @stewfortier post about the 30 for 30 challenge it felt like the right moment. Here is my first micro essay about why I will be writing every night over the next 30 Days.

We are negotiating the purchase of a SaaS that does 100% pre-paid annual contracts. Seller argues that due to long/costly sales process, all pre-paid revenue should be his. We argue it should be split over months, and subtract the CaC. Any experience solving this?

You ever seen spinal tap?

That’s my thing though, the top guys are probably 10x under paid. The rest, Why are they getting paid 100-150k to do this? They should be paid a draw until they can prove they can stay with a company more than a full sales cycle. How has the market allowed this to happen.

I acquired Lanteria, an HR software business, in June of 2022 At the time, TTM revenue was $1.55 million Through our first year ending June 2023, revenue was $2.01 million Here's where the business stands:

All my investments are with my wife. I'm drafting an investment plan to work with my parents/Siblings. I know, this could be a bad idea! How would you structure contracts, and LLC? Different asset classes? Day 20/30 is about being thankful, and having good problems.

The Ivy League MBA on his first day as the new owner of a plumbing company having to learn what a "basin wrench" is

Can we sue companies who call this a "dynamic, energetic workplace" for false advertising?

The Cheesy Gordita crunch.

Bought an HR SaaS business in June 2022 for $1.55 million (1x revenue) Closed the first full year (thru July 2023) at $2 million in revenue Ended full year 2023 with $2.2 million in revenue I don't see why we can't keep increasing revenue. Huge opportunities in sales/marketing

Anyone else feel totally judged by the handy man fixing stuff at your house? I know the dude at my house right now is thinking “look at this loser on his computer, can’t even install a light.”

The easiest way to raise capital? Build up your network before you need the capital.

I can’t sit still for calls. When I was cold-calling investors back in 2019, I would walk around the park in front of my house late at night. Anyone else like this?

I sent @chriscantino a stream of consciousness this morning about DTC brands shifting to a franchising model. I thought I would organize my thoughts. Looking for @web @KatColeATL to find more holes. Day 18/30 DTC franchising

"We are a value add investment group, looking to acquire B2B software businesses, with 50-70% EBITDA margins." What kind of value do you add to a 50-70% EBITDA margin business?

Following the @girdley rule, giving away more half baked, not best ideas on day 12/30. Software development Rollups, I know @awilkinson has bought up agencies. Seems like an interesting opportunity. Lookig forward to seeing why I’m wrong.

1/ After 3 years of running shit ads, @CommnThreadCo @TaylorHoliday and @A_at_admission have thrown me a bone and welcomed me into the Admision community. I'm going to use this thread to share SOME learnings. Community: youradmission.co Agency: commonthreadco.com

During dinner with @TropicalMBA he asked me what my ideal day would look like. Without much thought, I replied with “I would just go to the driving range and hit balls all morning then play a round in the afternoon ” Dan: “Well… why don’t you do that?” Me: “I can’t just do that” Dan: “I work from the driving range, why can’t you?” Definitely got me thinking… So, maybe I’ll make it my goal to eventually do business from the golf course 🤔 Is this pipe dream even a possibility?

If you're a skilled operator who can increase the EBITDA of a business, you can basically write your own ticket There are so many options for finding businesses for sale these days and dozens of ways to finance acquisitions without putting much of your own money down

Day 17/30: debt, dad, and opportunity. How do you view low interest rates? How do your parents view them?

I have a buddy that is a CPG generalist ops guy with experience scaling business $0-$20 million. He is looking for roles as a hired gun in ops/finance/supply chain at pre-funded CPG startups. DMs if you want his contact.

Just closed 2023 books and we hit most of our goals: ✅ Revenue up 40% YoY ✅ Operating Profit ✅ Over $2.2 million revenue ✅ New CTO hired ✅ New Marketing Director hired Losses: 💩Lit $100k on fire paying employees we should have fired earlier 💩Didn't complete fundraise

I combined 2 popular themes from Twitter: 1) Buying a Boring Business 2) Scaling a Software Business Here's what I did:

I love the quote Buffett said to @BrentBeshore “Price is my only diligence.” Unfortunately I know a lot of VC’s in Europe that apply this same method to early stage companies. They would invest 500k in a roll of toilet paper if it gives them 25% equity.

What software do you use to manage LP documents, communication, investor back office? @Tylertringas @Kevin_McArdle @BrentBeshore @BartMacdonald @girdley

This is an amazing post about cold emails by @theSamParr trends.co/video/cold-email-l… If there is one thing people should do, get good at finding and cold emailing.

Owners of independent plumbing businesses after the invention of search funds

Thank you @TihoBrkan for spending 90 minutes with @AmeetM and I today talking shop. Tiho’s global view across the public/private markets is amazing. Hoping to hear more in the future!

I have about 18 months, then I will lose interest and be looking for another person to talk to 😂

$2000 in 2011 Bitcoins. 😭

I’m 35 on the number. Very excited for what could come. Cant shake the feeling of a total collapse being more likely than ‘08 this time though.

Guys will discover the concept of a Search Fund and then start talking like this 3 days later

When your wife is an artist. Going on a hike with your kids can be a bit weird.

Technically this is how marriage worked around the world until Hollywood ruined all the fun.

Every deal on Flippa.

Small-scale PE investing is all about buying businesses below $5m in revenue, scaling to $10m+ in revenue, and selling it You profit in 2 ways: Higher profit = higher exit price And larger business = higher multiple upon exit Easier said that done, but that's our model

I raised money to buy a $2 million software business and I'm in the process of raising a larger round now Here's what I've learned so far about fundraising: Raising a large amount is the same amount of work as raising a small amount. Initially my goal was to raise $1m to accelerate growth for Lanteria, the software business I mentioned above. We've grown revenue ~30% in the first year since buying the business, so I want to raise more money to accelerate sales and marketing. Competitors in the space with similar products are in the $25m range. While raising the $1m, I chatted with a few PE groups who liked the idea, but needed something larger to invest in. They wanted to participate in a ~$20m raise and asked for what that might look like. With more funding, I could grow Lanteria and also pursue 2 or 3 similar companies as bolt-on acquisitions. Both the small and large raises are still in negotiations, but neither one has been much harder than they other. The larger one would be harder to execute, of course, but there would also be more funds to hire skilled people to help. Know exactly what you'll do with the money. I see a huge opportunity for Lanteria to tap into the Microsoft ecosystem for sales and marketing to grow our user base. We know exactly who we serve, and because we operate within the Microsoft 365 ecosystem, we have access to millions of users who would instantly trust our solution. The more specific of a picture you can paint for how the funds will be used and what the results will likely be, the closer you can get them to committing their capital. Cold outreach is a long road. Spent a bunch of time running a cold email campaign to 2 groups: Family office and angel investors/search investors. Family offices didn't bother to open my emails (12% open rate). But angels/search investors did open my emails (69% open rate), but not much came of it. Making a cold outreach and warming up a prospect for a sale is one thing, but it's an entirely different animal to cold email someone and ask for $250k. I'm still working those leads, but it seems to be a long road to get someone to invest from a cold email. Personal connections and warm intros are still king.

Americans make fun of European vacation culture. 22 days of vacation per year, but most companies ask you take those days in August/Christmas. The best memories I have with my kids, are from the 2-3 weeks we spend together every august.

This is a great article form @smdiehl about regulating crypto. This is great writing: “The fintech revolution happened, it just happened abroad while Americans were hypnotised by libertarian fantasies of selling magic beans to each other.” stephendiehl.com/blog/banbit…

Bought Lanteria, an HR software company, about 2 years ago for 1x revenue ($1.55 million) Since then, we've grown revenue to about $2.3 million in revenue Now we're looking to add more HR software companies to our portfolio

Love the random pairing. Last week I got paired up with a guy who runs the oldest company in Spain. Started in 1497, 21 generations have run it. Guy rolled up several cava producers and sold it back to the family business before taking over. Recently sold 51% to PE firm.

Job description: Work in a fast-paced, entrepreneurial environment! The environment:

At least once a week I think about this image and it gives me peace.

I politely told them no. You know they are scammers when they don’t even try to push back on the no. Never heard from them again.

I'm still best friends with a group of 8 guys that I met in the first grade. Growing up around them, you could definitely tell they were intelligent. I remember one of my friends, Tom, was always reading Tolkien books… in the 3rd grade. We all played sports, but we weren’t competitive with each other. I never wanted to compete with them, however, there was always this burning feeling inside me where I felt the need to be “better”. What am I interested in? What could I be good at? What was MY thing? This feeling drove me to continually work on myself. Now that we’re older, we don’t mention what we do or how much money we make. We don’t compete either. But we certainly keep up with each other. It goes to show you that who you surround yourself with matters. Grateful for those guys!

Guide to being "authentic" in 2024: Waking up at a normal time. Taking normal showers. Doing work. Eating moderate amounts of food that don't make you fat. Answering emails timely. Doing stuff with family and or friends. Don't let @huntercoldcalls tell you different.

HubSpot is too expensive IMO to accompany small companies as they grow. They do a great job with 90% offers for startups, but only 12 months. Then it starts to become a big ticket item. Also still requires hiring a pro to actually make it work well for you.

Why I like acquiring businesses: Building a company from 0 is extremely hard. Taking a $2m/year company and building it into a $5m/company is also hard, but not nearly as hard as building a startup from 0.

Yeah it was pretty easy for us too. Our kids basically demanded it at 18-24 months and took no time.

Entrepreneurs of America, I give you.... broth vending machines. Time to build.

1st Business: Tries to do everything 4th Business: Tries to do nothing.

Or just keep making bank. Don’t get sucked into the management vortex if you are a sales master.

I looked at about 2,000 deals before I found the business I bought Bought that company for 1x revenue, which was a great deal But it took the practice of looking at thousands of others deals to be ready to execute on this deal

An often overlooked aspect of due diligence in acquisitions: Investigating the founders’ background(s).

My alter ego is now famous. Enjoy the show!