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You started in I-banking and just left your PE fund to pursue search acquisition. You've got a name. If not, try the following recipe: [Color] + [Name of a street you lived on] + Capital. I'm Blue Malibu Capital. Good name, right?
You doctored a pre-built template from Squarespace, a $50 logo on 99 Designs, and a starter G Suite Account. The criteria are locked and loaded. You're looking for a privately-owned business with an owner seeking a successor.
It needs to have $1-3M in EBITDA with mostly recurring revenue and a nice recent growth history - maybe 3-8%/year. It needs strong middle management in place, a nice growth outlook, and a durable customers base - none >10% of sales. No franchises.
Oh, and capital light. It needs to be able to grow without more cash. Ok, you with me?
I'm going to go ahead and do you a small favor... here are a few things most people you've shared your business plan with either don't realize or are too nice to tell you:
I'm going to go ahead and do you a small favor... here are a few things most people you've shared your business plan with either don't realize or are too nice to tell you:
1/ This is not at all unique. There are a lot of people out there just like you with the same exact plan. Most are by all accounts exceptional business people. 30-40% don't ever execute, and it's getting harder every year.
2/ You are fairly unlikely to pull this off. Not that it can't happen... it can and does. But, many smarter and more talented people than you have failed trying. Rest assured, it all works out fine in the end, but hopefully you've been warned.
3/ If you do find something, it will take 2-3 years to find, and you will end up buying something nowhere near as good as you set out for. You will have passed up numerous potentially better companies b/c they were outside your box.
4/ ... 3 years later ... Yay you made it! The value-add work gets to start now! But, you realize that just because you're CEO doesn't mean you're the boss. You actually work for your investors, but need your employees and customers way more. Weird situation, right?
5/ Speaking of weird situations... everyone around you is scratching their heads trying to figure out how you landed in charge having never built a business or even managed a team of managers before. Worse, guess what you're current best skill is? Searching for businesses!
This whole thing seems very inefficient and way harder than it needs to be. Props to the people who've pulled it off, but seriously, this seems like either hubris or masochism.
