About Me
My background
I'm a self-funded buyer looking to acquire a NC-based business that generates $300K-$1.5M cash flow per year.Over the past 15 years, I've worked in sales, operations, and finance roles in Tech, Commercial Banking, and Consulting.I'm looking for a strong culture fit between me and the owner where my skills could be useful as an owner-operator.
My Experience
10+ years experience in Tech and Commercial Lending
Led 30+ person Sales and Operations teams
Underwrote $2-10M commercial debt facilities to tech companies
Acquired 5000+ single-family homes for Divvy Homes
From a family of small business owner operators
Based in Raleigh, NC
What kind of business?
Targeting businesses with $300K-$1.5M in earnings
I'm looking to acquire a business with steady $300K-1.5M annual cash flows.The ideal company can benefit from some digital or operational improvements, providing opportunities for employees and the core business to grow.
$300K-$1.5M EBITDA/SDE
Based in either (1) the Raleigh-Durham Triangle, or (2) Wilmington-Brunswick County, NC
B2B or B2C, provided minimum 25% repeat customers for B2B
Limited customer concentration; ideally no customer over 25%
Ideally in business for >10 years
Sample industries: Commercial Cleaning, Pet Services, Wholesalers, Licensed Home Services (electrical, plumbing, septic, elevator)
Deal Terms
Sample Deal Terms
I'm utilizing the SBA 7(a) loan to finance a portion of the acquisition.Most SBA loans follow a "70/15/15" up to a "90/5/5" structure, or any combination in between. In other words, the SBA typically finances 70-90%, the Seller finances 5-15% via an amortizing Seller note (i.e. similar to earn out), and the Buyer finances 5-15% with cash.SBA loans typically amortize over 10 years. The Seller's remaining 5-10% seller note is paid off after the SBA loan is paid off -- which can take up to 10 years, depending on the business.
Assume a $500K EBITDA business:
$1.75M purchase price (assumes 3.5x multiple)
$1.58M paid to Seller at close
$88K remaining Seller note, paid down gradually; subordinate to SBA
Financing contingent
Due diligence contingent
Timeline
Transactions usually take 60-90 days to close
Before a Seller can receive an offer, the Seller or his/her broker typically put together a CIM (confidential information memo) -- a brief marketing document that provides buyers with enough information upfront to determine if a business is a good fit.After a few conversions with the broker, a conversion with the Seller and/or site visit, the Buyer will send the Seller an LOI (letter of intent), which will come with a 30-90 day exclusivity period.During that exclusivity period, the Buyer will conduct due diligence and the lender will conduct final underwriting -- similar to a home transaction.
LOI sent
Seller signs LOI; deal enters ~60 day exclusivity due diligence period
Buyer reviews more detailed documentation; gets tighter loan approval
Start drafting legal docs
Buyer talks to customers, vendors, employees (when and if appropriate)
Buyer might conduct QoE (quality of earnings) study -- similar to an audit, to confirm the financials match performance
Due diligence contingency removed
Bank completes underwriting, financing contingency removed
Deal closes
Why mE
Founder legacy intact
In addition to offering competitive terms, I want to see a Seller's legacy remain intact after selling the business.I'm looking to build a business that creates fulfilling jobs for employees, provides a great product for customers, and still offers strong investor returns.While financials are important, I believe the integrity of a founding team and good rapport between Buyer and Seller are prerequisites for the right deal.
