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.
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.
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)
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
Due diligence contingent
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.
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
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.