Organic + Inorganic Growth

SMB/ETA | Organic + Inorganic Growth
Head of Growth at LMM PE Firm
Proprietary Outbound
Growing two 7 fig companies to mid 8 figs in 36 months
Former D1 Athlete

[Organic + Inorganic Growth @SMBandCRE]

@TheSalonDon Encourage him to join some type of recurring class like OrangeTheory or F45.

It’ll build slow momentum, discipline, and self confidence. And a community outside of parents.

Over time this can lead to more positive larger steps like getting a job.

[Organic + Inorganic Growth @SMBandCRE]

A slightly higher earnout.

Seller was 2nd gen and attached to the idea of being out of the biz. Not sophisticated. Didn’t understand his accounting and a lot of the financials - was relying on his outsourced bookkeeper.

Will keep y’all updated to see what skeletons (may) pop up

[Organic + Inorganic Growth @SMBandCRE]

This sounds fake, but just closed on a $1M avg EBITDA business for $800k Cash ($1M cac w $200k holdback).

Proprietary - I cold called the seller maybe 10x, leaving good non-annoying apple preview screening messages until he picked up.

It did have some hairs. More on that below.

[Organic + Inorganic Growth @SMBandCRE]

We didn’t like that majority of revenue was sourced through reoccurring channel partners subbing out work - which limits our potential pricing power.

Offered $1M CAC and some earnout thinking seller would walk away and have his face melt.

Guy took the deal with one request..

[Organic + Inorganic Growth @SMBandCRE]

@SMB_Attorney LOI

[Organic + Inorganic Growth @SMBandCRE]

@MSUKyleBrown @PEoperator It may be up or down <$100K, but both consistent.

Goes in line with the seller motivation. Not looking/inspired to grow. They’re happy with lifestyle / Maintaining.

[Organic + Inorganic Growth @SMBandCRE]

@MSUKyleBrown @PEoperator Consistently generating that ebitda figure annually, for 7 straight years and 3 straight years, respectively

[Organic + Inorganic Growth @SMBandCRE]

@PEoperator 2 - major MSA. Biz $1.4M ebitda last 3 yrs. Founder ~70 w bad health issues. Daughter running it last 7 yrs but wants to prioritize raising a family.

Key has been building genuine relationships over 3-6+ mo’s. Owners not money-focused, more people focused. Proprietary of course.

[Organic + Inorganic Growth @SMBandCRE]

@PEoperator Ive put two under contract in last 3 months.

Project-based essential service repeat rev, but not contractual/recurring.

1 - pretty rural area. Owner 65 yrs old. Biz $1.5M ebitda the last 7 years. Has a pretty baller house he paid $400k for recently w LCOL area.

[Boring_Business @BoringBiz_]

Pretty convinced that the biggest predictor of financial and professional success is sense of urgency

People who take accountability and move fast come out ahead. Even if you have an incredibly high IQ, laziness will block your path to ever reaching the top

[Organic + Inorganic Growth @SMBandCRE]

@techsalesguy This is awesome! Props to you on ripping the phones!
I had a very similar situation in a very nuanced tight-knit vertical.
They hired a former VP with 8+ yrs experience.
In first 6 months I closed 10x rev in partner channels ripping phones vs her “strategic” method and networklol

[Organic + Inorganic Growth @SMBandCRE]

@c_gro Walsh Blood Panel is what the test is called. Very in-depth and insightful.

[Organic + Inorganic Growth @SMBandCRE]

@MatznerJon @BetterCeo Thanks for doing this. The last 4 minutes on how to reinforce an ops manual/notion into the culture (Both JM's and Peter's way) is really helpful to hear along with the 8 buckets.

[Organic + Inorganic Growth @SMBandCRE]

@coleruudjohnson DM

[Organic + Inorganic Growth @SMBandCRE]

@MatznerJon This is awesome Jon! I always think about that quote from Bill Gates when I try to find an easier way to do something. The evolution from EO is great. Keep it up!

[Organic + Inorganic Growth @SMBandCRE]

@jnortonma Yes yes!

[Frederik Gieschen @FrederikNeckar]

"no time pressure" and seeking asymmetrical risk-return

How a family fortune fades: "when a young boy wants to buy a Porsche or a new house..." "Finally they all wanted liquidity"
The stake they sold is up 27x since

[Organic + Inorganic Growth @SMBandCRE]

@AZ_SMB @SMB_ash Thanks for sharing. This is very insightful!

[Organic + Inorganic Growth @SMBandCRE]

@callicrates_ Have close family member that fits the exact description. It’s all over. Said they’re thinking of shutting down it’s not worth anything.
Started helping out, doing well over $600k net.
By opportunities, did you mean with specifically acquisitions?