Michael

SMB & ETA Equity Investor | Arden Clare 🏗️
Investing in elite operators in the boring economy.
🛠️ Niche Businesses, MHP.
🔗

[Michael @mroventures]

How LMM deals get financed: SBA 7(a) loans, seller financing, search fund equity, ind. sponsor capital, or a blend. Most LMM deals use 2–3 of these together. Know your options before you're under LOI. #ETA #DealFinancing

[Michael @mroventures]

QofE isn't an audit. It's a forensic review of whether the EBITDA you're buying is real and recurring. In the LMM, sellers add back everything. A good QofE tells you what's real. Never skip it. #QofE #LowerMiddleMarket

[Michael @mroventures]

LMM DD basics: financials (3 yrs), tax returns, customer list, contracts, employee roster, lease, equipment, pending litigation. Most deals die in diligence. Know what you're buying before you close. #DueDiligence #ETA

[Michael @mroventures]

The LOI (letter of intent) is your first formal offer. It sets price, structure, exclusivity, and timeline. It's non-binding — but it sets the tone for everything that follows. Get it right. #LOI #ETA #LowerMiddleMarket

[Michael @mroventures]

Best LMM deal sources: business brokers, direct outreach, accountant/attorney referrals, industry contacts. Most good deals never hit a marketplace. Proprietary flow = competitive advantage. #Sourcing #LowerMiddleMarket #ETA

[Michael @mroventures]

@realEstateTrent Could it be Lehman or double Lehman? I don't know if they do that with retail centers.

[Michael @mroventures]

@mhp_guy It would not work. The G550 is a time machine. It departs when you want with your team. However, the seats are not as cozy as business or first class on an airline. Once you schedule routes, the Time Machine factor disappears and the airline is the better experience.

[Michael @mroventures]

@Sam_Rosati It’s all about the optics of how you frame it.

Banker: "Do you have HVAC experience?"

❌ "No." "No, but I managed 250 people on a Fortune 500 factory floor driving peak US production."
Lenders underwrite leadership and operational risk, not tools.

[Michael @mroventures]

@SMB_Attorney I see its a bankruptcy. In the past I was following a receivership for a mismanaged fund gone fraudulent. it seemed the receiver could charge whatever it wanted because the investors were too small to pursue any legal action on their own. Wonder if this is similar.

[Michael @mroventures]

@Codie_Sanchez Great game plan! That's what we do. Lather, rinse, and repeat. It gets easier on the repeat.

[Michael @mroventures]

@girdley In the old days before the internet, I recall seeing nicely dressed guys photographed in front of the Rolls Royce and Lamborghini parked in front of the Mansions - probably rentals. Most wealthy SMB ETA guys don't have that vibe.

[Michael @mroventures]

@girdley I actually know of people who have done this and I know they do not own the jet. You can pay a small rental and get photo time in the jet. There is a jet where I live in a field for a Halloween haunted hayride exhibit. That could be the "photo jet." Nice to meet you at SM Bash!

[Michael @mroventures]

Our ideal LMM deal: recurring revenue, low customer concentration, owner ready to exit, sticky product or service, and an operator we'd bet on. Simple criteria. Hard to find. Worth the wait. #LowerMiddleMarket #ETA

[Michael @mroventures]

ETA = buying an existing business instead of starting from scratch. You inherit revenue, customers, and staff. The hard startup work is done. Your job: grow what's already working. #ETA #Entrepreneurship #LowerMiddleMarket

[Michael @mroventures]

Independent sponsors find deals first, then raise capital. No fund, no clock, no forced exits. They earn carry by doing the work — sourcing, diligence, operations. We love backing great ind. sponsors. #IndependentSponsor #LowerMiddleMarket

[Michael @mroventures]

A search fund raises capital to fund a 2-year acquisition search. The searcher gets a salary + equity. Investors get first look at the deal. It's the original ETA model — and it still works. #SearchFund #ETA #LowerMiddleMarket

[Michael @mroventures]

@ElliottEHolland @HarvardHBS Great that we have such qualified technical talent dedicated to the SMB ETA space. This is one area you cannot mess up unless you like to buy bad deals.

[Michael @mroventures]

@BoilerPlateCPA Agreed 100%. Sometimes you have to hire before needed and delegate even when not necessary. I found a good practice when somebody asks is rather than answer, make sure the SOP has the answer and direct them to that, otherwise, rewrite the SOP with their input.

[Michael @mroventures]

@KrissBergTweets Pilots have to practice and remain current which is very expensive. Those who own an aircraft can donate their time flying dogs and get their practice completed while allowing a tax writeoff. I would guess without the writeoff, the dogs would not fly as much.

[Michael @mroventures]

@Joe20885855 @BoringBiz_ We have had those those who were not performing as, but they showed dedication and commitment and loyalty. Those qualities are hard to get sometimes.