Business sellers making $1-$5M in annual profit.
We only invest in industries we feel comfortable in and with people we feel comfortable doing business with. Our typical acquisition is in either manufacturing, construction or business services.
If you are interested in doing business with us, fill out our contact form.
At a minimum, we’ll need to know a bit about you and about your business as well as looking through your past 3 years financial statements and asset list. If we believe the business is a fit for us, we’ll be in contact within the next week.
Our typical deal structure is in 4 parts. We pay a down payment, a note over 3-5 years, a royalty while you continue to run the business and ask that you retain a piece of equity.
Depending on the performance of the company, sellers are often paid above fair market value for their business.
We never acquire a business to sell the assets or lay off the staff. Quite the opposite, we continue to pay the employees salary and reward key personnel with equity in the business.
If you would like to pursue 100% cash offers, we are not a good solution. However, we have found that cash offers are extremely rare in the lower mid-market and believe we provide a very attractive alternative.
An investor could buy a $25M apartment complex for the same cost as a $5M construction company. This is why cash offers just don’t make sense to buyers in most cases.
We ask that sellers continue to run the business for at least 6 months after our acquisition. This will give us time to put processes and people
We ask that sellers retain a portion of equity as part of their compensation. This is so that we can be assured their interests are aligned with
Read more about this on our equity compensation post.
No. We never take a salary from our acquisitions. We will own a portion of the equity (50-70% in most cases) while the seller and business employees own the rest.
We are only compensated by taking shareholder distributions from net profit.
Yes. If you would like to stay on to run the business for another couple of years, we are typically okay with that and will even pay you a royalty
while you operate the business.
However, if things were to go south, we would have the right to remove you.
No. there is a market for investors of distressed businesses, but that is not what we do.
Yes. We will acquire the business and all of it’s assets. This includes and real estate that it owns and any real estate that it leases from an owner.
Yes. In our typical deal structure we are contractually obligated to pay you a down payment, royalty, seller note and shareholder distributions.
Of course, if the business performs better, both the royalty and shareholder distributions will be higher than if it performs poorly.
If for some reason we are unable to meet our obligation in paying you a down payment and sellers note, you would get the entire company back.
Go ahead. If you feel the need to consult your lawyer or a broker before making a deal, go for it. Our offer won’t change.
You can do that. The employees likely know how to run the business and could pay you off over the course of 5 years or so.
We believe we have a better alternative to this by brining our capital, management skills and connections to help operate the business. We
will also grant a portion of the equity to the employees in most cases.