Our proven process and strategies supercharge acquisition entrepreneurs.
We help experienced entrepreneurs use an innovative approach and proven strategies to acquire profitable private companies. Our process makes it easier for entrepreneurs to raise investment capital, attract the best talent, close more deals and create significant shareholder wealth, faster than traditionally possible. If you're looking to buy several businesses in the same sector, read on....
How to create significant wealth by acquiring private companies....
In the United States (and other markets), many business owners are in their 60’s, 70’s and older. Their kids aren’t interested in the family business. Their grandkids don’t have the background, skill, or capital to run the business. As a result, there are tens of thousands of profitable businesses for sale and currently, very few potential buyers. On top of that, the cost of capital is relatively high which significantly shrinks the pool of potential business buyers.
How can you capitalize on the opportunity?
If you haven’t already done so, identify a sector that’s ripe for consolidation, form a team to execute a rollup strategy, raise capital, take your holding company public (yes you can, bear with us) and acquire profitable companies. Working with us, you’ll be able to do all of this efficiently and effectively, while retaining substantially more equity in your holding company. We provide significant support and coaching. Our proven strategy has already been used by other acquisition entrepreneurs to create more than $8 billion in shareholder value.
There are very significant advantages to going public and then making acquisitions:
1. Business brokers are more likely to show them businesses for sale because the trust, credibility, and transparency of being a public company generally means the entrepreneur has a better chance of closing a deal, something brokers care a lot about.
2. Business sellers prefer dealing with public companies for the same reasons noted above. In addition, business sellers are often willing to be more flexible in acquisition terms, including accepting stock, warrants, preferred shares, notes, and cash payments over time.
3. Public companies generally find it faster and easier to attract any necessary acquisition financing, working capital and talent to make more deals happen.
4. It’s easier to attract a highly qualified board of directors and build out a strong advisory board.
5. Public companies can often buy private companies for 2x to 4x SDE or EBITDA but as a public company, they are typically valued at 8x to 15x (or more). For example, an entrepreneur can buy a private company earning $1 million for about $3 million, but that business would typically add $8 to $15 million in public company valuation…. $3 million for a private company that’s worth $8+ million in public company valuation. This is a fantastic way to build a business and increase valuations.
Three case studies:
1. A tech aggregator startup was generating around $250k in annual revenue when they sought to expand. Initially, the plan was to pursue a direct listing on a smaller exchange. Through strategic private placements, the startup’s founder leveraged personal and professional networks, along with marketing efforts, to raise $4.5 million. These funds were allocated towards acquisitions and furthering the public listing process. As market conditions favored IPOs, the company shifted strategies from direct listing to a traditional IPO on a major stock exchange, raising an additional $13.7 million. This capital was invested in further acquisitions, enhancing the company’s portfolio and market position over a three-year period.
2. A marketing software firm with $1.5 million in revenue and modest profits engaged in a strategy to go public via a direct listing. The initial step involved a private placement where $100,000 was raised from close associates at a valuation of $3.5 million, primarily to meet the shareholder requirements for public trading. Post-listing, the firm acquired three companies: one for its technology, one startup which didn’t succeed, and another which significantly thrived. The company rebranded, moved to a larger stock exchange, and managed to raise $16 million. Ultimately, it was acquired for $240 million in cash, completing this transformation over seven years.
3. An enterprise information management company began its journey with $2 million in seed funding, supported by a partner from a prominent investment banking firm. After successfully commercializing their technology, they raised $45 million through an IPO. Despite having an innovative product, market adoption was initially slow due to timing. Over the years, the company adapted its strategy, engaging in numerous acquisitions to expand its offerings. This pivot proved successful, leading to a current valuation on a major stock exchange of approximately $10.3 billion, marking a significant growth trajectory over twenty-five years. These case studies illustrate diverse growth strategies in the tech sector, showcasing how companies can evolve from startups to major market players through strategic funding, acquisitions, and market adaptation. million in public company valuation. This is a fantastic way to build a business and increase valuations.
Is this for you?
We seek sharp, growth-oriented entrepreneurs with a knack for acquisitions. Candidates should have C-Suite tenure, a broad network, lead acquisition roles, and financing experience to excel in acquiring or positioning for strategic private company takeovers.
Next steps:
If your track record includes the acumen and resources to leverage our sophisticated strategies for superior execution in acquisitions, reach out to us. Your expertise could be the key to unlocking new market opportunities.