Adjusting search model for mid-career/hyper-local
October 17, 2023
by a searcher from The University of Chicago - Booth School of Business in Santa Cruz, CA, USA
Hi -- I'm very excited about acquiring a small business though I don't think I fit the search model.
Me: >10 years post MBA (Booth), as consultant and diverse large company tech experience. IMHO, my work (and life!) experience makes me much more operationally savvy than me of 15 years ago (though I fully realize the different challenges of a small business). I work FT, but it's pretty chill and I can dedicate 10+ hours per week to search
My target market: I want to stay very close to my current (and beloved) hometown. I am in a smaller geo (100K) just outside of the Bay Area. Listings here are generally small, and are restaurants, cannabis, or skilled trade services, none of which I feel like reliable revenue streams. I am reached out to friends who are well networked CEOs in the community, but no obvious leads. there are a couple of brokers that I have synced with.
Finances: thinking 150K myself plus perhaps 150K friends and family. Targeting 300-500K SDE redacted price.
My thinking is that this is just going to take a long time, to wait for the right opportunity. I'll keep on networking, and starting reaching out proactively. I honestly don't think I would be any more successful doing this full time, or with investors. (I would benefit from the coaching though) It's a little odd doing this publicly while working an unrelated job, so I am being targeted in my networking
I'm also staying open to other options based on what opportunities present themselves: growing a smaller acquisition, multiple sequential acquisitions, or perhaps building.
What do you think - can this model work? What can I do to improve my odds?
from California Polytechnic State University in Oakland, CA, USA
I've found that it's a matter of broadening out in terms of types of companies. The geo filter really constrains the deals and you can't further limit it by also ruling out industries. I used to have hard lines and no-go zones like restaurants or laundromats, but I've been rethinking some of my hard-nos after 6 months of not seeing a ton of opportunities that I initially wanted.
Also I'm contemplating going even bigger, maybe just find the deals and then partner with one of the many equity raising companies out there that are looking for deals and operators in later stages. Take a smaller equity footprint but get in the deal. Also eliminating that personal guarantee hangup from SBA isn't a bad deal either ...
from The University of Michigan in Portland, OR, USA
From what I’ve heard anecdotally, I think perfectly possible, though could be a fair amount more difficult due to smaller geo search and while holding down full time position.
However it’s all about fit. If you can lead a search over time with disciplined outreach, there’ll be a seller who appreciates your seasoned background (vs, say, the more quintessential searchfunder: lesser experienced immediate post MBA grad) and the fact that you’re dedicated and settled to the local market.
Best wishes and would love to hear how it all plays out.