“I’ve invested $300,000 over 4 deals in the last 18 months, and I don’t know what’s going on.”

I had a conversation about this problem with an investor the other day.

This investor writes checks into small business acquisitions.

Medium check sizes, usually $50k - $100k.

Anytime they invest in a deal, they go through this experience:

- Build a relationship with the sponsor, make sure that they are a competent, high-integrity person
- Investigate the acquisition target, make sure it fits their criteria
- Create an agreement with the sponsor
- Sign docs, wire money
- Gets 1 or 2 quality post-acquisition updates, then communications fall off...

With most of these deals, investors aren’t getting as much information as they’d like from searchers as they operate the business.

There’s a big communication gap.

And it’s not the sponsor’s fault, it’s just very common for the early days of an acquisition to be drinking from a firehose, preoccupied with running the company they bought.

And this is just one problem, “lack of visibility”, for an investor who wants to know about the business they just wired $100k for.

This lack of visibility is just one symptom behind a whole tangled mess of problems.

For example, what if an investor wants to invest in multiple deals?

How can they reasonably deploy capital without knowing whether their bet is paying off in real time?

If they don’t know how their first 4 investments are doing, how are they supposed to have confidence in the next 4? Are they left guessing?

Or maybe it’s a smaller investor who cuts 1-2 checks per year and this isn’t their full time thing, how can they run a sophisticated investment process without being an experienced investor?

Or when their sponsor approaches them seeking advice or questions, how do they know what advice to give without the full picture and context of the company’s finances?

Or how do they know they can trust that the businesses' bookkeeping is accurate?

Or in the worst case, how do they know that the sponsor is being honest with them or not?

At this moment, there are not great answers to these questions.

But this is what we’re trying to build at Mainshares.

Our goal on the investor side is to make managing multiple investments easier, give more insight into financial performance, and help standardize governance.

SMB Investors are not currently equipped to handle the next 10 years of investments into this space.

We’re here to help them (AND their operators!).