Nathan, I look forward to chatting later this week.

Nathan - here are some resources I found helpful as a starting point: HBR Guide to Buying a Small Business (Ruback and Yudkoff), Stanford GSB's Center for Entrepreneurial Studies publishes a Search Fund Primer and maintains a search fund data set, and Jim Stein Sharpe at HBS has a popular search fund blog with a wealth of information about all stages of the process. You can easily google any of the above.

Hi Nathan! I left the Navy in 1994, got an MBA, and promptly failed in a startup! 20 years later, after a couple of recessions and market gyrations I sold a company and came out OK. So it was a bumpy ride for me, but it turned out just fine. Here are a few bigger picture points I picked up along the way:

1. Startups are extremely risky. Most fail despite qualifications, funding, whatever. I firmly believe that buying is generally a smarter move. "New" is hard. Some people thrive on that, some don't.

2. Every business / industry can be broken down into some simple formulas, metrics, whatever that will tell you whether what you're looking for is a good deal or not.

3. You can't outsmart the rest of the world, it's too big. If an industry is sinking, think long and hard before getting into it.

4. The Harvard book, "Buying a Small Business", and Deibel's "Buy Then Build" are good places to start. I'm not such a fan of the Stanford Search Fund Primer, but it does contain good info.

5. Most military guys have an extremely strong sense of obligation to others. Business is more like gambling in some respects. Put your money down and take your chances. If you do not think you will be OK telling an investor that you've lost their money, don't take their money. Think carefully whether you will be able to fire employees. I can't tell you how many startups I've counseled who just can't walk away because of perceived obligations that are not, in fact, real.

6. Lot's of former military officers are terrified of not having a government check every two weeks. They'll defy death flying jets through the mountains at 200 ft in the middle of the night without a second thought. But take away that regular check and they shake in their boots. In my mind, this is a kind of slavery. But you have to think hard about how you will really feel about that.

7. Time is the ultimate limited resource. I wasted years in endeavors that I had little faith in. If it's not working get out and use your time in a better way.

I don't know your education or experience so this may be wrong. But my advice is to buy something fairly small, set a definite timeline for exit, get experience running it and chalk up a win. You would be surprised at how well you can do financially when you own the whole thing. Plus, smaller businesses don't sell at high multiples making it easier to win. Move up the food chain, if you want to, after getting some management experience.

Great tips Patrick! I retired a year ago and then immediately purchased a franchise development package. Quickly learned the downside to most retail franchise programs is that it is really a race to put as much commercial real estate under contract as quickly as possible. Unless you have the capital backing to support 5+ significant leases then the operations factor is minor. Definitely agree with the recommendation for Buy Then Build, great book and definitely my next plan.

Yes. I’ve wasted some time looking at franchises too. I believe there are good ones out there but I didn’t find one. Most look like Ponzi scheme’s to me and have limited franchisee upside. And there are a ton of horror stories.

Patrick and Wesley, Thank you for the well thought out and detailed responses!
I've read both Buy then Build as well as HBR's guide, both of which I found very helpful.

In the end, I partnered with two folks in my area who have been successful in starting their own businesses and am going the startup route. Fortunately the downside is significantly minimized with the backing of the two mentors and the upside is still there. I see acquisition as part of our business plan in as we grow.

Patrick, I can definitely relate to point #5, it's something that I kept front and center in my mind as I structured the deal I'm currently a part of with the startup. That coupled with #7, have lead me to give myself a plan of attack, so to speak. All in for a defined amount of time, with defined metrics as waypoints, with a plan of exit if the trajectory is not aligning at the end of that timeline.

Thank you again for sharing your experiences (Both good and bad). It's always nice to know you're not the first to walk down this road!

Will you be staying in the reserves/guard? If you plan on raising money from investors, think long and hard about that question. In my experience, investors were adverse to investing in searchers/veterans who were also reservists. Getting mob'ed during the search or during your tenure as CEO is a risk they didn't like.

I'll be separating completely, not going into reserves.guard.

Nathan, 8 years after separating from the Marines I started a part-time self-funded search that lasted almost two years, I purchased a 15 year business (now going into the 19th year) using just my capital, some debt, and owner financing (cap structure was 48% my funds, 24% debt financing, 28% owner financing) at a multiple of just 2.

I share this information in light of Patrick's comment above, "smaller businesses don't sell at high multiples making it easier to win. Move up the food chain, if you want to, after getting some management experience." This has definitely been the case for me. And I'm grateful for all the shared information from the search fund community!

Now wrapping up my 4th year of ownership, and an average of 25 employees, I'm free of all debt incurred in the purchase (frugal, frugal, frugal...), I was able to increase revenues by 30%, and am now in a significantly better financial position than I was 4 years prior with a much better appreciation and experience in managing employees.

But it took a well thought out plan, initiative, and patience. I mentioned it took me almost two years to find a company; during this time I was able to gain valuable insight and experience involving all of the fundamental components of a traditional search (but on a smaller scale). Now, I'm looking to "scale up" and get involved in a new search in the near future.

Just wanted to say best of luck and thank you for your service.