Specialty Gift & Home Goods Retail deal – $2M top line

Specialty Gift & Home Goods Retail Store – $2M top line – Putting together Debt and Equity Partners Current numbers – $2M top line revenue. ~$300k in earnings (SDE). Been in business at this store for 26 years (since 1997). Has over 10 employees. Raising $350k of Debt and Equity financing for this acquisition. Social following: 9k Facebook followers, 7k Instagram followers, 370 Twitter, 230 google reviews – 4.7 stars, 440 Pinterest followers. Reason for Sell: Owners Retiring Reason to Acquire: Upside potential with value add. Current state: Long standing business, well respected in the neighborhood with very positive reviews and steady revenue. Areas to improve and growth: Social engagement – they post diligently right now but not much engagement. Better engagement and servicing of walk-ins. Improving operating costs with automation, fractional accounting, finance, etc. Bundling – currently none. Email list engagement – currently none. eCommerce – currently minimal. Affiliate products and services from other companies. Selling our products via affiliates. Corporate gifts. Risk: Owner and wife retiring. Will need to hire a replacement general manager. We should be able to find an experienced manager, though, and also leverage the existing staff and put in good policies. Capital Raise Details for Debt or Equity Partners: Assets = Debt + Equity You can be a Debt or Equity Partner. Debt partners are more secured. Specified return irrespective of business’s profits. Equity partnership is more risky but you get to participate in the business’s upside. Partnership Requirements and Benefits: Debt Partners: Minimum amount $50k – repaid at 15% interest rate amortized over 5 years. No pre-payment penalty. 50% Cash on Cash return over 5 years. This will be a guarantee (as much as we can) as you will have a lien against the business. You will get monthly disbursements as per amortization schedule, and quarterly business financials breakdown. If multiple people want to participate here, the monies will need to be pooled into a SPV and the SPV will have a lien against the business. Participants that hold more than 80k in debt will have the opportunity to join the board meetings once a month. Equity Partners with Board Membership: Minimum amount 50k. $50k will get you 5% equity and a board seat. At current SDE, this will equate to disbursements of $15k/year (30% return). Given that we will need to hire a replacement manager, the disbursements will likely be $10k/year (20% return). (Large Private equity funds returned an average of 15.3% annually over the past 10 years.) You will need to attend most of the board meetings (weekly to start with and then less frequent) – this is where we will discuss optimization and growth strategy. We can hit $4M top line revenue conservatively in the next 5 years. As a board member, you will also direct the growth campaigns as we roll them out, measure them, improve them (discard failed campaigns) and oversee creation of an on-going process for the successful campaigns. You will get to participate in all the upside – As revenue and profits increase, you’ll get disbursements according to your equity. At any point after 9 months, if you want to sell your equity, other members can buy you out. We are looking for you to bring some creative and analytical thinking. We will also look for a good cultural fit for the business and other team members, so we will be selective in qualifying board members – so money is not the only criteria. Experience in Retail Sourcing, Merchandising, Marketing would be very valuable. If we generate more interest than we need, we will let the business pick the best board members for its success (Chat GPT). After the close, I will fly in all the board members to Minneapolis at my cost for a weekend and arrange stay at an Airbnb. We will we tour the business, meet with the employees (maybe even the previous owners), tour a few major competitors in the state (the ones with the highest revenues). This will be for market analysis, and for possible roll-up acquisitions in the future. Silent equity partners: Available for multiples of $10k (1% equity for $10k) ~20% Cash on cash return. You’ll be informed on the company’s performance every quarter. Get paid distributions in proportion to your equity. Participate in the business’s upside growth. Ability to sell back equity to other members anytime after 9 months at potentially higher valuation.