VALUE OF A MICRO-ACQUISITION $25K

All I am nearing the LOI stage of discussions with a small entertainment business.

Asking price: $25k
2017 SDE: 12k
2018 SDE: 12k
2019 SDE: 16k
2020 SDE: 1k
Margins: 60%
Low inventory costs, no real estate, no lease
Modeled IRR for 2 years operating with an exit at the same multiple as entry = 42%

I will be starting B-school this august, the business is located in the same city. My thought process is a successful growth of this company and exit after B-school will provide me credibility with investors when I pursue search in the future. Currently I am an engineer, and I think this experience will lend credibility to my future goals.

My concern is that this will be a 5-10hour a week job and that the opportunity cost of managing that while in school will outweigh the credibility benefits and $ return. I plan to spend the two months before school learning the ins/outs and automating processes (quoting, booking, billing) then learning about how to market this business effectively to grow revenue.

Can any investors or searcher chime in on whether they think this experience will be relevant to a search that will be for a 100x larger company?



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