Small businesses are small in name only
We see them as large opportunities
Our focus
Small businesses are larger than you think - both in size and in impact.
Small businesses drive over 40% of US GDP and created over 60% of jobs over the past 30 years. According to the US Small Business Administration, small businesses can have up to $40M in revenue and employ up to 1,500 people, depending on industry.
The small businesses in our wheelhouse typically generate $1-5M+ in free cash flow each year. That generally equates to about $5-50M in revenue and 10-250 employees. We cover industries including consumer, healthcare, industrials and technology.
In private equity jargon, we play in the “lower middle market.” We prefer to just call it what it is.
We unlock small business acquisition opportunities
We believe that small businesses represent one of this generation’s greatest avenues for wealth creation - for existing business owners who wish to pass on their legacies, entrepreneurs looking to jump into the driver’s seat, and investors who want to participate in the journey.
We love the “search fund” model that has traditionally addressed these opportunities. But we also believe that it doesn’t fully unlock this potential. We want to push the model forward.
-
Most searchers today are men in their 30s who graduated from top business schools and put aside months or years to search for the perfect business. We know them well - many are our friends.
But we think so many more could enjoy the benefits of business ownership - if only they had help. We want to break down those barriers by helping more entrepreneurs search, acquire, and add value to their businesses.
-
The traditional model of acquiring a business with $0.7-2M in EBITDA, running it full-time as CEO, and potentially exiting after 3-5 years has proven highly successful. We love it - and have personally invested in many such funds.
But we also believe it leaves opportunities on the table for entrepreneurs, investors and sellers. By broadening the pool of entrepreneurs, we hope to expand the search criteria to address more businesses - such as franchise portfolios, businesses who don’t require new full-time management, or those who are rewarding even without an exit.
-
Traditional searchers have key skills of successful business ownership - not least grit and strong credentials. But their business experience, while stellar, is typically short.
On the flipside, others we think could make great entrepreneurs often have an abundance of real-world expertise. But they often lack the know-how and time to diligence and acquire a business.
With deep experience diligencing, buying and adding value to businesses - either for ourselves or for private equity funds and large corporations - we hope to deepen entrepreneurs’ skillset along the ownership journey, whatever their background.
-
Search funds have historically yielded stellar returns for investors - with IRRs of 35% on average according to Stanford’s Graduate School of Business. It’s a big part of why we like the space so much.
But accessing those returns has been anything but democratic, and has often relied on attending the right schools and having the right connections. We hope to democratize investing by opening it to all those who join our investor circle, have the right appetite for risk, and are able and eligible to invest.