Greetings everyone!

I'm excited to share my first “monthly update” for Balance Capital. Since starting my self-funded search to acquire a small business, many of you have shown interest and even offered to help.

In light of this, I've decided to start writing a monthly update to share my journey, lessons learned, deal sourcing, and key takeaways I’ve had each month.

I hope this not only keeps you informed, but also sparks ideas you can share back with me.

Balance Capital Overview

Reminder: I’m looking to acquire a service business with these characteristics:

August Quick Stats:

My Current Approach to Deal Sourcing

1. Direct Broker Outreach: I actively check broker websites in my target regions. When I see a fit, I directly call the broker. This not only helps in the immediate pursuit of a deal, but also paves the way for future listings with brokers who remember our interaction.

2. Cold Calls for Future Opportunities: Even without a current fit, I cold call brokers. The goal? To be the first name they think of when the right opportunity comes along. My goal is to plant seeds now for future opportunities.

3. Deal Aggregator Sites: While I’d prefer to discover deals not already on popular aggregator sites (e.g., BizBuySell), I still review them. If a deal catches my eye, I contact the broker for more details.

4. Other Searchers: I’ve started to connect more with other searchers (traditional and self-funded). My main goal is to learn as much as I can from them, but there’s also an opportunity to pass along deals that are attractive but don’t fit the searcher’s criteria.

My core strategy is focused on developing broker relationships and targeting Owners who are ready to sell, without any proprietary outreach at this time.

August: Select Opportunities Reviewed

My goal here isn’t to recap every deal I reviewed in August. Instead, this section highlights opportunities that either (1) taught me key lessons or (2) strongly matched my target company profile.

Please note: I'm committed to upholding the highest standards of confidentiality and respecting Sellers by only discussing information that has been publicly disclosed. For a deeper dive into how I evaluate these opportunities, please reach out to sign a mutual NDA.

1. Telematics Installer / Service Provider. This company provides installation and repair services for telematics equipment used by large fleets. They benefit from strong industry tailwinds, have a loyal and long-term customer base, and offer immense growth opportunities through B2B sales. Despite my interest, my scheduled meeting with the Seller was cancelled, as the broker prioritized other buyers because of his concerns with SBA financing. Read More

2. Wifi / Marina Security Systems: This company sells, leases, and installs WiFi technology, security cameras, and access control to marinas. The company capitalizes on a niche market demand, possesses an impressive customer base with marinas, has high recurring revenue (43%), and has strong growth. This one felt like one of the best opportunities I’ve reviewed so far. Ultimately, I didn’t get the chance to connect with the Seller. After quickly reviewing the CIM, I gave feedback to the broker, only to find the Company already under an LOI. Read More

Key Learnings & Takeaways

• Time Allocation

  • I need to be more efficient: I over-analyzed a few opportunities this month.

  • Going forward, I plan to:

    • Emphasize direct seller conversations over in-depth pre-call research.

    • Engage with more brokers and review more CIMs.

    • Accelerate action on interesting deals and prioritize seller intro calls.

• Refining my Search Criteria

  • I've refined my criteria to focus on companies suited for B2B sales-led growth and moved from a $500K EBITDA minimum to $750K minimum.

  • B2C-centric businesses, particularly those dependent on consumer marketing, are taking a back seat for me.

  • I welcome advice on this (see "Where I Need Help" below).

• Broker Relations & First Impressions

  • I’m still iterating on how I present myself to brokers to stand out, especially concerning the financing plan.

    • The Broker for the telematics firm favored other buyers, possibly because of my SBA financing plan.

  • To enhance credibility, I've created a Balance Capital 1-pager for brokers. You can check that out here: 1-Pager

Where I Need Help

If you’re looking for ways to help, here are a few ideas on areas I could use it:

Thanks / Shout Outs:

• Martin Lopez. Martin and I attended UCLA Anderson together - and I could frankly dedicate an entire 1,000 word write-up to how much Martin has helped me through this process. Martin has graciously shared his time and many resources with me. He has saved me MONTHS and gotten me up to speed way faster than I would have been able to do alone. I genuinely can’t thank him enough.

• Andrew Smallwood. Andrew has connected me with several people in the property management (PM) industry who are not only experts in PM, but also know M&A. Andrew goes out of his way to help me without me even asking. I’m grateful to have such a good friend.

•  Ben Bortner. Shout out to Ben Bortner for reaching out to me and offering to share his expertise as I find more deals of interest. Ben was a self-funded searcher himself, who after a successful exit launched Slack Water Capital to partner with acquisition entrepreneurs. Thanks Ben!

Other News:

• Sep 30th - Oct 1st: Self-Funded Search Conference in Dallas, TX

  • I’m attending this conference at the end of the month. If you plan to be there, let’s connect!