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backz

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NOTE: This first post is a catch up - had been tracking this somewhere else since August 2021, so this is a dump of updates before I continue

Summary
QLA + other biz buying approaches combined into a roll up focus. Aim is to roll up and exit ASAP.

My Background
- Marketing background (SaaS + agency)
- Have run a few agencies, sold some, shut down others
- Tired of the insane competition level for little output cash wise
- Have some good "passive" income that covers my expenses (niche sites + info partnerships)
- Have paid for almost all the biz buying training out there

I NEED a change or I'm on a super depressing path to staying mediocre at a few hundred grand a year and tied to something that eats my energy and time. I'm going ALL IN on QLA and going big or just blowing up in oblivion.

Goal
Hit and exit on this roll up as quick as possible (beyond the $30M sale point) to establish a strong track record so I can do this again with the track record, connections and otherwise to not have to give up as much equity and reach a $500M+ exit.

Current Lay of The Land
- Had 2 roll ups (healthcare and home services), cut one due to how shit dealing with the owners was
- Now focused on one industry, QLA hybrid but slowly shifting towards a QLA standard but have 2 partners in it
- Already established deal team
- In deal flow heavily (more info below)
- Have a 2 support people cold calling now
- Averaging 5-6 introductory conversations had with a positive outcome to send information over a week within our core focus revenue range
- Closed one deal 100% seller finance so far (Jan 2022)

My Immediate Focus
- MORE DEALS!
- MORE SELLER FINANCE!
- Find good banks that won't tie us up and beat us like a rented mule to not do new deals

Pipeline
- 4 LOIs signed, 2 aiming to close in 60 days ($20M revenue represented)
- 3 more deals moving to LOI in the next 60 days ($15M revenue represented)
- Over 50 companies with financials in hand (+$150M in revenue represented)
- Over 200 companies in our pipeline with conversations done and being followed up with to get into a closing path
- Over 1,500 left to call in the specific vertical we're hitting, another 3,000 in the 2 shoulder verticals

Current Path
- On track to hit the 6 this year we had set as our minimum w/ +$35m top line
- Still hitting walls and stumbling our way through the operational end but getting much better

Let me know if more clarity would help - I will kind of just update this as I feel it makes sense to.
 
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addV

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Following. I am quite interested in leveraged buyouts, roll ups sound pretty interesting as well although I am in Europe and roll ups are probably less doable with a smaller common language market than in the US,

Are you using your own capital or investor's capital structuring it like a private equity firm? or no pocket money at all? (100% debt + seller financing?)

I was not familiar with the "QLA" terminology, is this a method from Dan Peña? that's what I found in Google
 

backz

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Following. I am quite interested in leveraged buyouts, roll ups sound pretty interesting as well although I am in Europe and roll ups are probably less doable with a smaller common language market than in the US,

Are you using your own capital or investor's capital structuring it like a private equity firm? or no pocket money at all? (100% debt + seller financing?)

I was not familiar with the "QLA" terminology, is this a method from Dan Peña? that's what I found in Google

I know of a TON going on in europe. Just as easy.

Debt only. No private money, no money from our team.

Correct.
 

Hong_Kong

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NOTE: This first post is a catch up - had been tracking this somewhere else since August 2021, so this is a dump of updates before I continue

Summary
QLA + other biz buying approaches combined into a roll up focus. Aim is to roll up and exit ASAP.

My Background
- Marketing background (SaaS + agency)
- Have run a few agencies, sold some, shut down others
- Tired of the insane competition level for little output cash wise
- Have some good "passive" income that covers my expenses (niche sites + info partnerships)
- Have paid for almost all the biz buying training out there

I NEED a change or I'm on a super depressing path to staying mediocre at a few hundred grand a year and tied to something that eats my energy and time. I'm going ALL IN on QLA and going big or just blowing up in oblivion.

Goal
Hit and exit on this roll up as quick as possible (beyond the $30M sale point) to establish a strong track record so I can do this again with the track record, connections and otherwise to not have to give up as much equity and reach a $500M+ exit.

Current Lay of The Land
- Had 2 roll ups (healthcare and home services), cut one due to how shit dealing with the owners was
- Now focused on one industry, QLA hybrid but slowly shifting towards a QLA standard but have 2 partners in it
- Already established deal team
- In deal flow heavily (more info below)
- Have a 2 support people cold calling now
- Averaging 5-6 introductory conversations had with a positive outcome to send information over a week within our core focus revenue range
- Closed one deal 100% seller finance so far (Jan 2022)

My Immediate Focus
- MORE DEALS!
- MORE SELLER FINANCE!
- Find good banks that won't tie us up and beat us like a rented mule to not do new deals

Pipeline
- 4 LOIs signed, 2 aiming to close in 60 days ($20M revenue represented)
- 3 more deals moving to LOI in the next 60 days ($15M revenue represented)
- Over 50 companies with financials in hand (+$150M in revenue represented)
- Over 200 companies in our pipeline with conversations done and being followed up with to get into a closing path
- Over 1,500 left to call in the specific vertical we're hitting, another 3,000 in the 2 shoulder verticals

Current Path
- On track to hit the 6 this year we had set as our minimum w/ +$35m top line
- Still hitting walls and stumbling our way through the operational end but getting much better

Let me know if more clarity would help - I will kind of just update this as I feel it makes sense to.

Nice to meet you, about to start a roll up where I am at as well. Targeting niche manufacturing for brick and mortar items that can be scaled up and sold via eCommerce (adding a revenue stream). An example deal I was looking at was buying an art printing manufacturing company (they print art onto canvases, make the canvas / frame too). Their main clients are universities for art students (repeat buyers, have contracts in place with several universities). Other customers on the books as well. 1-3 MM EBITDA range.

When you are approaching sellers and signing the LOI, I'm assuming you already have a board of directors in place? Or is it just you doing these deals? If you have a board how did you source these people? LinkedIn or manually?

Have you read the HBR book "how to buy a small business"? It also touches on the search fund side of things but has many example LBO deals.

How much cash did you spend on lawyer fees in the process?
 
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backz

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Nice to meet you, about to start a roll up where I am at as well. Targeting niche manufacturing for brick and mortar items that can be scaled up and sold via eCommerce (adding a revenue stream). An example deal I was looking at was buying an art printing manufacturing company (they print art onto canvases, make the canvas / frame too). Their main clients are universities for art students (repeat buyers, have contracts in place with several universities). Other customers on the books as well. 1-3 MM EBITDA range.

When you are approaching sellers and signing the LOI, I'm assuming you already have a board of directors in place? Or is it just you doing these deals? If you have a board how did you source these people? LinkedIn or manually?

Have you read the HBR book "how to buy a small business"? It also touches on the search fund side of things but has many example LBO deals.

How much cash did you spend on lawyer fees in the process?

Yes, we got the deal team before deals. All Linkedin.

Yes, it's garbage for debt deals. Great if you just have large checks to write (searchfund/equity model).

I think we've paid our lawyers $5k or something to date. They're on financed and delayed fees. So we pay them next to nothing. But we've racked up close to $40k all-in so far. About $15-20k per transaction is the aim. $35k of it was for documents for formations, closing docs, etc.
 
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backz

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Quick lay of the land update:
  • 1 of the 4 LOIs dropped out - wanted too much cash
  • 1 moved to pure seller finance (will close in 60 days max)
  • 1 accepted low cash offer with the rest seller finance (will close in 70 days max)
  • Lost 2 of the 3 deals that should have moved to LOI
  • Had one new one accept a LOI that is pure seller finance as well
  • Gained 5 new sets of financials and are structure offers for them
Win some, lose some. Pretty cyclical, but it's been a pain with the bank limitations at current. 6 Months left and we'll be rolling smooth given the track record and cashflow. But just a slog of shit to break through in the mean time.

Accepted LOIs with terms laid out and signed against should be +$2M by end of week. Then it just comes down to getting them to sign the final agreements and onboarding. The harder part.
 

Hong_Kong

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Quick lay of the land update:
  • 1 of the 4 LOIs dropped out - wanted too much cash
  • 1 moved to pure seller finance (will close in 60 days max)
  • 1 accepted low cash offer with the rest seller finance (will close in 70 days max)
  • Lost 2 of the 3 deals that should have moved to LOI
  • Had one new one accept a LOI that is pure seller finance as well
  • Gained 5 new sets of financials and are structure offers for them
Win some, lose some. Pretty cyclical, but it's been a pain with the bank limitations at current. 6 Months left and we'll be rolling smooth given the track record and cashflow. But just a slog of shit to break through in the mean time.

Accepted LOIs with terms laid out and signed against should be +$2M by end of week. Then it just comes down to getting them to sign the final agreements and onboarding. The harder part.
Do you have a website for your holding company?
 
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backz

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Update:
- Seller finance deal closing in a few days, good +500k net acquired for $0 + $10k closing costs (deferred)
- Negotiating 2 earn out deals, similarly $0 upfront and $130k and $180k net respectively, these should close in under 60 days if accepted

Busy season was slow, but now we've jammed 3 weeks worth of calls and all into just next week to accelerate again


How do you leverage track record?
Multiple sides:
- Acquiring at this pace shows strong sales/negotiation ability to investors who have done similar
- Stable cashflows and owners on-board shows stability to other owners who were hesitant as well as banks to lend
- Adds to my personal track record to be a GSD person in this space so I can attract some PE interest for the next time we roll up
 
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Funky Monkey

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How did you get into biz buying/QLA?
 

backz

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How did you get into biz buying/QLA?
One person I was connected to told me the reality - "you're playing a tiny game".

Once I realized all these 6/7 figure folks are just small mindset dime a dozens, it hit like a hammer. $100k is what some people spend on breakfast. $1M is what some folks spend in a weekend like it's pocket change.

Some even spend $10M on a week just for a hotel stay and some shopping as their regular day to day.

Chances are as far as your imagination can go and visualize, is still WAY TOO SMALL.

He said the evolution of an entrepreneur is M&A, I went down the rabbit hole. Found Dan and everyone was saying Dan's a faker. Spent some time because generally people who scream ____ is a scam, mean they were useless and didn't make it work. So they're the folks who are good to start looking at.

His approach of no shit, it's all on you, if you fail it's because you failed - it's all 100% real. It's the real world at the higher game.

Realized fast I wasted my entire F*cking life on stupid shit - marketing, growth, leaning SEO, etc. And that none of it makes real level money.

Your mindset has to shift first, then it REALLY opens your eyes to how small most folks play.

One area I do wish I spent more time on was sales. If I didn't bother with anything but sales beforehand, I'd be moving 10x faster.
 
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Funky Monkey

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Realized fast I wasted my entire F*cking life on stupid shit - marketing, growth, leaning SEO, etc. And that none of it makes real level money.
So you would have gone straight to qla/biz buying instead running your SaaS/marketing agency ?
 
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Johnny boy

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1. How did you find and reach out to the current seller financed deal you're closing
example: "I found them by having an employee cold call a list I got from "XYZ", and I also have them call business listings and ask if they are interested in selling".

2. How many people did you have to reach out to before closing this first deal?

3. What is your basic pitch when reaching out to these companies?

4. What are your best 1-2 books you recommend for learning about this?

5. I have a home services company coming up on 600k revenue and we have multiple locations, do you think that sounds like a good opportunity for rolling up companies in my industry?
 

Kirk84

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Did you go to the castle Seminar or how did you acquire knowledge needed?
 

backz

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So you would have gone straight to qla/biz buying instead running your SaaS/marketing agency ?

100%, agency is great for cashflow if you want to just be a millionaire and make $1-10m over your life. MASSIVE waste of my life spending +10 years on it for my aims.

1. How did you find and reach out to the current seller financed deal you're closing
example: "I found them by having an employee cold call a list I got from "XYZ", and I also have them call business listings and ask if they are interested in selling".

2. How many people did you have to reach out to before closing this first deal?

3. What is your basic pitch when reaching out to these companies?

4. What are your best 1-2 books you recommend for learning about this?

5. I have a home services company coming up on 600k revenue and we have multiple locations, do you think that sounds like a good opportunity for rolling up companies in my industry?

1. Cold call, we push +200 dials/day 5 days a week

2. 1.4k connected calls

3. Google this, there's a lot of scripts out there. We spent a bunch tweaking/perfecting ours so I won't be sharing it. But it's basically "interested in selling?"

4. https://www.danpena.co.uk/issue-59/ - don't confuse reading books for taking action towards something, most of it is bullshit. Action trumps 99.9% of what's in any of these books.

5. 600k rev and multiple locations sounds weird, like you are spreading yourself too thin in the areas. But makes ZERO difference if you start with a company or without. If you are essential to your business right now, sell it and buy something bigger with a management team and then build on that. If your company is already churning out cash with ZERO of your attention, than build on it. But at that revenue, I expect it's better to dump it on someone else and buy a better foundation. The roll up is only as good as your foundation, and 600k is too small of a foundation unless it's primed to be able to 5-10x/year. To be honest we don't even touch deals that small as a baseline, $1.5-2m low end and up.
 
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Johnny boy

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100%, agency is great for cashflow if you want to just be a millionaire and make $1-10m over your life. MASSIVE waste of my life spending +10 years on it for my aims.



1. Cold call, we push +200 dials/day 5 days a week

2. 1.4k connected calls

3. Google this, there's a lot of scripts out there. We spent a bunch tweaking/perfecting ours so I won't be sharing it. But it's basically "interested in selling?"

4. https://www.danpena.co.uk/issue-59/ - don't confuse reading books for taking action towards something, most of it is bullshit. Action trumps 99.9% of what's in any of these books.

5. 600k rev and multiple locations sounds weird, like you are spreading yourself too thin in the areas. But makes ZERO difference if you start with a company or without. If you are essential to your business right now, sell it and buy something bigger with a management team and then build on that. If your company is already churning out cash with ZERO of your attention, than build on it. But at that revenue, I expect it's better to dump it on someone else and buy a better foundation. The roll up is only as good as your foundation, and 600k is too small of a foundation unless it's primed to be able to 5-10x/year. To be honest we don't even touch deals that small as a baseline, $1.5-2m low end and up.

We opened two of them a month ago. Revenue should be 1.2+ next summer

Thank you for the succinct and direct quick answers
 

MTF

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Realized fast I wasted my entire F*cking life on stupid shit - marketing, growth, leaning SEO, etc. And that none of it makes real level money.

Your mindset has to shift first, then it REALLY opens your eyes to how small most folks play.

Could you provide any resources on this other than Dan Peña? How do you shift your mindset this way? How do you stop playing small if it's the only thing you know?

Is the point about stupid shit applicable to all entrepreneurs or is it personally just for you?
 

doster.zach

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Yes, we got the deal team before deals. All Linkedin.

Yes, it's garbage for debt deals. Great if you just have large checks to write (searchfund/equity model).

I think we've paid our lawyers $5k or something to date. They're on financed and delayed fees. So we pay them next to nothing. But we've racked up close to $40k all-in so far. About $15-20k per transaction is the aim. $35k of it was for documents for formations, closing docs, etc.
Super interesting thread.

So do you think you could have gone straight to what you are doing now without your past experience?

Also what makes what you think what you’re doing now is “big enough”. Not trying to be a smart a$$, is it the potential number of earnings or is it something else?
 
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backz

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Could you provide any resources on this other than Dan Peña? How do you shift your mindset this way? How do you stop playing small if it's the only thing you know?

Is the point about stupid shit applicable to all entrepreneurs or is it personally just for you?
If you're scared of someone yelling profanity, you won't have a good time in this world.

But some resources:
  1. Dan Pena
  2. Jeremy Harbour
  3. Jason Rogers
  4. Carl Allen (not the fluff shit he does though)
Dan's the only one who touches mindset which is 99% of it, tactics are easily findable. Lots of folks in the space also like educating, the wrong way for the most part, but they don't mind sharing their knowledge in an arrogant way.

5 Friends you hang around with, get rid of them all. Find 5 people you're SUPER uncomfortable around and feel like shit around. If you feel like you're drowning in their success, you are around the right people. But again - refer to Dan.


Super interesting thread.

So do you think you could have gone straight to what you are doing now without your past experience?

Also what makes what you think what you’re doing now is “big enough”. Not trying to be a smart a$$, is it the potential number of earnings or is it something else?

With spending 1-2 years hard on sales, for sure. Marketing and all is bullshit comparatively. We touch no marketing at all in our companies and likely never will, but we'll still grow to the maximum the companies can because of simple sales stuff and just the industry.

I'm playing no where near a big enough game now. Just a bigger game by a long way than I was. But I know I need the track record (see above) to play a bigger game which is 100-1,000x bigger than I am even now.
 

doster.zach

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If you're scared of someone yelling profanity, you won't have a good time in this world.

But some resources:
  1. Dan Pena
  2. Jeremy Harbour
  3. Jason Rogers
  4. Carl Allen (not the fluff shit he does though)
Dan's the only one who touches mindset which is 99% of it, tactics are easily findable. Lots of folks in the space also like educating, the wrong way for the most part, but they don't mind sharing their knowledge in an arrogant way.

5 Friends you hang around with, get rid of them all. Find 5 people you're SUPER uncomfortable around and feel like shit around. If you feel like you're drowning in their success, you are around the right people. But again - refer to Dan.




With spending 1-2 years hard on sales, for sure. Marketing and all is bullshit comparatively. We touch no marketing at all in our companies and likely never will, but we'll still grow to the maximum the companies can because of simple sales stuff and just the industry.

I'm playing no where near a big enough game now. Just a bigger game by a long way than I was. But I know I need the track record (see above) to play a bigger game which is 100-1,000x bigger than I am even now.

I see, so dream big, try and play the biggest game you can conceptually play at the moment and try and jump to the bigger games when you know they exist?
 

JustMorpheus

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NOTE: This first post is a catch up - had been tracking this somewhere else since August 2021, so this is a dump of updates before I continue

Summary
QLA + other biz buying approaches combined into a roll up focus. Aim is to roll up and exit ASAP.

My Background
- Marketing background (SaaS + agency)
- Have run a few agencies, sold some, shut down others
- Tired of the insane competition level for little output cash wise
- Have some good "passive" income that covers my expenses (niche sites + info partnerships)
- Have paid for almost all the biz buying training out there

I NEED a change or I'm on a super depressing path to staying mediocre at a few hundred grand a year and tied to something that eats my energy and time. I'm going ALL IN on QLA and going big or just blowing up in oblivion.

Goal
Hit and exit on this roll up as quick as possible (beyond the $30M sale point) to establish a strong track record so I can do this again with the track record, connections and otherwise to not have to give up as much equity and reach a $500M+ exit.

Current Lay of The Land
- Had 2 roll ups (healthcare and home services), cut one due to how shit dealing with the owners was
- Now focused on one industry, QLA hybrid but slowly shifting towards a QLA standard but have 2 partners in it
- Already established deal team
- In deal flow heavily (more info below)
- Have a 2 support people cold calling now
- Averaging 5-6 introductory conversations had with a positive outcome to send information over a week within our core focus revenue range
- Closed one deal 100% seller finance so far (Jan 2022)

My Immediate Focus
- MORE DEALS!
- MORE SELLER FINANCE!
- Find good banks that won't tie us up and beat us like a rented mule to not do new deals

Pipeline
- 4 LOIs signed, 2 aiming to close in 60 days ($20M revenue represented)
- 3 more deals moving to LOI in the next 60 days ($15M revenue represented)
- Over 50 companies with financials in hand (+$150M in revenue represented)
- Over 200 companies in our pipeline with conversations done and being followed up with to get into a closing path
- Over 1,500 left to call in the specific vertical we're hitting, another 3,000 in the 2 shoulder verticals

Current Path
- On track to hit the 6 this year we had set as our minimum w/ +$35m top line
- Still hitting walls and stumbling our way through the operational end but getting much better

Let me know if more clarity would help - I will kind of just update this as I feel it makes sense to.
Interesting post, never head of these concepts before. Is it kinda like buying real estate, but instead, with business and higher profits? If so, how would the market crashing affect your plan?
 
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backz

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I see, so dream big, try and play the biggest game you can conceptually play at the moment and try and jump to the bigger games when you know they exist?
Pretty much, as long as that's your aim. My aim is far, far beyond what most look at as "FU money". You can have a few million and be in that mode. But that's small peanuts if you look at "what if" scenarios.

Interesting post, never head of these concepts before. Is it kinda like buying real estate, but instead, with business and higher profits? If so, how would the market crashing affect your plan?
Yes, won't make a difference. Pick your market well and you won't have issues. Pick stupid shit because it's "hot right now" and you're bound to go to zero.
 

Mikkel

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After reading this thread yesterday, I went down probably the same rabbit hole you went down some time ago.

I haven't listened to the entire YFHM book in podcast form, but I'm working on it. It got me thinking about those who currently are running their own business. Aside from the mental aspect, which Pena speaks at length about, if you are in a business whose market size is astronomical (tech, health care, energy sector, logistics, etc.) then you can begin to implement the QLA method once you have set the groundwork for your business. Ultimately, use debt and other people's money for vertical and horizontal integration. Is this the correct assessment?

@backz Did you start by immediately going to banks and leveraging the bank's money to buy businesses or did you take a different approach?

With the economy appearing to turn down, are you seeing more businesses becoming more desperate and willing to sell to you?

What are some things you are looking for in a company when buying them?
 

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This video by Dan Pena on obtaining lines of credit is a game changer. A paradigm shift. Go watch.

I'm only now just getting my business up and running. I currently have no need for capital, but I can see if all goes well that access to capital will be important... obviously. Getting in front of banks NOW to ask for lines of credit is the right mindset. You still want to evaluate each purchase to make sure your money is going to make more money, but finding capital BEFORE you need money will keep you moving forward when the money is needed.
 
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Thank you, following.
Awesome to see, a few personal friends I met through working in elite sports (cars) have the X factor/mindset for this. One made a killing in c19 times, heard that it's approaching even better opportunities for empire acquisition...
 

backz

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May 22, 2015
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After reading this thread yesterday, I went down probably the same rabbit hole you went down some time ago.

I haven't listened to the entire YFHM book in podcast form, but I'm working on it. It got me thinking about those who currently are running their own business. Aside from the mental aspect, which Pena speaks at length about, if you are in a business whose market size is astronomical (tech, health care, energy sector, logistics, etc.) then you can begin to implement the QLA method once you have set the groundwork for your business. Ultimately, use debt and other people's money for vertical and horizontal integration. Is this the correct assessment?

@backz Did you start by immediately going to banks and leveraging the bank's money to buy businesses or did you take a different approach?

With the economy appearing to turn down, are you seeing more businesses becoming more desperate and willing to sell to you?

What are some things you are looking for in a company when buying them?

No, follow the process. He lays out the process and steps quite clearly. You focus on those steps. When you are based on the US, you can sneeze and have people give you millions in credit. In Canada, not so much. But getting a commitment from a lender before a deal isn't even worth as much as a square of toilet paper.

Economy turmoil means fear. That fear does drive some action, but not a ton since this is a heavily recession and covid resistant industry from what they've seen.

All the standard QLA elements are 99.9% of it. I added some filtering for owners who are also willing to provide commitments to very long transitions (3+ years) even if we don't use it.
 

backz

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May 22, 2015
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Quick update:
  • 2 LOIs dropped out - structure or otherwise as issues, can be salvaged but not putting priority
  • Closed another deal adding $2.8M in post-arbitraged value (after debt/notes paid) to the platform
  • Sent out 4 offers this morning that'll be moving to LOI as soon as we can make them happen
  • Onboarded some team members to support raising capital with a rate of return (basically debt)
  • ~25 new companies in pipeline since start of month
A few bigger deals now moving through discovery so should have some nice juicy deals pulling along September alongside $2-3M in cash from investors that can be dumped into deals (should mean +$2M additional EBITDA acquired)
 
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backz

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May 22, 2015
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Quick update:
- 1 drop out LOI came back after we convinced the banks to offer more
- Found a GREAT CEO candidate who can get the banks to increase their leverage by +35%
- 3 more added into conversation to move to LOI quite shortly (aiming before end of month)

With the bank leverage increase we're confident now going back to some of the bigger deals we wrote off earlier on. So reaching out to them this week to see if we can connect. Each of these 4 deals we wrote off are +$45M revenue. So any one could effectively be a years worth of deals in one transaction.
 

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