14 acquisitions, nr1 dealbreaker, 10-10-10 rule

My friend, the day has come!

I’m super proud to announce that two very special people contacted me:: both Brandon and Rand said they would like to sponsor all of this and reach a very special niche audience of business builders, buyers, and investors.

Please read and see what they do. Both are exceptional products and services.

It could be a perfect WIN-WIN-WIN:

1. You win using their products and services.

2. They win, they pay more.

3. I get to hire great full-time researchers and as a result, you see better content, learn more, and most importantly, more and more top investors and holdco builders come to the podcast.

Again, you win, big time!

What a great cycle that would be, wouldn't it?

So, if you find yourself wanting to become a better investor and allocator of capital (which I am sure you do):

1/ If you own a business, you're probably making mistakes left and right, mistakes that cost you time and money. Well, Rand Larsen from Scalepath has built a community of other business owners who've already made those mistakes, and will share their experiences to help you avoid them.

Each group is small. Just seven operators with similar business models and revenue. You meet once a month on Zoom to get direct feedback on your biggest challenges, and often hear about opportunities in other industries that might apply to your own.

There are groups for home services, B2B, manufacturing, professional services, holdco owners, and more.

Apply to join Scalepath at joinscalepath.com and schedule a call with the founder Rand Larsen.

2/ If you're running a portfolio company or working inside a private equity-backed business, you know how hard it is to build pipeline, shorten sales cycles, and improve win rates—all without bloating your team.

That’s where Brandon and Spacebar Studios comes in.

They act as a flexible growth team for B2B companies doing between $1M and $50M in revenue—handling everything from messaging and outbound to paid media. The result? High-ROI campaigns that actually move the needle.

So if you’re ready to scale without hiring a small army, head over to spacebarstudios.co and check them out.

- - - -

Really important lessons from a business buyer who recently raised capital and has now analysed 100s of acquisition targets in a very short period of time:

- - - -

When you have a long attention span finding a really great acquisition, I believe it's still a good idea to look for off-market deals.

The ones not on a marketplace.

The ones brokers have no idea about.

The ones that don’t have a pitch deck and a long presentation.

Far from polished and even further from obvious.

They’re hidden:

Local, off-market. Ran by owners who’ve been busy building and never really thought of selling their great business with even greater cash flow, loyal customers and a moat built for the past 15+ years.

With a long enough attention span, and your willingness to build great relationships with such founders you “may” get lucky and get to acquire a minority or majority stake in such a business with very favorable terms.

-

Writing this because that's also what I've been doing for the past 2.5 years

- - - -

Last week I had a 60 min conversation on the Holdco builders podcast with a partner at a private equity firm where they’re currently looking for companies with either $75M+ in revenue or $6M+ in EBITDA.

When I asked about the co-founders of the firm he said they started the firm 3 years ago… but they’ve known each other for over 20 years.

That stuck with me.

In PE and in business in general - relationships seem to be your most valuable long term asset.

You never know when a college friend, former colleague, or someone you met at an event a decade ago might become your partner in a 9-fig fund.

Trust takes time. Shared values can’t be rushed.

If you're in your career, focus less on immediate ROI from networking and more on consistently meeting/talking to good people…

Because someday, one of those relationships might turn into a partnership that changes your life.

- - - -

There isn't a story of a private equity, VC, hedge fund, or holding company founder who has gone from an idea to millions, if not hundreds of millions in assets without moments when they felt like they couldn't do it.

There is so much pain involved and you can feel it when you talk, listen or read about people who have been through it all and finally made it.

- - - -

There's simply no right or wrong way to build a large and very profitable portfolio of traditional niche businesses.

Spoke to the founders of 8-fig holdco where they’ve acquired over 10 companies.

What they do is every time they spend at least 90 days in the company.

Learn all the details about

• the industry

• the people

• the customers

• the nuances of everything

They started 5-6 years ago with the idea of buying just one company…

Now as the strategy of getting into every business within the first 90 days post acquisition is working VERY well — they can see that they can grow the entire portfolio even bigger.

-

So far of 14 acquisitions, they’ve sold two because they said managing these companies was too hard and they didn't like the industry.

- - - -

Based on the following post/screenshot – many people reached out asking me to send them this database of $500k to $4m EBITDA companies:

Instead of sending this to them, and you – I’ll tell you how you can create one yourself:

It’s important to understand – as buyers/investors, building a great list of potential targets is a database and personal interaction game.

You need an "as broad as possible" database, then reach out to them to find the right person, the owners. Forget the CEO, forget the assistant, they may not know the whole story.

Take all major M&A platforms such as Pitchbook, D&B, and Inven. No one database offers the right contacts. You have to develop your list yourself by extracting information from multiple sources.

You then extract lists from databases based on financials and do outreach through cold emails.

Then cold calls as follow-up. I found this to work best:

“My name is Mikk, the reason I’m calling is last week I sent you information about XYZ — just wanted to make sure you received it.”

Go from there. See where the conversation goes.

Then the real list-building-work starts.

Once you meet and talk to them, even if they’re not interested in selling or raising additional capital themselves, try asking about the competitors.

“If you were me, which competitors would you try to invest in or acquire?”

“If you can’t do the work yourself, who is the number one competitor you’re sending your work/leads to?”

These simple questions will hopefully give you another 2, 3, 4, 5 players in the same industry.

Do 5, 10, 20 such calls per day, and your database in one specific niche/industry starts to add up very quickly.

- - - -

Talked to serious dealmakers, gentlemen who’ve done 20+ acquisitions.

They went nearly 2 years without doing a single deal.

Not because they couldn’t, but because seller expectations had gotten insane.

So they waited.

Funny enough, they now own some of those same companies... at half the price.

- - - -

Traditional business

The absolute hardest thing of the past two and half years:

Convincing a group of traditional business owners in their 50s and 60s to sell their life's work to a 31-year-old while having them willing to finance 40-50% of the deal.

That said,

I think I found two founders, both in their early 50s, who are willing to do just that. It's a heavy equipment rental company that I've been talking to for the last 5-6 months.

Let’s see. I'm going to start meeting with the banks. They have a lot of potential buyers, but they came to me a few weeks ago with a detailed plan on how to make it happen.

- - - -

What happens when two ex-PE guys give themselves 2 years to buy a business - and sign an LOI in 6 weeks instead?

In this week’s podcast, the guest thought of living by the “10-10-10 rule” of private equity:

• 10 years to become managing director

• 10 years making money for others

• 10 years to finally build wealth for yourself

He decided to say no…. choosing a faster path -- buying and scaling a business.

His story:

What happens when two ex-PE guys give themselves 2 years to buy a business - and sign an LOI in 6 weeks instead?

Heet on turf, tailwinds, and action > analysis

2 years to go from $5m to $21m

This is what decisive, well-prepared capital allocation looks like.

I hope you enjoy this conversation.

Here are the links to Spotify, Apple Podcasts and YouTube.

That’s all for today.

Now scroll up and check out the sponsors – maybe that’s exactly what you and your businesses are missing.

Thanks for reading and talk to you again next week.

Take care,

PrivateEquityGuy / Mikk Markus