65+ acquisitions, "you gotta buy 4-5 bizs fast"

Want to see what type of holding company could one build in a short 3.5 years?

Read the story below:

René Rechtman turned $145 million into a cool $3 billion in less than three years.

All thanks to a strong vision, private equity and CoComelon's YouTube channel.

Moonbug, a child entertainment PE founded in 2018.

Makes and markets YouTube shows for audiences up to 6 years old.

(Pretty niched down, isn’t it?!)

Their idea was simple:

1. Buy a bunch of homemade breakout productions

2. Upgrade the scripts

3. Launch live touring acts

4. and sell more and better merchandise

Like CoComelon, Little Baby Bum and Blippi which each have 20-400 million views per video.

The difference?

Acquire all of them!

In 2018 they raised 145 million in a Series A.

“It’s just a different way of raising money. The business model is to buy IP and grow that way very fast. You go directly to the growth phase rather than start with seed capital.”

They went on a serious shopping spree.

Business model:

1. Sell the content to streaming and video-sharing platforms such as HBO, Pluto TV, Netflix, etc.

2. Sell more and better toys / merchandise.

Moonbug Entertainment today:

• Produces 29 of the most popular online kids’ shows in the world!

• Found on 150 platforms in 32 languages

• 9.8 billion views on YouTube in December alone.

Moonbug was acquired for $3 billion by a larger PE firm.

7 biggest lesson from the founder:

1. As an European company: go full speed and full power into the U.S. market right away.

2. Business with Strong vision goes further - financially wise & making a difference wise.

3. Understand the business model much better. How do you make money?!

4. Build a strong network of smart people (you never know what life has in store for you)

5. If you want to come and make a difference, you need to be hands-on;

6. You need to understand the clients;

7. You need to understand the DNA of the companies, and get your hands dirty.

That said,

In life one thing leads to another.

Rene has successfully been part of the media, entertainment and tech start up environment since 1998.

If you truly have ambition, don’t worry about how you’ll get there.

Just keep moving forward and things will fall into place.

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Big news — I’ve partnered with two amazing folks: Brandon and Rand.

They’re the first official sponsors of the pod and the newsletter, and this is a true win-win-win:

1. You win = get better returns for your investment by using their products.

2. They win with new customers.

3. I reinvest every dollar into better content — already hired a social media team, and a full-time researcher is next.

It’s a flywheel: better partners → better content → better guests → better returns for you.

If you want to become a sharper investor or operator, check these out:

1/ For business owners: You’re likely making costly mistakes. Rand built Scalepath — a small, curated peer group of 7 operators just like you. Monthly Zoom calls. Real feedback. New ideas.

Apply at joinscalepath.com and book a call with Rand.

2/ For B2B growth: Running a portco or PE-backed business? You need pipeline and results; not headcount. Spacebar Studios is Brandon’s flexible growth team for $1M–$50M B2B companies. They handle outbound, messaging, media — everything that drives real growth.

Learn more at spacebarstudios.co

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Talked to an associate in his 20s who's about to leave his job at a single family office and acquire his very first SaaS company.

He had a chance to meet a well known serial acquirer. Someone who has built a large portfolio and done 65+ acquisitions.

When asked what his number one advice is for someone starting out building their portfolio of cash-flow businesses...

The older gentleman said:

You gotta do whatever it takes to acquire 4–5 companies fast. This is what investors want. One, two, three... it’s not enough. At least four or five. If one goes south, it’s not a problem. But if you’re slow and just buy and grow the one, and not going out to buy more - investors will lose interest in your strategy.

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This really got me thinking where I see many first-time business have a mindset (myself included):

“Let me buy one company and take it slow”

While the gentleman with 30 yrs of experience & 50+ deals thinks:

“Let me prove I can build a portfolio machine”

Again, there seems to be a huge difference in thinking already

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Last week I heard a crazy business flip story...

M&A guys making tens of millions with wild returns.

A company in the medical industry, owned by an older gentleman who wanted a quick exit (don’t ask why); he had a dream number in mind... in this case, let’s say $30m-40m

He didn’t really care about the EBITDA multiple, at least he thought it can't be higher than 4-5x. But in the medical industry, with a growing company, it’s definitely higher

The buyers quickly realized they had to move fast, and the same day they bought the company, they already had a buyer waiting, willing to pay a much higher multiple.

Numbers and valuations not 100% accurate, but true story.

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Keeping small businesses locally owned and operated.

I really like the manifesto the folks from Mainshares have written on their website:

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Had a conversation with a gentleman who grew his holding company from over $10m to $150m in ten years. This through a mix of organic growth + a few acquisitions.

One thing that stood out was whenever their team begins due diligence on a new acquisition they refer to it as an "operations head start"

IMO that is a great way to frame it.

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How has been the week in the small holding company world?

Traditional business

Meeting with a lot of "boring" business owners in their 50s, 60s, 70s.

Revenues from $2m to $15m; net profit ca 10-15%

When asked why haven’t you grown further?

“No need for that as it doesn’t bring added time & happiness to myself and my family.  I’m as happy as it gets.”

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This is an opportunity. With the right product and service. By adding a killer operator...

I believe it is a great idea to acquire a majority stake (51%+) and grow such companies to new heights.

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That is why I am working on a deal to acquire a $12M heavy equipment rental company.

Yesterday morning I received a call that the bank first speak with the owner, who agreed to be my creditor, to make the transaction happen.

I'll let you know how it all goes.

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Consumer loan company

It has been 4 years since we started building a BNPL (BuyNowPayLater) company.

The last 1,177 days have been exactly the same:

Call potential customers.

• Ask how they are doing

• Build relationships

• Sell our services

This simple recurring activity has allowed us to grow by 8-10% per month so far.

Cold calling works like magic.

Here is a short list of today's calls to e-commerce stores which do not have our payment services, yet

1. Last week, we closed an equity investment deal with local investors that we had been working on for the past month.

2. Since we started with smaller B2B loans, we had our largest request last week – $20k – for a company with real estate as collateral. This week, we are working on another request for $35k.

It takes time, but it will allow us to grow our credit portfolio much faster.

A new office is also under construction. We’re moving in in July.

(All of this I shared before is ONLY possible thanks to an incredible team!)

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This week’s HoldCo Builders podcast

People reached out saying:

“this is an incredible story and grit is the REAL differentiator”.

“Mark is a badass.”

Why they said that??

Well…

• Mark raised $5m

• His daughter almost died

• His partners walked

• COVID hit

Most people would have fold...

But Mark went and acquired two companies and built a $12M holdco.

Again, this one’s about grit, real assets, and long games.

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

That’s all for today.

I really appreciate you taking the time to read and look forward to talking to you again next week.

Take care,

PrivateEquityGuy / Mikk Markus