To acquire or not acquire?

A quick note before we jump in…

Yesterday I sent a Business Overview of the following company (driving school in Estonia) to the investors.

Get on my list here and I’ll send you more information about the deals.

I already received a message, ‘what happened during in 2020?’

I will find out.

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7 steps on how to outperform the market by acquiring and growing small niche businesses

(At least that is what I spend all my waking hours doing in my professional life).

1. Start with the business model

Make sure you understand how a company makes money.

Invest in companies which have a good business model that have had success in the past. The best business models don’t change much over time.

2. Invest in companies with skin in the game

Invest in companies which are run by their founders. Which means we acquire the majority, but the operator keeps the rest.

When we do this, we automatically increase our chances to outperform the market.

3. Starting from a small market and going from there

Estonian is a small place. Population of 1.3M people.

For example:

By acquiring one great company in a specific niche and then making 1 or 2 bolt-on acquisitions, we have complete control over the market. From top talent to pricing power.

Once we’ve achieved that, we expand to foreign markets such as Finland, Sweden, Norway.

(However, in the pipeline, we have some companies that already export 98% of their products.)

4. Having the right people (hungry people who are very good at what they do)

In my opinion:

The smartest thing a 23-year-old can do.

Challenge yourself!

• Go and start this business

• Live abroad for 2 years

• Learn a new language

• Send this cold email

• Try to get this desired job

• Knock on that mentor’s door

• Say hello to this good looking woman

Challenge yourself!

I’ve seen and spoken to many young folks who didn’t do it.

As a result, they’re miserable and unhappy.

How do I know?

5 years ago I studied psychology and did market research in the company, during which I interviewed nearly 45 people aged 25-30

The results were shocking, half of them were far from being happy and excited about life.

At least that’s what they told me.

So…

Challenge yourself — it will be hard and require a lot of growth.

But boyyy, it takes you to places in this beautiful world.

And the absolute best part is the people you meet along the way.

(Btw, this is the story of my life. I'm not the smartest, but I'm willing to experiment and challenge myself.)

The people part is BIG one.

Building publicly on Twitter has been unbelievable. Being one message away from getting in touch with very smart folks.

From operators to, marketing specialists all the way to investors, and advisors.

Most importantly, people who have done exactly what I want to do -> doubling the revenue of SMEs.

5. Follow a good investment process

Buy good business, don’t overpay. Grow the business.

This exact investment process determines the success of our firm. We’re planning to do it by learning from great mentors with the goal of becoming the best investor we possibly can.

6. Building a small niche business with $2-5 million in revenue has changed forever.

We are no longer living in the 1990s or early 2000s and your business is competing with the entire world.

It's time to become a networking machine.

Which might be even more important than just being a learning machine.

The best small business investors are those who NETWORK and LEARN.

1. Read and research as much as you can to become smarter every day

2. Connect and network with other business builders

Repeat and play the long game.

You can do much better than your competitors whose minds are still in the 1990s or early 2000s.

7. It’s all about quality

In the end, it’s all about quality. Again, we want to buy great businesses led by quality managers achieving quality returns.

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Why am I not going to buy public stocks you ask?

Because there is significantly less arbitrage…

At the end of the day, it's all about how you can buy $10 million for $3 million.

That's the question you should ask yourself.

This is only possible in private markets.

Slowly and steadily, I have started seeing such opportunities here on the Estonian market.

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We were in the country-side at the weekend. Enjoying winter. And my girlfriend told me something along the lines:

"Even though we've been together for years and years, I still think you're weird, you always think about work and you even find a way to work and read. And you're probably happiest doing that."

The strange part is that I found what I really love to do. 3-4 years ago it was not like that.

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BUSINESS UPDATE - we are open to raise bonds from Foreign investors.

Consumer lending company.

Investors can use a Nominee Account through their local bank which allows them to buy Modena Bonds through Nasdaq Baltic (https://nasdaqbaltic.com/) Message me if you want more info.

This week, fewer calls.

So far, within last 6 weeks we have 21 people/companies have decided to invest a total of $700,000+.

• Individual 1 - $30,000 over 1 year (12.5% ​​interest)

• Individual 2 - $5,000 over 1 year (12% interest)

• Company 1 - $50,000 over 1 year (12.5% ​​interest rate)

• Individual 3 - $5,000 over 2 years (12.5%)

• Company 2 - $10,000 over 1 year (12.5%)

• Company 3 - $50,000 over 3 years (13.5%)

• Individual 4 - $10,000 over 3 years (13.5%)

• Company 4 - $50,000 over 3 years (13.5%)

• etc.

Our goal is to consistently add $200,000 worth of bonds per month. (So ​​if you want to join us in co-investing, get on my list here and I’ll send you more information about it.)

We finance 20 to 40 customers every day, yesterday we financed $20,000.

When coming to Estonia, Tallinn, come and visit us, you will see more closely what we do. (I really mean it. Many investors have already visited us).

Take care,

Mikk aka PrivatEquityGuy

Lastly,

I have interviewed thirteen people on HoldCo Builders podcast. People have said they loved the show. Which is pretty cool.

Here’s the recent one with Val:

As always, thanks a lot for following the journey!