Sub-$10m cash exit but now a little lost

Business Buyer and Builder,

This week I received a call from a traditional business owner who I’ve built a relationship with over the past year.

He’s 51. He built a $2.5M EBITDA niche business in a growing market, sold it in December 2025, and made a lot of money.

He said he is a bit afraid that this great success has the potential to make him fragile. He added that currently he does not have much to do on a day-to-day basis (not used to it), and he already feels some of the pain of losing his fortune, and that it exceeds the emotional gain of gaining additional wealth.

I haven't had this experience myself... although he's a great guy, and I'd like him to give him some fresh new ideas.

That said, I posted this on X, and within a few hours, folks shared great ideas that I already shared with him as well:

1. ”An easy next step is to start consulting in a similar space and then find out other challenges these businesses are facing then go solve that.”

2. ”Go find some chaos + bring order to it

Can’t find chaos? Go hang out with some other business owners + listen to where they are at

You don’t know how valuable you are until you put yourself in a new situation”

The gentleman who sold his business called me, laughed a bit, and said he got a little emotional while reading the comments. “Time to find some chaos,” he said.

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Very interesting chart from KKR’s 2026 outlook showing that capital-light businesses have outperformed capital-intensive businesses over the last 35 years.

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Here's a frustration I’ve heard when it comes to accessing great lower-middle-market deals:

"I know the lower middle market is where the real deals are, but every fund wants $500K+ and locks me in for a decade."

Knowing the space well, you already understand that a $10M dumpster company acquisition with a solid operator beats another SaaS Series B. You know searcher and independent sponsor deals outperform. But the minimums and structures have maybe kept you watching from the sidelines?

Our sponsor CapitalPad solves this. It's a platform for deal-by-deal private equity investments in the lower middle market. You review each opportunity, conduct your own diligence, and decide deal by deal. Minimums start at $25K.

Accredited investors only, and they're selective about the deals they present. But if you've been waiting for a way in: capitalpad.com

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As weekends are for thinking and strategizing, I want you to remember how young, smart people with no rules build great businesses:

- Acquiring $2-17mm EBITDA traditional companies

- Immigrant founder family office

- Raising tens of millions to back independent sponsors

- Water/waste utility services

-Equipment finance for blue-collar rollups

- Wealth management services for San Francisco area enterprise SaaS developers

-Credit + co-invest for indie buyers

- Local “Main Street” buyout fund

-Carve-out specialist for <$50mm EV “corporate orphans”

- Fire safety services platform

- Vertical SaaS + services hybrids

- Sell-side advisory for bootstrapped B2B service companies

- Owner-operator continuity fund

- Working capital fund for Amazon/retail wholesalers

- Landscaping B2B focus

- Wealth platform for athletes/creators

- Diligence-as-a-service (<$25mm deals)

- Niche manufacturing holdco

- Secondary LP interests micro-fund

- Route-based services roll-up

- Operator and investor match network

No matter what one builds, it is important to understand that there are literally no rules for success.

J.K. Rowling, based on her words, winged it her whole life and then went on to sell over 600 million copies worldwide.

Which leads me to another story about how a young, smart person with no rules built a great investment firm:

This week I had a long conversation with a gentleman who finished high school in Europe, then moved to the US. Went to an Ivy League school, then spent a few years as an investment banker and years in large-cap private equity.

Then wanted to build his own firm. Started looking at the opportunities and competition in both the US and Europe . Ended up coming back to Europe to put together a team and raise a fund.

Started fundraising in 2012, first investment in 2015. $100M fund. Today, he invests from Fund II. $180M fund.

Some observations:

>biggest competitor is always the founder of an exceptional business who refuses to sell

>minority/majority investments in $1–5M EBITDA companies; build and grow to $10M+ EBITDA, sell to another PE/family office/strategic

>a small team of 9 people at the HQ

>sector focus is technology and industrials

>don’t exhaust your whole team before selling your portfolio company

>finding a business with upside for the business and team in place aka meat on the bone

>some of the best MOIC deals have been MBO deals by folks approaching them with a clear thesis

>from day 1 he knew he preferred to own 30% of a smaller $300M fund than 3-5% of a $3B fund

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I believe that ultimately, most entrepreneurs and investors don't want to be remembered for anything. They don't want to win awards. They just enjoy solving complex problems because they enjoy solving complex problems... all while trying to make the lives of their family better. The lives of the people around them, the lives of the people they care about. And when they're gone, they're gone.

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My father is 64, we call each other every day.

He knows my goals, desires, and work ethic very well.

• Twitter

• The podcast

• Everything we build on the backend

Of course, there are good days and days that are not good.

Yesterday he told me:

"Never envy the rich old man and just enjoy the ride. Sounds like you're having a lot of fun."

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Special situations in the $1-15M EBITDA market.

Timeless acquisition lessons after learning from Jeremy Giffon, who’s been part of at least 20 lower middle market acquisitions

1.  Think beyond numbers. We once offered $25 million and a Ferrari 488.

2.  Best companies are getting paid an absurd amount of money for their words alone.

3.  I want to buy from forced sellers, not willing sellers.

4.  The best assets in the world are unloved, orphaned, and misunderstood.

5.  If you’re doing deals just to stay busy, you’re going to underperform someone who waits for the fat pitch.

6.  Leverage isn’t just financial. It can be social as well.

7.  You don’t need to be a genius to win in investing. You just need to see the game differently than everyone else.

(I kindly asked him to come on the podcast, and he said he is not doing these at the moment. I did the second-best thing and over the years listened to all his podcasts and researched his X account.)

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

That’s all for today.

Thanks a lot for reading and I’ll talk to you again very soon.

Take care,

PrivateEquityGuy / Mike Markus