The convo about whether ETA is risky etc etc has gotten too general Not all business acquisitions are created equal. Even ones with a lot of leverage, PG, and limited operator experience can be very different We need to focus more on the TYPE of biz. Obviously, this hugely influences the risk of your deal. If you’re thinking about buying a small business, you shouldn’t just think about the risk of the debt, your lack of experience, and overall business acquisition. You need to think about how the business you buy and the industry your in influences your risk. Not all ETA is the same. For context, I bought into an industry I didn’t have experience in with PG and a lot of debt. Plus investors. If not obvious, my biz now also sells services to ETA. Just so all my cards are on the table Inexperienced operators buying a business (some with a lot of debt some without) has been around for decades. Stanford has its study, Harvard has its book. @walkerdeibel has Buy and Build. There are dozens of investors who have been doing this for decades. There’s nuances, and different perspectives on the margin, but ultimately, they’re all guiding towards a simple, obvious concept. The foundation of ETA. Buy a good business in a great industry at a reasonable price. Put a very hungry, talented, albeit unproven, operator in at the helm, and the protections of the first sentence (biz, industry and valuation quality) should provide enough cover for the person to make a ton of mistakes, learn, and then generally grow and emerge out the other side successful. Obviously this is a comically simple concept. It frustrated me a lot when I was searching. Heard it from investors all the time. I was always like “well duh, of course that’s what I want to buy”. But now 2.5 years into operating I’m a pretty strong believer in many of the ETA frameworks, even if they’re offensively simple at times. Is buying a business as a young operator risky? Yes But if you buy a good business in a great industry, you will do a ton to de-risk it. If you’re evaluating the risks of ETA, focus on the risks once you’ve bought a decent business in a good industry, not just the general risks of buying a business. That’s just too general. Are there people who bought in a tough industry or bought a bad biz and still crushed it? Yes, of course. And there are exceptions the other way. But the vast majority of all ETA deals that get done, and especially the successful ones, check most of the boxes. And many of the ones that went south obviously did not check critical boxes So if you’re thinking about doing ETA, and you’re evaluating the risk, make sure you’re thinking about it through the lens of what you’re actually buying, not just the overall risk of buying a biz. Buying a project based business with <$750K SDE? Incredibly risky. Think construction related. Buying a consistent revenue business with scale in a good industry? A lot less risky.

Back in PE, I thought @elonmusk was crazy and delusional. No way someone can think that different MAN has my perspective flipped Textbook CEO: 1. Huge vision 2. Get a great team 3. Hold everyone to high standards 4. Play the long game We can all learn so much from this

And so it begins! 11 days through the month. 75% of our Claude usage gone Is the ROI there yet? I don't know But now is the time to experiment. To learn. Do or die over the next 5 years in our space...

One of the underrated things about running an smb FORCES you to learn positive attitude/resiliency You WILL get punched in the face. Way more than corporate. So, either you winter, or you learn to push forward One of the many things about running @systemsixbooks I’m thankful for

Super proud of our latest NPS score - 72. Right in line w/ our last score (6 months ago). Team works so hard for this 300 or so clients #1 reason promoters love us? “Responsiveness” Point is, in ProService, human touch points are what matter Not your internal AI workflow

Super excited for tmw's Bay Area SMB acquisitions happy hour as always - thanks @ITTotalCare for organizing! 530. San Carlos. Hapa's Brewing Remember - ETA is a great place to park @SpaceX windfalls - 100% PASSIVE INCOME! Bad jokes aside, look forward to seeing folks tmw..

I tell people all the time One of the biggest changes from W2 life (even in long hours PE) is when you own a biz, you’re never off I’ve taken way fewer full week vacations But way more random Fri, tues, or leaving behind the phone for a Sat family day Choose your hard

Buying an SMB keeps getting harder and harder: 1. New SBA limits mean more access to debt 2. PE firms have more $ than ever. I spoke a multi-billion dollar fund yesterday that launched a new strat for $1-$3M EBITDA biz (😉) But you can still win How to win? I think you either need to (1) raise a bunch of $ and just join the fast moving rollup playbook. Or, Have a real, differentiated angle. Build real relationships w/ sellers overt time. A real story as to why you are buying in this industry or GEO. Probably buy smaller, grow organically, then position yourself as an industry inside buyer (that's our story) Either join the competition, or stay hyper focused on how you standout If you just want to be the next girl/guy buying $750k-$1.5M of SDE in a hot industry, it just keeps getting harder

Sad that living in CA now, the WHY behind today often feels like an afterthought. Many here are so far removed from war. Growing up in DC area was so different, especially post 9/11 I know I'm lucky to wake up with my family today, do a hard workout, spend some time on @systemsixbooks, and wrap up the day again with family and friends So many can't Remember what today is about, and try to live tomorrow a little better because of the folks who gave it all so we can

Heading into a long weekend knowing I have complete control to be 100% present when I want is amazing. Thankful But at the same time, planning windows when I can focus on work, bc so much appetite to push right now 3 days fully off feels weird right now Perfect microcosm of doing your own thing. So freeing and so far from that at same time But, incredibly energizing 🇺🇸🥍🧑‍💻

Having good relationship w the seller is MISSION CRITICAL in SMB M&A TRUST You are going to NEED them post close Something will go wrong Don't be an a$* and make them hate you Also, if they are a prick during the closing process, I'd walk Only work w trustworthy sellers

Partner workout at gym today Odd #, so I "got" to partner with the coach Got totally bodied, but found a gear along the way I hadn't found before Reminder, I can push myself, but often, accountability to others pushes you harder Lot to be said for buying an SMB with a partner... It HAS to be someone you deeply know and trust But IF you have that, IMO, 1 1 =3

Holy margin Need to get into stadium sales!

But if YoU TalK abouT pRotEctinG LegacY, straight To tHe toP

Just had another buyer tell me in a kickoff call they work "5 hours a week in the business". Felt very trained by broker to say that Idk about y'all, but that is such a yellow flag for me They are either (lying) or just not invested, which usually means cultural issues Am I crazy? I just haven't yet met a good <$5M rev biz with a truly "passive" owner @JackieHirsch_ @ClintFiore what say you? Is this ever actually true.... Oh, and this seller wants >$12M on a $1M acct biz that it isn't growing 🤡

Our job app has a few written ?s Every answer from a great candidate today starts: "Here’s a strong, results-driven response you can use: or something" Happy they are using AI But copy paste w/o removing the header Disqualifying attention to detail IMO Agree? Too harsh?

Super fun getting to kickoff @SMB_ash last week in #DFW Shared the highs AND lows of the @systemsixbooks and my own personal journey Tried to get a lot of takeaways across, and will reiterate a few here over the first couple of days First - as you think about whether to do this (buy an SMB) and HOW (traditional, self-funded, holdco, etc).... 1. Pay attention to what ENERGIZES you. There is no model or podcast that will tell you what to DO. People have crushed in every model. People you also would never expect to fail have crashed hard in every model. No right answer. Listen to all the paths, learn, and do what energizes you. Best chance you will grind through the difficulty by choosing a path that works for you 2. Really understand TIMELINE. This is a usually 7 year bet. 1-2 years searching, 5 years running your business, usually longer if SBA. Are you willing to stay in the game that long? To likely defer your big payday? Also, if in today's AI world, you must think about AI risk on that timeline, too. #ETA #Selffunded #passiveincome

If you're going to SMBash this week - come check my talk tomorrow - "100% LEVERAGE, OPERATORS, AND PASSIVE INCOME" 🃏 Kidding... I am headed back to Dallas today (2x in 3 weeks!) - an emerging (or already emerged!?) hub for all things small / medium business acquisitions for @SMB_ash And I am honored to be a Keynote this year for moderated conversation - take it easy on me @TwoTeesSMB But, this is not sales / BS on how easy this is. We've worked hard to craft this as a REAL conversation Not a buy a SMB with an SBA loan, "hire an operator" and just collect checks Hiring, firing, winning, losing, personal wins, personal stress and doubts, growth, margin compression, margin expansion, late nights, autonomy, energy EVERYTHING that buying, running, and scaling SMBs is - with a deep look at the @systemsixbooks experience Look forward to a couple great days in DFW, and if you're missing the event, just reach out. Always happy to share my and our story in the ecosystem #smbash #eta #selffunded #traditional #holdco

Sometimes, you just gotta chuckle Received an NDA that: 1. Asks for a $2500 NON REFUNDABLE fee for the CIM. But don’t worry, I get the teaser for free! 2. Makes me warrant I have access to $20M (this is a $1m ebitda biz max…) 3. Says for certain pieces of data, only 3rd party advisors can review, not any “operational people” at the company @ClintFiore @JackieHirsch_ dang you guys are getting aggressive! ;)

Right now is a TIME to be in Prof. Services Might be great, might be terrible. See signs both ways Working more hours than probably ever at @systemsixbooks. Sometimes I like that, sometimes not ~30% organic growth last Q; 60% w/ M&A YoY. Our first $2M rev quarter. More stressed, more on my plate than before. J curve continues... But, CONTROLLING this is one of the best things about acquiring and running an SMB Took a big chunk off this AM off to take my daughter to her first dentist Meant I worked till 2 last night to get some stuff done ahead of this AM Some days, I wonder if this was the right path Some days, I'm insanely thankful for the energy, control, and opportunity in front of me Want to speak truth to all of this - it's not always up and to the right. Even if it looks that way from outside. We've all heard of the duck coasting on a lake... But if there's one thing I do know 10000% - it's how much I love the accountability in running an SMB and how energizing it is. In many ways, input still equals output for a long time. I love that. How much control, how accountability all flows back to you. Not corporate motions. Just you and the mirrror. Truly the 🇺🇸 dream.