Entrepreneur | Active in Lower Middle Market M&A at Perservera | Happily married 23 years and father of 3 | LDS
Salt Lake City, UT
Joined November 2008
- Tweets1.5K
- Following893
- Followers991
- Likes7.4K
Dave retweeted
Hey, I’m looking for someone to help us with acquisitions and integrations at Big Rock.
Basically someone who can walk into a 30-person company where the owner has done everything his own way for 25 years and get the team onto our systems and processes without causing half of them to quit.
Between deals, they’d be plugged into our operations.
Please forward this to anyone you know that might be a fit!
Dave retweeted
2 yrs ago, I started my HVAC biz with zero experience—didn’t even know how to open a furnace.
Now, we’re on track for $12M in revenue this year, and employ 50+ amazing people.
Being a refugee here it’s hard for me to take people seriously when they complain about this great nation.
Dave retweeted
M&A isn’t always fun.
Here are a few tales from this past year.
#1 Friend took a company days from bankruptcy and turned it around several times, spent 7-months working on it for practically nothing.
- Found a PE firm to buy it last minute
- Negotiated a comp package for the terrible CEO who ran it into the ground for 1 year after after close
- Was promised equity and a lot higher comp package with the PE firm. PE firm said they wanted the deal because of him.
- Deal closes, PE firm shutoff payments to any vendors, take over finance, shutdown payroll, company is still thriving and $1M in profit, didn’t increase his comp, didn’t give him equity…freaking love him to death.
This is why people hate PE firms.
#2 Friend closes on an acquisition.
- Seller flat out lies to her about a number of items.
- Seller is supposed to train and work post close and quits shortly after closing.
- She then has 100% employee turnover…100%!!! Still maintains clients and somehow survives. She’s a rockstar!
#3 Acquisition closed
- EBITDA is half of what was in the QofE and seller disclosed.
- Concentration risk is 30% instead of 10% and biggest clients cut bill in half during the year.
- Seller said leads were dropping out of the sky… Reality zero lead flow, forced to start sales and marketing from scratch. Buyer still manages to increase YoY revenue and cut expenses and is now on an upward trend.
Be careful who you work with and make sure you over capitalize your acquisitions, thank me later.
Dave retweeted
Utah Tech Week is one of the best celebrations of Utah’s tech community — grassroots, community-driven, and full of big ideas shaping our future.
I’m excited to lead a session tomorrow w/ @ProvenCFO on acquisitions, financial diligence, valuations, and uncovering real value in M&A.
Big thanks to @TrentMano for organizing such a great week! Hope to see some familiar faces tomorrow.
Dave retweeted
Former Green Beret looking for a role.
(I receive nothing for this)
Tom Stanley. American badass 🇺🇸
-BS in Accounting & Business Management
- Green Beret, Officer, 10 years of service
- Completed Skillbridge internship with an Alpine-backed company, Apex Services
Looking for:
- Management roles, particularly in PE-backed companies
- Sample roles: VP/Director of Operations, VP/Director of Special Projects, Chief of Staff
- Lives in & looking for opportunities in Nashville, TN
Dave retweeted
Searchers/SMB owners: If you want to create a lot of value (and wealth), the metric you should be most focused on is intrinsic value per share (or unit/membership interest if structured as an LLC), which is largely derived from cash flow per share.
Total revenue, EBITDA, FCF, number of employees, number of customers, etc. are all just vanity metrics. Looking at these numbers alone don't tell you anything about the value that has been created to get there.
Consider the following example:
CEO A grows revenue 20% from $10m to $12m and expands EBITDA margins 50% from 10% to 15%. EBITDA has grown 80% from $1m to $1.8m. CEO A was able to achieve this without issuing additional equity (shares/units remained flat at 1m) and her common equity ownership remained flat at 80%. CEO A's company generates cash flow per share of $1.80.
CEO B completes a large add-on acquisition, which doubles EBITDA from $1m to $2m, but he had to issue 50% more shares/units/membership interests (from 1m to 1.5m) to finance the acquisition. This reduced the growth in cash flow per share growth rate to 33%. CEO B's company now generates cash flow per share of $1.33. Also of note, CEO B's common equity ownership has declined from 80% to 53%.
While CEO B's company now generates more cash flow than CEO A's company, CEO A created 35% more value (and wealth) for herself and her investors.
This compounds even further over time. Let's say CEO A grows revenue another 20% and expands EBITDA margins another 20%. Meanwhile CEO B completes another $1m EBITDA acquisition but has to issue another 500k shares. CEO A's EBITDA is now $2.6m and cash flow per share is $2.60. CEO B's EBITDA is now 15% larger at $3m, but his cash flow per share is 40% lower at only $1.50.
Of course, if CEO A can also complete an acquisition without issuing any additional equity - using cash on hand and careful structuring of debt, seller notes, and/or earnouts - then she will achieve the holy grail of SMB ownership!
Bottom line, searchers/SMB owners should focus on growing cash flow per share (or unit/membership interest) over simply growing vanity metrics like revenue, EBITDA, enterprise value, etc.
Dave retweeted
This isn't going to make me any Twitter friends, but...
Searchers, you don't need another coach, guru, course, podcast, book, blog, etc. There's no secret sauce. Spending more time learning about search (beyond the basics) is just an excuse to not actually go and do the work. At some point, you have to get out there and do the work. That's the real secret sauce!
Put your Twitter/X down; go browse business listings; find interesting industries and conduct targeted searches around them; call/email dozens of brokers; sign hundreds of NDAs, read hundreds of CIMs; have calls/meet with dozens of sellers; submit LOIs; perform due diligence (alongside your accounting, legal, and insurance team); experience a failed deal, or three; learn from your experiences and mistakes; and eventually you will close a deal (which is when the real work starts).
Bottom line, get out there, turn over a lot of rocks, kiss a few frogs, and you'll eventually find your prince charming.
🪨> 💋 🐸 >💎
Dave retweeted
I’ve always wondered how CEO’s run billion dollar companies and thought "could I do that?"
Then I learned from a friend at Salesforce how Marc Benioff does it with his executive team, and it blew my mind how simple it was.
Here’s how he does it:
1) Each team leader submits a plan (grow 20% is Benioff’s metric)
2) If you’re hitting the plan, meet once a quarter.
3) If you’re missing the plan, meet once a week (until you hit the plan)
4) Ask: What got done? What worked? What didn’t work? How do we know it worked?
A BILLION DOLLAR company running a playbook so simple you can run it with a small team.
Dave retweeted
Got a business acquisition deal in your sights?
Get under LOI sooner than later if you wanna close by year’s end.
Because of end of Q3, most banks won’t give you the time of day next month unless you’re already working with them.
Then it gives you just 3 more months to close.
Dave retweeted
If you want more followers:
Put your damn accomplishments in your bio! And I'm not talking about Forbes 30 under 30.
You may think it's bragging, but its the only way to get somebody's attention in the 3 seconds you have.
Don't hate the player, hate the game!
Dave retweeted
There's a BIG problem in SMBtwit, and I'm going to call it out.
I've spoken to many of you 1:1 over the last few months, & learned some tough things.
I think we've been dead wrong about searching, buying biz's, and entrepreneurship here.
Get ready for a truth bomb...
Dave retweeted
Self-funded searchers are always asking how to structure equity when taking on investors. Investors in self-funded search deals typically expect to receive participating preferred stock. Here's what that means and an example. 🧵
Dave retweeted
I've seen people lose their entire business & livelihood because they were cheap (or just didn't know any better) by setting up bad (or no) Operating Agreements
I'm in the process of redoing all mine & here are the top 10 things that can really screw you:
Dave retweeted
If you want to buy a business, Twitter is a goldmine of expert knowledge.
But most people don’t know where to look.
Here’re 20 accounts sharing incredible ideas in the SMB M&A space (for free):
Dave retweeted
I've often believed the lie that if I only got this, or did that, or was included with them, or achieved this milestone that life would finally be good.
Helpful for my soul to see Dax Shepard shatter that illusion.
Dave retweeted
Finally, all the info you need about #SMB acquisitions is in one place.
Do yourself a favor and check it out.
hubs.ly/Q01N9b2h0
