Jack
4.4K posts
@jackentr3
Acquiring & growing SMEs. Current rollup a $10M/year (with investors and partners). Not financial advice. RT≠ endorsement
First closing of the Dealonomy era today. Stoked it was @wshaw_9’s team on the buy side! 🥳
In 2026, equity from a sponsor is a must to close on a business acquisition Simply put, lenders want to see “skin in the game” or chips on the table Even if you have an investor group that you’re partnering with, a PG is not the same as cash dollars with how lenders look at deals
Alexandria Ocasio-Cortez: You can't earn a billion dollars. Ilana Glazer: That's right. AOC: You just can't earn that. Glazer: That's exactly correct. AOC: You can get market power. You can break rules. You can do all sorts of things. You can abuse labor laws. Glazer: Yup. AOC: You can pay people less than what they're worth. Glazer: Yup. AOC: But you can't earn that, right? Glazer: That's right. AOC: And so you have to create a myth that -- since you didn't earn that, you have to create a myth of earning it.
Lower Middle Market valuations are all over the place. Here are some valuations I have seen over the past month: 1. Residential Plumbing (1.8M EBITDA) - 4.1x 2. Residential/Commercial HVAC (2.1M EBITDA) - 10.5x 3. SAAS Company (1.2M Rev) - 5x Revenue 4. Pest Control ($2M EBITDA) - 16x 5. Home Service ($1.2M) - 7.1x 6. Building services ($900k EBITDA) - 3.7x
For those of you business buyers and buyout specialists who’ve seen different cycles: We see more competition, and the space is getting more crowded… The lower middle market tell: - MBA professors touting the ETA path - Savvy, gritty mid-careers flocking to the indy sponsor model - Higher-rate regime meeting sellers still anchored to lower-rate valuations - Committed PE pushing further down-market into lower-EBITDA businesses And… as the famous quote from the notorious Predators’ Ball, the 1988 book by Connie Bruck, goes… “There’s too much money chasing too few deals.”
We have this discussion a couple of times every week. Increasingly sellers are price driven (vs legacy, etc). They view this as the funding of their retirement. So any discussion about a trade, must *first* solve their retirement funding issue. Better to focus there.
Have you seen the kid on social media who interviews rich people on the street and asks them "what they do for a living?" A big PR guy told me it's all fake/scripted. Pitched/sold to rich wannabe influencers to reach a younger audience. All staged.
