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Join me Nik (https://x.com/CoFoundersNik) as I sit down with Dennis Unrein (https://x.com/dennis_unrein), a micro VC and SMB-focused investor, to discuss the evolving world of micro private equity and self-funded searchers. Dennis shares his journey from JP Morgan to launching Private Ventures Group (PVG), a firm that helps high-net-worth investors and family offices tap into private markets. We break down concepts like SPVs (Special Purpose Vehicles), the difference between EBITDA and SDE, and how to use media-driven strategies to find compelling deals.
In this episode, we also explore the growing trend of acquiring businesses in niche industries like elderly care and telecommunications testing, and why investing in retiring baby boomer businesses offers unique opportunities.
Questions this Episode Answers:
- What is a self-funded searcher, and how does it differ from a traditional search model?
- How do SPVs simplify investments and deal flow for small businesses?
- Why are retiring baby boomer-owned businesses a goldmine for acquisitions?
- How can SDE and EBITDA metrics guide smart business purchases?
- What are the best industries to invest in right now for small-scale private equity?
Enjoy the conversation!
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This week we covered:
00:00 Understanding Investment Metrics: SDE, Cashflow, and EBITDA
02:55 Navigating the Micro VC and SMB PE Landscape
05:47 The Shift to Self-Funded Searchers
09:07 Exploring the Self-Funded Searcher Model
11:54 Differentiating Between SDE and EBITDA
15:08 Demystifying Special Purpose Vehicles (SPVs)
21:05 Understanding Investment Entities and K-1 Partnerships
22:58 The Financial Burden of Self-Funded Searchers
24:24 Equity Structures in Self-Funded Searches
26:44 Navigating Debt and Equity in Business Acquisitions
29:40 The Risks of Operator Dependency in Self-Funded Deals
31:58 Building Deal Flow Through Content Creation
34:54 The Two and Twenty Model Explained
36:23 Advisory and Investment Strategies in SMBs
38:49 Identifying Opportunities in the SMB Space
