Acquiring Minds Why Chenmark Bought a Boat Tour Business
Jul 12, 2022
Trish Higgins, co-founder of Chenmark, dives into the fascinating world of small business acquisitions. She explains why they chose to buy a seasonal boat tour company, Cap'n Fish Cruises, despite its challenges. Trish discusses the unique holdco model, its difference from traditional finance careers, and why it isn’t widely taught in schools. She shares insights on managing seasonal cash flow and the quirky 'bait-and-tackle' investment approach. Plus, hear about the lessons learned while transitioning ownership and the beauty of taking risks in unexpected industries.
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Holdco Strategy Built For Long-Term Compounding
- Chenmark founders left finance to buy fragmented small businesses with durable demand and long-term ownership in mind.
- They prefer internally funded, compounding growth over raising funds or chasing quick exits.
Fund Growth From Operating Cash Flow
- Chenmark uses cash flows from existing businesses to fund future acquisitions instead of external capital.
- This internally funded model increases alignment but slows personal cash compensation early on.
Weigh Short-Term Pay Versus Long-Term Net Worth
- If you compare the holdco path to private equity, expect lower near-term pay but higher long-term net worth upside.
- Decide which horizon you prioritize before choosing between operating a holdco or taking PE pay.
