Intentional Growth #232: My Vanity Metric is Cash Flow: How SureSwift Capital Acquired 38 Businesses in 5 years
By focusing on the right metrics, like cash flow and enterprise value, and combining these with the right strategies and use of capital, Kevin McArdle was able to quit corporate America and buy a couple of small online businesses that he snowballed into a portfolio of 38 highly profitable SaaS companies doing eight figures in revenue. Tune in to hear how he did it and what Kevin and SureSwift Capital are doing to take their growth to the next level.
What You Will Learn In Today's Podcast Interview
- Why Kevin left corporate America to start acquiring businesses.
- SureSwift Capital’s unique business model that flies in the face of traditional private equity firms.
- How SureSwift Capital went from buying $50k websites to multi-million-dollar businesses.
- Why Kevin and his partners decided not to raise money for a fund — at least with the first 38 companies — and why they’re raising funds now.
- How Kevin finds SaaS companies to buy that are highly profitable, inherently more risky and highly scalable.
- The best ways to use the profits of a company to fund organic growth and acquisition.
- Why acquisitions are a team sport.
- How to buy a business and get your money back in 24 months.
- Why the smartest entrepreneurs make it their job to replace themselves.
- How SureSwift Capital creates more valuable companies after they make an acquisition.
- Questions to ask if you are talking to private equity or another professional business buyer.
- How information asymmetry impacts the deal negotiation.
Are You Growing The Value of Your Business?
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- Are you company's current initiatives intentionally designed to increase the value of the business?
- Do you know what you want from your business long term and why?
- Do you know what your company is worth?
- Do you know the differences between Management, Family Transitions, PE Firms, ESOPs and Strategic Buyers?
- Does the business have a written strategic plan on how to achieve the desired normalized EBITDA and valuation?
About the Guest:
Kevin McArdle is the co-founder and CEO of SureSwift Capital, which acquires SaaS businesses from independent founders and takes them to the next stage of growth. They acquired 38 businesses within five years and recently completed the raise of their first private equity fund for their next investment.
Kevin’s passion for personal relationships and driving business results are at the heart of SureSwift’s impressive growth to date. Prior to founding SureSwift, Kevin was a Vice President at Cerner Corporation, a global Healthcare IT firm. In his 15-year tenure at Cerner, Kevin held positions in sales, sales leadership, operations, general management, and client management, eventually becoming one of the youngest Vice Presidents in the company’s 35 year history.
Quotes:
11:15 - “We’re buying businesses that are inherently riskier than a brick-and-mortar business. There are no assets to be auctioned off.” – Kevin McArdle
12:22 - “Buy-and-hold is a strategy for us, it’s not a religion.” – Kevin McArdle
19:04 - “Being burned once or twice are always good lessons. Making mistakes are always good lessons. Working has really taught me more than just sitting in a classroom and learning about business.” – Kevin McArdle
23:30 - “There’s this odd segment of the world-wide economy that is massive, yet most people don’t even know it exists.” – Kevin McArdle
30:10 - “The profits of that business should fund that business.” – Kevin McArdle
34:50 - “Acquisitions are very much a team sport.” – Kevin McArdle
35:35 - “The smartest owners know to start replacing themselves.” – Kevin McArdle
39:25 - “My vanity metric is cash flow” – Kevin McArdle
Links and Resources:
Twitter: @kevin_mcardle
Mastering Your Cash Flow Digital Course
Reach out to me if you have questions about the boot camp!
You can also reach out to me via email at rtansom@arkona.io, or on my LinkedIn.