Dennis Unrein, a micro VC and founder of Private Ventures Group, shares insights on the evolving landscape of private equity focused on small businesses. He discusses the crucial differences between EBITDA and SDE metrics, helping buyers make informed decisions. Dennis highlights the unique opportunities in acquiring retiring baby boomer-owned businesses, particularly in niche industries like elderly care and telecommunications. The conversation also covers the benefits of self-funded searches and how Special Purpose Vehicles can simplify investments.
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insights INSIGHT
Searcher Models
Traditional searchers operate like small private equity funds with formal boards and investor involvement.
Self-funded searchers utilize SBA loans and online tools, focusing on smaller deals.
insights INSIGHT
SPV Explained
SPVs (Special Purpose Vehicles) are simple investment pools used for various deal sizes.
They provide a clean investment entry for companies and simplified tax document distribution for GPs.
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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! __________________________
Love it or hate it, I'd love your feedback. Please fill out this brief survey with your opinion or send me an email at Nik@cofounders.com with your thoughts. __________________________
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
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