Search Party

Professionalizing the finance function of a lower-middle-market business is one of the most impactful forms of value-creation a new CEO can pursue, according to a panel of Entrepreneurship-Through-Acquisition (ETA) market experts. To learn the importance of the finance function in ETA investments, Search Party convened a conversation between Anthony Walker, Managing Partner at Next Coast Legacy, Sam Swan, CEO of TaskRay, Eric Lougher, CFO/COO of TaskRay, Emily Young, Transaction Advisory Manager at Boulay and Jake Bitz, Consulting Controller at Boulay. TaskRay is an ETA-backed SaaS company that saw its operations transformed when it brought on board Lougher as CFO. The story of TaskRay's professionalized CFO function is at the core of this authoritative, candid and lively conversation.  Among the key takeaways of this episode of Search Party: • A common feature of founder-led companies in the lower-middle market is a heavy emphasis on cash flow and little emphasis on forward-looking financial metrics. Anthony Walker noted that this dynamic often leaves new owners without the reporting foundation they need to lead effectively. “They've measured the performance of their business by how much cash is in the bank account," says Walker of many lower-middle-market founders. "They're not looking at sophisticated metrics or KPIs.” • To build a finance function that supports both operational decision-making and investor transparency, operators must first assess the starting point and align it with their growth horizon. Emily Young described this as a deliberate diagnostic process that should precede any hiring or systems decisions: “The first step is - know the business. Know where it is today, know where you want it to be tomorrow, a year from now, five years from now.” • For first-time CEOs, the limits of their own financial fluency often surface early. Sam Swan reflected on his own transition, recalling how the budgeting process made it clear that finance couldn’t remain an isolated back-office task: “It was a struggle and that to me was a pretty clear indicator that I need someone who could do this with me.” Ultimately, a professionalized finance function doesn’t just improve decision-making in the present—it lays the groundwork for eventual exit. Jake Bitz underscored that buyers, lenders, and future acquirers all expect reliable financial operations: “Hiring the key people and having that process put in place for how you close the month and how you report is the foundation.” Follow the Search Party video-podcast on LinkedIn: https://www.linkedin.com/company/search-party-channel Search Party Lead Sponsor: Next Coast Legacy https://lnkd.in/eSAuRW5p Search Party Sponsors: Avidbank https://www.avidbank.com/ Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf Mayer Brown https://lnkd.in/gU7sPPSg Oberle Risk Strategies https://oberle-risk.com/ Plexus Capital https://plexuscap.com/ #M&A #search #privateequity #eta #searchfund #insurance

Small insurance brokerages make for "great" Entrepreneurship-Through-Acquisition deals, provided the acquirer has a deep understanding of the industry, says August Felker, an ETA searcher turned CEO of Oberle Risk Solutions. In an interview with Search Party, Felker shares his personal ETA journey to becoming the CEO of a leading lower-middle-market insurance brokerage, starting with being raised by a father who ran a St. Louis, Missouri, insurance brokerage. (Felker's grandfather also was an insurance broker).  Felker discovered the ETA model while working for two Stanford MBAs who had acquired a lower-middle-market logistics business, an experience that convinced him he wanted to follow the same path in his field of expertise. “When I first heard of the search fund, I was like, this is the coolest thing I’ve ever heard.” Felker's ETA search was fortuitous in two ways: He identified the company he ended up acquiring within a matter of weeks, and he was connected to the seller not by an investment banker, but by the editor of an insurance trade journal. “I said what I was trying to do, and this editor was like, ‘I know someone who's selling their business in Madison, Wisconsin. You want me to connect you with him?’” The most stressful part of the deal came late in the acquisition negotiation, when the seller pushed back on final contract terms, such as the earnout and non-compete. “We were so far in and committed," says Felker. "That really threw me for a loop.” Felker explains how the most impactful move he made as CEO was to hire three top-performing producers who dramatically boosted sales: “It’s like recruiting an NBA all-star. They came in and were writing so much new business it just totally changed the game.” Oberle Risk Services provides insurance to ETA-backed companies, among other lower-middle-market clients. "The ETA community is a great community," he says. "How can you not like someone who's risking their financial future and moving across the country? I mean, it's just the coolest thing.” Follow the Search Party video-podcast on LinkedInk: https://www.linkedin.com/company/search-party-channel Search Party Lead Sponsor: Next Coast Legacy https://lnkd.in/eSAuRW5p Search Party Sponsors: Avidbank https://www.avidbank.com/ Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf Mayer Brown https://lnkd.in/gU7sPPSg Oberle Risk Strategies https://oberle-risk.com/ Plexus Capital https://plexuscap.com/ #smallbusiness #finance #lending #privateequity #eta #searchfund

In this engaging discussion, ETA veteran Chandos Mahon, Managing Partner at Castle Capital, reflects on his journey leading Castle Tire through multiple acquisitions, emphasizing the vital role of lenders like Conor Tidgwell from Avidbank. Anthony Walker from Next Coast Legacy adds insights on supporting searchers in lower middle-market acquisitions. The trio underscores the importance of treating lenders as strategic partners. Transparent communication and financial flexibility are highlighted as keys to navigating the complexities of debt structure and ensuring growth.

As a growing number of MBA students become interested in Entrepreneurship-Through-Acquisition (ETA), a proper understanding of the challenges involved in finding and running a business is essential, say Austin Fruchter and Rohit Datta, Co-Presidents of the Columbia Business School ETA Club.  The Columbia ETA Club provides students with exposure to the ETA process, connecting them with investors, operators, and service providers to better understand the search opportunity. “Search is a relatively lonely process,” says Datta, adding that the club also plays a crucial role in building a support network for students before and after they graduate. Over the past year, interest in Columbia’s ETA club has surged, with events doubling and more students engaging in the ecosystem.  In a candid interview with Search Party, Fruchter and Datta describe common traits among ETA-oriented MBA students. Many are drawn to the tangible nature of small business ownership, seeking to step away from high-level corporate roles in favor of hands-on leadership. However, misconceptions persist—particularly about the level of personal commitment and operational complexity involved. “Some students don’t realize how ‘dirty’ it can get,” says Fruchter. The co-presidents also highlight the robust investor ecosystem surrounding Columbia’s ETA program. Investor interest is high, and Columbia students are encouraged to engage with potential backers early. “You don’t want your first interaction with an investor to be, ‘Hey, I need money,’” says Datta.  Fruchter and Datta themselves plan to partner on a search fund after graduation, and they discuss the benefits of partnered search. “It’s incredibly impactful to have someone who pushes you and refines your thinking,” says Fruchter.  Datta, who previously co-founded a SaaS company, agrees, noting that the right partnership can mitigate individual weaknesses. Looking ahead, the Columbia ETA leaders see institutional capital increasingly moving into the space. But they hope the ETA community’s emphasis on people remains its defining trait. “The people in the business drive the value creation,” says Fruchter. “Taking care of employees and empowering your team is a major factor behind the success of search-acquired businesses.” Search Party Lead Sponsor: Next Coast Legacy [https://lnkd.in/eSAuRW5p] Search Party Sponsors: Avidbank [https://www.avidbank.com/] Boulay – Contact Boulay's Search Fund Team: [https://lnkd.in/eFF88SVf] Mayer Brown [https://lnkd.in/gU7sPPSg] Plexus Capital [https://plexuscap.com/] Search Party video-podcast website: [https://lnkd.in/efJEa6GV]

Katie Walker, Principal at Plexus Capital, discusses the financial challenges CEOs face in ETA deals, emphasizing that 'hope is not a strategy' for growth. Mark Mullins, a sales consultant, highlights the critical need for structured sales systems to optimize performance. Dustin Sellers, Managing Partner at Next Coast Legacy, shares insights on the urgency of operational improvements post-acquisition. Together, they explore how new CEOs must navigate the complexities of sales execution and growth in leveraged environments, urging realism over optimism.

Shortly after acquiring security-camera service ⁠EyeQ Monitoring⁠ nine years ago, Markus Scott had no way of knowing he’d eventually grow revenue by a factor of 24. He was too busy dealing with “a whole list of terrible things” that indicated the business was doomed. In an interview with Search Party, Scott says, before detailing these tribulations: “This is the place where I should be pouring bourbon.” Scott’s path to profitable growth is an Entrepreneurship-Through-Acquisition (ETA) success story, but it started as a looming failure. The day the acquisition closed, the first-time CEO learned an employee had been accused of sexual harassment. Then the company’s servers contracted a virus. Then the bookkeeper quit. Then the seller tried to start a competing business. Scott says the deep relationships he built with his workers ended up improving team culture, which impacted customer satisfaction. Scott grew up in a middle-class home in Gainesville, Florida. His father was a former San Diego Charger turned educator, with an entrepreneurial side business to supplement the family income. Scott says he, too, eventually wanted to build a lasting business. When he learned about the ETA model, Scott enrolled in business school at Kellogg, and eventually raised north of $300,000 for a two-year search.  After a “devastating” month-fourteen deal collapse, Scott eventually found a very small business in a great industry. His investors, including Next Coast Legacy, encouraged him to structure the deal like a growth equity investment. Scott was a walk-on linebacker and fullback at the University of Florida. While his time on the field was minimal, Scott says the discipline of daily, grueling workouts prepared him for the roughness of entrepreneurial life. Search Party Lead Sponsor: Next Coast Legacy⁠ https://lnkd.in/eSAuRW5p⁠ Search Party Sponsors: Avidbank ⁠https://www.avidbank.com/⁠ Boulay - Contact Boulay's Search Fund Team:⁠ https://lnkd.in/eFF88SVf⁠ Mayer Brown ⁠https://lnkd.in/gU7sPPSg⁠ Oberle Risk Strategies ⁠https://oberle-risk.com/⁠ Plexus Capital ⁠https://plexuscap.com/⁠ Search Party video-podcast website:⁠ https://lnkd.in/efJEa6GV⁠

An increasing supply of investor capital is chasing business-school students contemplating ETA as a career, and "search-curious" MBA candidates should know the risks involved are manifold, but well worth the journey, according to Matthew Conley and Daniel Lazier, Co-Presidents of the Kellogg School of Management's Entrepreneurship Through Acquisition Club. The Kellogg ETA Club was spun out of the school's private equity club in order to raise awareness of ETA, share best practices and help students self-reflect on whether their skills, personalities and life goals align with this non-traditional career path, say Conley and Lazier. In a frank discussion, the co-presidents discuss the growing popularity of ETA across MBA programs, and the personal qualities that Kellogg ETA club members tend to share, principally a desire to control their own destinies and pursue a more impactful form of business leadership. The search-curious at Kellogg tend to be "motivated by something different than money," notes Lazier. Conley says ETA tends to offer more "internal goods" than "external goods," meaning that while potential money and status may not be as stratespheric as one might find in private equity or investment banking, the intangible benefits of "seeing your fingerprints all over something" are possible in spades in an ETA career. In particular, having an impact on the lives of your employees and their families can be very gratifying, says Conley. The co-presidents describe the pleasantly "round-elbowed" ecosystem of the Kellogg ETA search ecosystem. The ETA club is a locus of activity at Kellogg, with potential investors sometimes visiting the campus several times per week. Lazier estimates that within the three-sided ETA market, demand from investors is highest, followed by interest from MBA students. The supply of available lower-middle-market businesses for sale, notes Lazier, is not increasing, and estimates that some 30% of searchers never find a business to acquire. Conley says that the ETA club aims to make clear the risks not only of not finding a business, but of being unable to successfully lead the business once acquired. That said, Conley notes that even searchers who do not ultimately become CEO of an ETA-backed business often find related positions in search-owned businesses and at investment firms in need of analytical and due diligence talent.   Search Party Lead Sponsor: Next Coast Legacy ⁠https://lnkd.in/eSAuRW5p ⁠ Search Party Sponsors: Avidbank ⁠https://www.avidbank.com/⁠ Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf⁠ Mayer Brown ⁠https://lnkd.in/gU7sPPSg⁠ Plexus Capital ⁠https://plexuscap.com/⁠ Search Party video-podcast website: ⁠https://lnkd.in/efJEa6GV⁠

Bob Boniface, an entrepreneur through acquisition, shares his journey in acquiring TransTech, a CDL training business. Joined by Anthony Walker, an ETA strategy expert, and Ryan Turbes from Boulay, they dive into the vital nature of quality of earnings during acquisitions. They discuss common misconceptions and the emotional dynamics of negotiations. The conversation reveals how crucial this process is in assessing true company value and managing seller relationships while educating clients on the complexities of financial metrics. A must-listen for future entrepreneurs!

In this engaging discussion, guests Anthony Walker and Dustin Sellers from Next Coast Legacy, along with Conor Tidgwell from Avidbank, dive into the intricacies of lower-middle-market transactions. They highlight how businesses acquired at single-digit multiples can be flipped for double digits through operational improvements. The conversation covers the growing demand for outsourcing in commercial services, the importance of customer retention, and the appeal of niche software investments. The trio shares insights on market trends and the critical nature of EBITDA in evaluating potential deals.

Women are making gains toward substantial representation in the Entrepreneurship-Through-Acquisition (ETA) community, and supporting each other along the way. In fact, 17% of ETA searchers in the market are now women. In a fascinating conversation, three ETA leaders compare notes about the appeal of the ETA search-fund career, the advantages women can have connecting with fellow entrepreneurs, and the challenges and misperceptions women confront in a male-dominated industry. This episode of Search Party includes Audrey Kohout, CEO of ETA company Luggage Forward, Tatiana Gaspar, Director at ETA private equity firm Next Coast Legacy and Katie Walker, a Principal at lower-middle-market capital provider Plexus Capital. Kohout tells the story of how her and co-searcher/co-CEO Jessica Palfrey looked all over the country for a lower-middle-market business to acquire and run before settling on a logistics company in Boston, owned by two men. A deal was struck due in part to shared values of hard work and humility that transcended gender. The experts also discussed the often-difficult balancing act of growing a business while also maintaining a personal life and, for women and men alike, growing a family. As Kohout puts it: "We're building our lives at the same time that we're building a company." Near the end of the conversation, the three compared stories of awkward moments that women can face when men assume they are not in positions of leadership.   Women's Search Network: https://www.womenssearchnetwork.com/   Search Party Lead Sponsor: Next Coast Legacy https://lnkd.in/eSAuRW5p Search Party Sponsors: Avidbank https://www.avidbank.com/ Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf Mayer Brown https://lnkd.in/gU7sPPSg Plexus Capital https://plexuscap.com/   Search Party website: https://lnkd.in/efJEa6GV