ETA·BRAIN

Acquiring Minds

How to Structure Around Risk in a $250k SDE Acquisition

Excerpts · 312 segments · ~1:16:57 long

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And so I was looking at those macroeconomic factors and thinking if I can build in some digitization, some efficiency, some certainly more lead generation and marketing than was occurring at that point, and ride some of the macroeconomic factors, I think most of which are still valid, I could grow it beyond the size that it was already and therefore have the SD to afford those things and maybe…

Okay, great, Alicia. So that's kind of a thesis, if you will, or the hopeful tailwinds for this business. What about the actual, you know, dollars and cents that we're going to come out of it or we're not going to come out of it for the family, for your income in the, in the near term?

Yeah. I think, you know, this is a family investment certainly, and I'm obligating my families to a significant portion of debt should this go poorly. I should note also one of the concessions I negotiated was a 50% personal guarantee instead of 100% personal guarantee on the seller note. Oh, good. Which helped with the family calculus.

If things did go very, very poorly. We felt like we could probably manage that, but for a good portion of our marriage, I had kind of the stable corporate job and my husband was kind of dancing around in startups and doing some small business things.

And we made a large family decision, I guess, to do a switch and that it would be my turn to do the entrepreneurship and the small business and that it would be his turn to take a more secure corporate job with the healthcare and all that stuff. And so we switched. And I'm so thankful to have his support through all of this. He's not involved in the company or in the construction in any way, but…

You know, I don't think I can go without a salary indefinitely, but for, for the meantime, that's how we've managed it.

So he has a corporate job and you are not taking any salary. So is that. Did I get that right?

So all. Any, any and all earnings coming out of the business. In fact, you're reinvesting back into the business.

Okay. Any thoughts on. On that approach? Given that for a lot of people, the reason. One of the big reasons to do ETA is because you can have immediate salary, even if modest. This, this, you know, it's, it's interesting, Alicia, your story, because there's.

In some ways there appears to be a lot of risk just because It's a small GC. And GCs are harder businesses to get financed. They're more challenging businesses.

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How to Structure Around Risk in a $250k SDE Acquisition · ETA Brain