From Searcher to Sponsor: How to Buy a $22m Business

Today's guest was looking for the standard target of a self-funded searcher, $750,000 to $1.5 million in SDE. When he first learned about the business he would go on to buy, the seller characterized it as, quote, north of a million in EBITDA. Check, it was a fit.

Well, after going on site and falling in love with the business, our hero, Jan Vanarsky, learned that, in fact, the business was closer to $4 million in EBITDA. At first, Jan was deflated, recognizing it as a far larger business than an SBA loan could approach, even with Paraposu debt. But then he had a call with Nicholas James, my own partner in Mines Capital.

Nicholas, a veteran of the independent sponsor world and himself a sponsor, said, Jan, I think this is an independent sponsor deal. That 30-minute call changed the trajectory of Jan's journey to buy a business. And today, he is an independent sponsor, having bought that very business, FloorGuard, a Chicago-based manufacturer of floor coating solutions.

So today's interview will teach you how to acquire a much larger business, should you happen to find one, using the independent sponsor model. Jan's story is a wonderful case study. I'm thrilled to bring it to you.

And if you are interested in other stories of independent sponsors buying large businesses, check out the Minds Capital podcast, our sister podcast that features stories like those. Every Wednesday, we drop a new episode. Here is Jan Vanarsky, CEO of FloorGuard.

There are a handful of legal diligence issues that arise again and again for entrepreneurs buying a business. What are they? Well, attorneys James David Williams and Bill Barlow return for an office hours to walk you through them. And of course, how you, business buyer, should address them to protect yourself while still getting your deal across the finish line.

That is today, Thursday, July 17th, noon Eastern. The webinar is Common Legal Diligence Issues and How to Handle Them. Link to register for the webinar is right at the top of this episode's show notes or on the Acquiring Minds homepage, acquiringminds.co. See you at noon.

Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs. And on this podcast, I talk to the people who do it.

What do the following Acquiring Minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Sharag Shaw, Shane Ersom. They all went through the Acquisition Lab, the accelerator and community for people serious about buying a business.

But they represent just a sliver of the lab's success stories. The number of deals across the lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business.

The lab offers a month-long intensive, almost daily Q&A sessions with advisors, live deal reviews with Walker, deal team introductions, and an active community of serious searchers. Check out acquisitionlab.com, link in the notes, or email the lab's co-founder, Chelsea Wood, chelsea at buythenbuild.com. Jan Vanarsky, welcome to Acquiring Minds.

Thanks, Will. Excited to be here. Jan, you are the first Acquiring Minds guest to also be a sponsor that our fund, Minds Capital, invested in. So it's a personal thrill for me to have you here. I am invested via Minds Capital in your deal.