Most of the time it's just not true. But I really believe, you know, Tony is not that involved in the day to day anymore. But the business had only been shrinking slowly despite adding zero new customers for multiple years.
Acquiring Minds
Buying Small to Build for the Long Term ($300k SDE)
Deal story
Brendan Duebner, an army vet and self-funded searcher, bought IT Total Care, a tiny Bay Area MSP with ~$1.15M revenue and ~$300K SDE, via a creative seller-financed stock deal. His vision is deliberately modest—building a 20-40 person 'tribe' he'll run for decades—and the business grew 25% in revenue and ~40% EBITDA in his first nine months.
Deal facts
Industry
IT / Managed Service Provider (MSP)
Business
Managed service provider serving local SMBs
Location
Foster City, California (Bay Area)
Revenue
~$1.15M (down from peak ~$1.4-1.5M)
SDE / EBITDA
~$150K EBITDA / ~$300K SDE
Multiple
~2x SDE / ~4x adjusted EBITDA
Deal size
~$615K (incl. ~$100K assumed lease liabilities; ~$175K cash left in business)
Acquisition model
Self-Funded
Outcome
Closed March 2025; first ~9 months revenue up 25%, EBITDA up ~40%; targeting 25% growth in 2026
People
Will Smithhost
Host of Acquiring Minds podcast
Brendan Duebnerguest
Army vet, self-funded searcher, owner of IT Total Care MSP
Tony Morarosother
Founder/seller of IT Total Care, built it over 20 years
Josh Medowother
Self-funded searcher and former army officer; Brendan interned for him
Topics
Excerpts · 332 segments · ~1:23:40 long
Short excerpts only — hear the full conversation on the publisher's site.
03:42 Background, army, and discovering ETA12:29 Cold calling as a sourcing strategy17:14 Finding and analyzing IT Total Care23:55 Long-termism and tribe philosophy38:37 Working in the business pre-close48:52 Deal structure and seller note55:51 First-year results and EOS1:12:21 MSP strategy: local vs offshore
Like something is going right. And I figured, look, even if, even if me and Tony are just a one for one swap, like, I think even though I know nothing about the IT industry, I think I can add enough value where this will makes sense and I'll just, I'll learn as I go.
By the way, another nice little detail here is that he had a vacation home in Tahoe. Always a good proxy for quality of business is looking at the owner, the life, the, the lifestyle that the business has afforded the owner. And so if he's living in the Bay Area, first of all, if you're, you know, making a living in the Bay Area at all, you're ahead of the pack.
But then if you also have a house in Tahoe, he's done well by this, this, by this business. It's a, says something at least, of course. So I also think now, Brendan, is a good time to introduce your kind of philosophical approach to building this business.
And, and you know, here I am kind of picking it apart. It's, it's, it's a good analysis to do on recurring revenue and margins and so on. Of course you have to do that.
But it's also, I don't like to forget that your own motivations as an entrepreneur are as important as anything else. And so what you want to build here and in the time over which you want to do it, I also think factors into your decision to buy such a small business. So please, what's the big picture?
Yeah, you know, I think when I started searching, I was kind of like everybody else. You know, originally it was 750,000 to 3 million of EBITDA, blah, blah, blah, blah, blah. And actually that made me miss a couple of good opportunities like abhi, Abhi Ravi Shankar, the with the pools, et cetera business.
Like, yeah, we are. I, I, I got that sim from a broker, like when it was coming to market and I passed on because I was like, oh, it's just too small, you know, and, and Abby and I are friends now and, and I'm like, oh man, I should have bought your business. I love it. But you know, like with this kind of reset again in early 2024, ISH was part of that process was thinking they're like, what am…
And really I knew that, you know, I wasn't trying to do kind of like a private equity thing. This was not a buy and flip situation. Like I'm, I'm an operator, I am not a finance guy.
And so I guess I reestablished that the best case scenario is if I could buy something that I could grow for my entire career for the next 30 years and something where I could have control and I would have the ability to dial up and dial down as I chose to in life when I have kids, maybe dial down and then as they get older, dial up or whatever, just have that flexibility.
And I kind of realized through my search that there was more and more of an opportunity in the smaller businesses that were being overlooked by most searchers and by private equity and all those things. And especially when I was digging into it, Total Care, I just realized, yes, the numbers are small and it's going to take years of compounding to make this really interesting, but that's okay. But…
You know, I'm not trying to become a billionaire or anything. Like, I just want to, I want to have a good life. I want to have flexibility.
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