The Origins and Future of a 9-Figure SMB Holdco

Today's interview is the story of a small business Holdco. The Elmore company's portfolio is nine businesses strong and does around $200 million in annual revenue. And it's run by three partners, two of whom are with us today, Gant, Elmore and Matt Moldenhauer.

We unpack what they're building and, more importantly, how they're building it. A theme threaded throughout the conversation is compounding, hardly a new concept. But many investors and builders talk the compounding talk.

Gantt and Matt walk the walk. Their acquisitions are forever holds. They seek operating partners who view the business as their life's work.

And they've seen time and again in their own portfolio how it's not until years 7 or 12, or even 15 where the magic of compounding happens. From 2 to 100 million took 10 years, says Gantt, and from 100 million to 200 million took a year. Another key theme of what Gant and Matt are building is operations.

Matt spent seven years operating a small business in a hard industry, a business that had just $2 million in revenue when acquired. Listen for how much gratitude he has for the operational chops he earned during that tenure and how he recommends a similar path to you aspiring Holdco builder.

There is so much in today's interview with Gant, Elmore and Matt Moldenhauer enjoy when and how revenue is recognized in a small business is crucial to understand but often overlooked by searchers. Revenue recognition informs how much the business actually earns, how favorable or not the CA conversion cycle is, what the working capital needs look like, and more.

So join Max Lummis and Travis Sadler of LLCs for Tomorrow, Tuesday's webinar on revenue recognition in quality of earnings issues that frequently surface in SMB transactions. LCS performs dozens of Q of Es for searchers and independent sponsors every year, so they are in the very business of scrutinizing the revenue quality and recognition of businesses in our market. For buyers like you.

Sessions with Max and Travis are substantial, sometimes technical, so expect a meaty primer on this most important topic. The webinar is Revenue Recognition and Quality of Revenue in SMB Deals and it is tomorrow, Tuesday, May 19, noon Eastern. Link to register is right at the top of this episode's show notes or on the Acquiring Minds homepage.

Acquiringminds Co. Also tomorrow Tuesday, Team Acquiring Minds is planning to release something that we are really excited about. The ETA Database. The ETA database is a searchable, filterable archive of every Acquiring Minds episode. Over 450 episodes of acquiring Minds cataloged and filterable by industry, acquisition model, geography and more.

So many of you have asked over the years whether there's a way to search the episode back catalog by criteria like industry, deal type and there hasn't been. But starting tomorrow there will be the ETA database. Watch for it tomorrow.

Tuesday, May 19. 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.

The team at Aspen HR recently published a short white paper targeted at searchers Entitled A New CEO's Guide to Human Resources. It lays out the key items you should be thinking about as you transition into CEO and owner of the business you bought.