The Searchers Building a $10m EBITDA Powerhouse

Today's interview is the story of a searcher who launched the first search fund in a small country and over the last six years has built a category leader Nicolás Lulli and his two partners raised capital from US investors to buy a business in Peru.

They found and acquired their target in 2020 during the depths of COVID The business had a million dollars of EBITDA and offered a variety of services including physical document or as the industry calls it, records management. Peru imposed very strict rules during COVID which crushed Nick's business. That million dollars of earnings dropped to zero in his and his partner's first year of…

But not only did they save the business, they've since grown it into a powerhouse in the Andean region where with $10 million of EBITDA and the future looks brighter still. Today Nick lives outside Boston, his base from which he works on the business. But listen for how he worked in the business on the ground in Lima for the first five years.

It was a very difficult and operationally intense half decade of living and breathing the business every day. Many of the standout stories on acquiring minds share this pattern. The entrepreneur works in the business for years, learning operating, becoming an expert, earning the right to only then work on the business.

Recent examples include Jared Pearce who grew his little half a million dollar SDE H Vac business to over 6 million in EBITDA before exiting to private equity for high eight figures. Aiizik Zimmerman has grown his plumbing business Jay Blanton from 6 to 25 million in revenue in three years by embracing founder mode. And of course Steve Carroll who bought a mechanical contractor that he operated…

Today Kelso Industries does over a billion in revenue. Nicolás, Jared, Isaac, Steve, all examples of entrepreneurs who did not shy away from being the operator themselves. Now don't get me wrong, it is important to see a path to working on your business.

You will hit a ceiling if you can't graduate from in to on. But often years of working in the business are required or said better reward it. The credibility, the battle scars, the expertise that you build over years of operations become the foundation from which you eventually grow your business to new heights.

You'll notice that the format of today's interview is a bit different, including the presence of my co host and partner in Mind's Capital, Nicholas James. This is a cross post from the Minds Capital podcast. If you haven't checked out MCP yet, the interviews over there focus on the independent sponsor model of business buying.

We publish weekly interviews with sponsors and other successful players in that ecosystem. Check it out. Minds Capital Podcast okay, here is Nicolás Lulli, launcher of the first search fund in Peru and builder of Poli Sistemas webinars. This coming Tuesday, the team at due diligence firm LCS will teach advanced deal mechanics.

You'll learn where purchase price really moves and why networking capital and net debt are often where buyers unintentionally overpay. You'll hear two case studies, one on accounts payable, the other on project based revenue, and you'll learn about inventory and how to normalize it and how to define debt correctly for your target's valuation.

These are advanced but crucial topics taught by Max Lummis and Travis Sadler of lcs, a team that does dozens of Q of Es for searchers and independent sponsors every year. The webinar is Advanced Deal Mechanics and it is this coming Tuesday, April 28th noon Eastern. Link to register is right at the top of this episode's show notes or on the Acquiring Minds homepage.

Acquiring Minds co. 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.