Still Searching with Jed Morris

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On this episode of Still Searching with Jed Morris, independent sponsor Andrew Engram of Lightning Rod Capital breaks down what it actually takes to buy lower middle market companies when you raise capital deal by deal.Andrew's road runs from walking on to the Texas A&M football team to managing offshore drilling projects in Scotland, Rotterdam, and Korea, to getting laid off in the oil crash and rebuilding through an MBA, a stack of VC rejections, and a co-founded boutique investment bank. Then he left to build his own firm. His first deal as a sponsor was a natural gas measurement company in West Texas. He spent eight months on it, talked to over 400 capital providers, found exactly one family office willing to move, and then watched performance fall off a cliff. He walked away carrying the diligence bill and the lessons.Those lessons are the meat of this one. Do not try to win a banked auction as an independent sponsor. Do not underwrite peak EBITDA and call it normal. Know who runs the company post close before you fall in love with the deal. And remember the line Jed gives every buyer: you have a buy box, but lenders have a lend box.A buyer walks away with: how the independent sponsor model really works, how to pressure test a deal with a personal board of advisors before going to market, and why capital raising is won in person, not over Zoom.Full transcript: https://jedmorris.com/podcast/independent-sponsor-lessons-andrew-engramWatch on YouTube: https://www.youtube.com/watch?v=yQ7giA19G_EConnect with Andrew Engram: https://www.linkedin.com/in/andrewengram19/ Get full access to Still Searching at jedmorris.substack.com/subscribe

On this episode of Still Searching with Jed Morris, Army veteran Renan Cortez explains how he bought an $8 million restoration business with 100% seller financing and zero money down, and what happened when it all came apart two years later.The deal itself is a masterclass. An off-market find, a QoE before terms, and a negotiation at a diner where buyer and seller worked one calculator together until they landed on 7% over 12 years. No bank. No broker. A page and a half with ketchup stains that a lawyer turned into a 74-page APA.Then the part the highlight reels skip. Revenue slid from six million to two, and it was not organic. A $600,000 MCA loan demanded 12 grand a week. Payroll came out of his own pocket until it could not. And at the lowest point of his life, a phone call from an old military buddy arrived at the right moment. Renan handed the business back for a dollar, went back to corporate, and started rebuilding. His verdict is not what you expect: the seller financing is not what failed him. The structure that saved him from the bank also gave the sellers a reason to want the business back.A buyer walks away with: how to negotiate seller terms side by side instead of across the table, why 100% seller financing can tempt a seller to default you, the MCA trap to avoid, and the community rule that saves more than deals.Full transcript: https://jedmorris.com/podcast/8m-seller-financing-renan-cortezWatch on YouTube: https://www.youtube.com/watch?v=29H-f9Yr58I Get full access to Still Searching at jedmorris.substack.com/subscribe

For Halloween, Still Searching with Jed Morris joins Andrew Hoffman of the Search Fund Coalition for Tales from the Search Crypt: six real stories of small business acquisitions that ended in the graveyard.A $20 million healthcare deal that lost most of its EBITDA nine months after close. A 100% seller-financed plumbing buy that turned into a fight over $600,000 in receivables. A star salesman who turned out to be the most toxic person in the building, holding half the revenue hostage. A parts manufacturer that tripled capacity on cheap money right before the market normalized. A searcher so deal fatigued he hoped his own QoE would come back bad. And a seller who built a copycat business across town before the ink dried. Names changed, industries pivoted. The settlements and NDAs are exactly why you never hear these stories.This is not scare content. It is preparation. Do not overlever, because a 1.5 DSCR feels comfortable and is not. Know the incentives of everyone on your deal team. And never close with a seller you do not trust. Jed ends where most people will not go: what insolvency does to the person holding the personal guarantee, and why losing money is not losing everything.A buyer walks away with: the failure patterns that repeat across deals, the leverage and trust rules that keep you out of the graveyard, and the reminder that in year one your only job is to not fail.Full transcript: https://jedmorris.com/podcast/small-business-failure-stories-halloweenWatch on YouTube: https://www.youtube.com/watch?v=DIzF_b7xmGg Get full access to Still Searching at jedmorris.substack.com/subscribe

On this episode of Still Searching with Jed Morris, Marine Corps veteran Michael Johnson breaks down how he bought SpeedPro, a wide-format print and sign shop near Raleigh, with an SBA loan, then bolted on a second shop with 100% seller financing.Michael's path was not a weekend course. It was Fallujah as an infantry NCO, restaurant floors, five years running a metal fab shop, crane and rigging operations, and a stretch as a full-time financial writer. By the time he found SpeedPro on BizBuySell, he knew his numbers cold: two years of expenses banked, not two years of salary, and $50,000 liquid before he let himself look. He wrote a one-page buyer profile, got a banker on the phone, and went from first conversation to a closed deal without a guru in sight.Then the part most first-time buyers never hear. Every employee stayed. Raises and paid holidays on day one. And when the sign shop across the parking lot needed an exit, Michael structured a 100% seller-financed acquisition, a tool that works when you already own the cash flow, not when you are broke.A buyer walks away with: how to size your runway in expenses instead of salary, why a one-page buyer profile opens doors, what day-one retention actually looks like, and when seller financing is a tool instead of a trap.Full transcript: https://jedmorris.com/podcast/sergeant-to-ceo-michael-johnsonWatch on YouTube: https://www.youtube.com/watch?v=k7fg94YqyF8Connect with Michael Johnson: https://www.linkedin.com/in/keeptrading/ Get full access to Still Searching at jedmorris.substack.com/subscribe