Kumo

Share this post

Take Five #028: How one entrepreneur put in $50K, kept 85% ownership, and got a $5M loan for a $12M business

kumo.substack.com

Discover more from Kumo

120k+ deals sourced from thousands of brokers and marketplaces. Over $26B in listings. We monitor the publicly listed deal market for you. Try us for free at withkumo.com
Continue reading
Sign in

Take Five #028: How one entrepreneur put in $50K, kept 85% ownership, and got a $5M loan for a $12M business

Five takeaways we loved at Kumo this week

KUMO | withkumo.com
Oct 10, 2022
Share this post

Take Five #028: How one entrepreneur put in $50K, kept 85% ownership, and got a $5M loan for a $12M business

kumo.substack.com
Share

Subscribe to Take Five to get our top 5 quick weekly reads on the world of SMB, M&A, and EtA from the team at Kumo. Kumo aggregates hundreds of thousands of deals into one easy-to-use platform so that you can spend less time sourcing, and more time closing deals.

Before we jump into our Take Five: our beta for Kumo is LIVE! Try it for free now:

What is Kumo?

Kumo is a powerful deal aggregator to help supercharge your deal sourcing.

What can you do with Kumo?

  1. Browse 100,000+ deals from hundreds of brokers and every major marketplace, with 700+ unique deals added daily.

  2. Save time and stop reviewing duplicate deals. Kumo matches identical deals across hundreds of sources so you can view unique business opportunities, even if they’re slightly different across different websites.

  3. Get a daily or weekly summary of deals that match your search criteria

Try Kumo for FREE now


Take Five #028: How one entrepreneur put in $50K, kept 85% ownership, and got a $5M loan for a $12M business

1. Do you have to sign a personal guarantee in order to get SBA 7(a) financing for your SMB?

Twitter avatar for @saoliver1051
Scott Oliver @saoliver1051
Do you have to sign a personal guaranty in order to get SBA 7(a) financing for your SMB? Strap in... 🧵is easy to follow, but you could knit a sweater.
6:43 PM ∙ Oct 4, 2022
48Likes3Retweets

2. Reflections after 1 year+ of searching and finally closing a deal

UK searcher Ayo Disu recently completed his first acquisition and published his top takeaways from the process:

A deal is a series of individual variables that must come together.

I’m sure this is common knowledge now, but the funny thing t advice, is the best advice usually gets repeated. The number of things that must come together to get a deal done is incredible (Sourcing, timing, diligence, geography, price, relationship management, financing, customer concentration, planning, and organization.)
A key trait for when you are in the thick of it is speed, adaptability, and flexibility. The amount of people who have lost deals because of analysis paralysis (aka fear) is significant. Trust your work and yourself.

I remember being in Sainsbury on Sunday and talking over some terms we had just received from the seller.., my business partner the legal team and I had an extensive chat to sort this. We got back to the seller on the same day.

My significant other was not best pleased when I didn’t come back with the groceries as I was completely side-tracked.

From “Reflections after 1 year+ of searching and finally closing a deal” on Searchfunder


3. You need a data room. Here’s how to build one:

Twitter avatar for @chrisxmunn
Chris Munn @chrisxmunn
I've completed over $100M+ in buy side transactions. You should never buy, sell or invest in a business, without a quality data room. Here's how to build a world class data room for your next deal:
1:30 PM ∙ Oct 4, 2022
281Likes36Retweets

4. Save time, make money, make operations safer: how one former searcher is transforming his new acquisition

Jordan Novgrod’s is still doing a great job documenting his first few months of business transition, post-acquisition. Here’s a moment of innovation which brought processing time down from 10 minutes per item to 30 seconds, showcasing how a fresh set of eyes can transform operations:

One of the things I had hoped to bring to the company I bought was innovation. That word gets thrown around a lot, and can mean different things to different folks. To me, it means applying new ways to get work done more efficiently.

For one of the products we make in quantity, we cut up a product call coco mat. It is coconut shell shreds that are glued together. While measuring the time and money it took to make this product, I realized that not only was the process of cutting and trimming the coco mat inefficient, it was somewhat dangerous.

I challenged the guys to think of another way, while I investigated several methods myself, and could not find a tool made that would do what I wanted. One of the guys decided to make a tool. It was essentially a large sharpened pipe. This tool was tested in a hydraulic press, and worked beautifully. It required 800 lbs of force to cut through the coco mat. While this worked, it was still really slow and required pre-cutting the coco mat to fit into the hydraulic press.

While discussing a better solution, we talked about using more leverage, thus getting fingers away from the cutting action. This led to the realization that we had an arbor press that had a four-foot handle. The guys further modified the tool to allow it to clamp to the arbor press. This enabled cutting of the coco mat without pre-cutting, pre-marking, etc. Further, because this method allowed for safely cutting really close to the other circles, it allows us to cut more circles out of each sheet.

This innovation took processing time from over 10 minutes per coco mat plug to less than 30 seconds. Since we make hundreds of these a year, it was a huge win. This win not only saves us time, thus making more money, but also makes the operation safer. Additionally, it helped me gain respect with my team, not for solving this problem, but for empowering them to solve it.

From “Innovation…” by Jordan Novgrod


5. How one entrepreneur put in $50K, kept 85% ownership, and got a $5M loan for a $12M purchase price business

Twitter avatar for @Robert_E_Graham
Robert Graham @Robert_E_Graham
ETA to the moon 🚀 Earlier this year we helped an entrepreneur close what is said to be the largest deal financed with SBA debt that the largest SBA lender (@LiveOakBank) has ever done since its founding. Here’s what that looked like:
1:17 PM ∙ Oct 6, 2022
47Likes3Retweets

Loved what you read? Subscribe to Take Five to get our top quick reads every week from the team at Kumo. Kumo aggregates thousands of sources into one easy-to-use platform so that you can spend less time sourcing, and more time closing deals.

Share this post

Take Five #028: How one entrepreneur put in $50K, kept 85% ownership, and got a $5M loan for a $12M business

kumo.substack.com
Share
Comments
Top
New

No posts

Ready for more?

© 2023 KUMO | withkumo.com
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing