How I Leverage 6 Strategies to Acquire a US$1M Venture for US$150.000 & Target 16X Return under 24 Months

Reading Time: Approximately 4 Minutes

Hi, how is your week going?

Today I want to talk about the mystery of buying a business for a 85% discount.

My goal is to inspire you to do one day the same.

If you ever need help, you know where to find me :)

Anyway lets jump in.

A bit of back story, I'm in the process to buy a 4 year old business doing $200.000 in profits annually .

This acquisition will be the 1st of 6 others of a roll-up under a holding company that i plan to leverage as a cash flowing asset or maybe even list

But how do you buy a business worth US$1.000.000 for US$150.000?

𝗧𝗵𝗲 𝗧𝗲𝗿𝗺𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗱𝗲𝗮𝗹 𝗱𝗲𝘁𝗲𝗿𝗺𝗶𝗻𝗲 𝘆𝗼𝘂𝗿 𝗥𝗢𝗜:

Now, how do we buy it for $150.000 while its worth $1.000.000

We are getting creative with financing, assets, negotiations.

• 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 𝗯𝗮𝘀𝗲𝗱 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴

The business has recurring revenue. Voila.

We can finance 60% of the $400.000 recurring revenue. That is $240.000.

I agreed on a $150.000 financing with a debt provider.

• 𝗦𝗲𝗹𝗹𝗲𝗿 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴:

The immediate cash need for the seller was $300.000

I agreed to finance $250.000 of the acquisition.

• 𝗦𝗮𝗹𝗲𝘀 𝗼𝗳 𝗔𝘀𝘀𝗲𝘁𝘀:

The company own 4 cars worth $130.000.

We sell the “old cars” and take out a lease for just 2 new cars.

Good deal right. $130.000 in the pocket.

• 𝗥𝗼𝗹𝗹𝗲𝗱 𝗢𝘃𝗲𝗿 𝗘𝗾𝘂𝗶𝘁𝘆:

The (old) owner loves our future business plans.

so we roll over 17% equity for future owner benefits.

Rolling over equity can be a great method to get paid twice as seller. One is the immediate cash. Two, the buyer will grow the business, so another cash out is on the horizon.

• 𝗢𝗻𝗯𝗼𝗮𝗿𝗱 𝗡𝗲𝘄 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿

We created a 24 month business plan. Went out to Pitch our growth trajectory

and will sell 10% of equity for $150.000 to a new investor.

Not only the value went up, but also we earn along the way

𝗧𝗵𝗲𝗿𝗲 𝘆𝗼𝘂 𝗴𝗼, 𝘆𝗼𝘂 𝗮𝗰𝗾𝘂𝗶𝗿𝗲𝗱 𝗨𝗦$𝟭𝗠 𝗳𝗼𝗿 𝗨𝗦$𝟭𝟱𝟬.𝟬𝟬𝟬,-

If you have any questions about this post, please click here to visit my linkedin post and ask your question.

Talk to you on Thursday -!-

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