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Welcome to Brandt Point!
We started Brandt Point with radical transparency, openly sharing information to build trust and keep all stakeholders updated through a monthly newsletter. Join us on this journey!
TLDR
Intro to the Team and our Goal
Duncan Hutchins and Josh Moore met at the MBA program at the University of Colorado at Boulder, where they pursued careers in venture capital. After growing tired of searching for the next unicorn startup to risk it all, they decided to team up and pursue their entrepreneurship dreams by buying a business instead of starting their own.
Duncan and Josh both come from the startup and tech world, having worked in high-level operations and strategy roles with scaling companies and have also worked on the investments side with M&A and VC roles.
In Entrepreneurship Through Acquisition, the goal is to acquire small businesses that offer substantial growth potential but are below the radar of Private Equity due to their size in terms of EBITDA (generally below $2M EBITDA). Success hinges on identifying a suitable target, fostering its growth of revenues or bottom-line margins, and achieving a profitable exit, all while generating dividends for preferred shareholders.
Here's a great podcast to learn more about buying small businesses.
Shoutouts
First and foremost, we have to highlight our incredible wives who encouraged us to take on this incredible new challenge.
Thank you to the numerous friends, mentors, and advisors who were the early cheerleaders and supporters of our new venture.
Adam Markley (PROX Capital) for his support in sending our first Offer Letter! He was a tremendous help in answering late-night emails, texts, and phone calls and helped us form a compelling offer.
Gautam Pardhy (a fellow searcher) for running through the different ETA acclerator programs and their unique advantages.
Wins & Losses
Wins: Diligence process and tools → Our diligence process is working, and we efficiently evaluate at least 5 potential deals each week.
We have created pipelines, tools, communication templates that are helping us to be efficient in our deal flow.
Those tools include shallow dive financial analysis, deep dive financial analysis, shallow dive business fundamentals, and deep dive diligence checklist.
Losses: We submitted an LOI for a local towing company that did not get accepted, which definitely stung.
We learned a great deal from the first failure. We thought we were well-prepared, but with hindsight we see that there are plenty of additional steps we could have taken to mitigate a Seller's concerns with our ability to close a deal.
We made the necessary changes to our process so that we will not have the same issue for the next deal.
Activity by the Numbers: February
68 = Colorado business brokers contacted
20 = Deals evaluated
2 = Verbal offers and LOIs submitted
Subject Deep Dive: Sourcing
The search for potential acquisitions bifurcates into brokered and proprietary avenues.
Brokered deals, pre-vetted and packaged for sale, offer a streamlined path to the transaction, typically concluding within 90 days but attract considerable competition.
Proprietary searches target unlisted opportunities, demanding more buyer initiative but facing less competition.
Our analysis of over 20 brokered deals reveals lots of variability in broker quality, especially in financial assessments like SDE (Seller Discretionary Earnings / Adjusted EBITDA / the number at which SMB deals trade). Despite this, brokers with International Business Brokers Association certifications generally indicate higher reliability. Navigating the brokers continues to hone. In the lower-middle private markets, the broker functions like an Investment Banker would for the late-stage markets.
For proprietary deals, strategies include leveraging intermediaries (CPAs, attorneys, PE funds) and direct outreach (cold calling, emails, mail). Our targeted approach contains a list of 4,500 potential companies in Colorado. We are also evaluating tools such as Grata, Udu, and Ineven for efficiency. Outsourcing list compilation is also an avenue we are evaluating.
Sourcing is the lifeblood of our organization, and if you have any introductions, referrals, or ideas, we are all ears in terms of new and better ways to connect with owners looking to exit!
Asks from our Community
Interesting industries to dig into and source from.
We are always looking for connections to local brokers, owners, attorneys, CPAs, or wealth managers.
Any feedback on things we are not talking about.
Check out our website! Let us know what you think.
Final Thoughts
Duncan here - scratching the entrepreneurial itch has been a long time coming. I'm excited to have a partner with a shared vision, energy, and complementary skills. We had a few chats during the MBA where we decided that if there were ever an opportunity to partner, we would be a great fit; you can only connect the dots looking backward. (Yikes -- that is indeed a Steve Jobs quote...)
It's also exciting to get back to my small business roots. Growing up, my dad was a serial small business founder. From the sports to education industries, I worked at all five of his companies at some point. Additionally, after undergrad, I worked for a bootstrapped small business under a savvy founder. I experienced growth fr
om 15 to 75+ people and the inevitable challenges that saw our numbers shrink back to 30. Between my SMB roots, investment experience via the MBA and post-MBA, and a strong partnership, this direction for my career was meant to be.
Your support fuels our journey forward, and we are immensely grateful.