E:37 Top M&A Entrepreneurs Podcast - Daniel Sweet, Sweetwater Partners - 3 Acquisitions

Daniel Sweet specializes in taking healthy Texas small businesses ranging from $1MM - $20MM in revenue, partnering with a management team and financing partners to build a plan to take the business to the next logical level.  Our specialty industries are Technology-, Energy-, and Construction related businesses headquartered in the Great State of Texas. 

00:00 Intro to Daniel Sweet.   Buy businesses in his / founders background 
01:36 How they, the partners started,  asking the question is there any reason why this M&A could not be done on a smaller scale. 
03:24  1000 different ways to finance the deals - 1st deal used SBA loan.  eLearning Company around $1 million in sales
05:00  How he found the first deal -  his personal warm network
05:42   How he assessed the opportunity - could he grow the eLearning company? 
06:47   What was blocking new sales in the eLearning company - only way he got new customers
07:00  What was multiple that they agreed on - 2 and change.   Nice set up.  
07:45   What salary was owner taking out of business - $100k plus distributions
08:05  How long he stayed on - SBA rules
09:17  How was ownership sliced up - equally?  
10:22 How did the "books" look, how clean/messy - was he lifestyle spreadsheet business - bank statements / tax statements only way to validate?
11:45   Did he see $5mm -$10mm growth opportunity 
12:45    Where are profits going?     When will profits be paid out to the owners?   What has happened since acquisition  - revenue trending at $2mm ++
15:45   Has Daniel found a system or perfect type of Professional Services firm to buy and build?
16:30  what is plan for the eLearning company hold,  grow and sell  - 2nd acquisition - where he found the 2nd acquisition,  how he finds his acquisitions
18:10  His 2nd acquisition - Sherpa Consulting - almost same opportunities as first acquisition - lots of cross selling opportunities  - rev was at $1.3 mm - lots of untapped fruit - customer concentration concerns - combined with eLearning no longer problem - how he financed 2nd acquisition - what he did with the legacy people
22:19  What was important to 2nd acquisition seller - really important
23:33  his 3rd acquisition - Oil Engineering firm Scada Systems - was doing $1.6mm in rev - what is upside potential with this 3rd company  - the Law of Supply and Demand in Oil world
28:00  Was 3rd acquisition profitable,  how old was company - financing deal stack - seller main concern - what was acquisition multiple ?
33:45  What do think growth potential in 3rd acquisition - what is that dependent on?
34:30  Acquisitions now doing $5mm boring business - what is next? 
36:36  What is structure of his acquisition company  - what is vision or annual acquisition goal  rules - goal for 2021  - what for 2022?  
38:26  How are they paying themselves - employee or equity law firm distribution partners - what IRR are they looking for?  - focus is on health of acquisition - low hang fruit - profitable result.
42:11  What a crucible of fire stress test taught him about his partners - risk tolerance - does each partner have equal veto power on deals - Doing B2B deals,  what B2C deals are they looking at?
45:30  What has he learned about himself through the acquisition process? 
46:59 is he working on a fund or partnering with a fund - becoming equity partners - rule- money will never control the company - no 51% funded deals - helping people they turn away.