How to Find/Approach Veteran Owned SMBs

June 20, 2024

by a searcher from United States Air Force Academy in Alpharetta, GA, USA

I am a Veteran (US Air Force) and while I have been in the civilian world for more than 25 years, still lean on my military background when it comes to leadership in my current position. As a Self-Funded searcher, what suggestions do you have to find and approach Veteran Owned SMBs to 1) Learn how they got started and operate their business and 2) Possibly learn if they have any interest in selling to another veteran who will have similar values and leadership styles?

1 Like

32 Replies

191 Views

Replies

Reply by a searcher
from Harvard University in Boston, MA, USA

Late to catch Luke's tag, but better late than never. I acquired an SDVOSB government contractor in the fire, life safety, and security space about 2 and a half years ago via a self-funded / "wife funded" search. I also did an independent research project in grad school specifically on veterans acquiring veteran-designated businesses. Echo many of the comments already made, especially those by Mark, Austin, and Tom. My comments will be focused on designated businesses in govcon, i.e., those that require veteran ownership/leadership and formal certification under 13 CFR Part 128 to confer specific advantages in selling to the U.S. Government. Different from a small business that just happens to have a veteran at the helm, or from businesses leveraging private sector supplier diversity programs such as NaVOBA.

Back when SDVOSB certification was run by CVE, getting an instant export of all ~13,000 active registered SDVOSBs was a piece of cake. Now that the program falls under SBA authority, the public user interface is much less "scrapeable." Even so, give https://veterans.certify.sba.gov/ a look. It still allows you to sort and filter by State and NAICS Code. DSBS as mentioned by Chris could be the next-best alternative now. For finding "regular" companies that happen to be veteran-owned, could try something like https://www.veteranownedbusiness.com/ (claims to have a list of 40k),

Back to the govcon world, additional tools you can use for some early stage research and/or diligence would be USASpending.gov and FPDS.gov to look up prime awards to a particular company as well as the competitive history of a particular opportunity (e.g., what set-aside basis was it solicited under, what was total awarded value, how much additional funding got added / initial funding got de-obligated, how much competition was there for the award, etc.)

I've seen a lot of increased interest in this specific idea over the past few years as searchers continue to niche down and find where they can best differentiate themselves. And I do believe there is a significant "win win" opportunity in terms of valuation given all the tricky complications around ownership, management, and control. It's *tough* for owners to sell these designated businesses, so you as a searcher are potentially offering real value. And the market dynamics support a self-funded searcher acquiring a great company at a really great price due to the ceiling on growth and severely limited buyer pool. But it's not some target-rich Nirvana where there are dozens or hundreds of amazing businesses just waiting for you to be the first veteran searcher to cold call and offer them 3x EBITDA.

Reply by a searcher
from United States Naval Academy in San Diego, CA, USA

As an owner of two small businesses who gets cold called frequently by brokers, I can personally attest to what works and doesn't work from my perspective. Getting a call from a broker's secretary who knows nothing about my business, and offers a "free valuation" is the standard and promptly gets a response of "please put me on your do not call list". Getting a call personally, from a fellow veteran, who knows I"m a veteran, usually earns a few minutes of my time to see if they can add value. How the conversation goes from there dictates whether it becomes a longer conversation or not. Just like when we were in the W-2 world, the point of the interview was to get to the next round, and the next, until you get the job. In search, I think the goal is to earn 2 minutes of their time, then the follow on call/meeting, until you can build enough trust to make a deal happen. That first 10 seconds ia critical, so make it count!

Since this is a vetaran focused thread, adding a shameless pitch for our Veteran ETA Bootcamp Info Session on 6/24 at 5pm PST. Please sign up below!

https://www.searchfunder.com/event/view/1641

+30 more replies.

Join the discussion