Winding search ends (almost) where I started

I owe a huge thank you to this community. I started my ETA path about 4 years ago, and finally closed on a 30+ employee business last month. Searchfunder was a big part of my search from the beginning. People sharing stories good and bad on here, over the phone, and in person were a huge part of helping me take the leap so I’m sharing this. I started my self-funded search a little over two years ago and here's my W2-to-searcher-to-entrepreneur-to-acquirer/operator story:

I’m not going to bury the lead: I’m a CPA that bought an accounting business. There’s a part of me that wishes I saw that straight path at the beginning, but what would be the fun in that?

Pre-search / W2

I grew up with parents, grandparents, great-grandparents that owned small businesses. I very much saw first-hand the good and bad of being an owner-operator. The bad made me think I wanted something stable when I started working. To me, that meant accounting at a big company. So I spent 10+ years at PwC and most of that doing M&A due diligence working for private equity clients (cut my teeth doing QofEs). It was great, learned a ton, and met a lot of really smart people. There was always something missing though. Enter ETA. I share this because I didn’t have a perfect background (not PE, not investment banking, not management consulting, not operating a company or a division).

I spent a lot of time thinking about self-funded v. traditional v. accelerator. I can share more, but ultimately, I chose self-funded because of the flexibility and my and my family’s preferences. I talked to 100’s of searchers, operators, and investors along the way. The only consistent takeaway from everyone was that no ETA path is the same. I had to do what made sense for me and for my family.

Someone advised me very early to know EXACTLY why I was doing search. That was undoubtedly the best advice I received from all those conversations. After broken deals or isolating searching days, it was easy to point back to my why. Side note: I was very surprised how willing ppl were to talk to me as a to-be-searcher.

I spent 6 months interning for an accelerator-backed searcher while working full-time. I don’t recommend this for a to-be-searcher, but it helped me get an inside view of the types of deals and processes. For me, there was a huge ‘wheel of fortune’ effect – much easier watching than doing. I saw deals while at PwC and while interning for the searcher and felt like I could very quickly assess pass or pursue. However, when I was searching, deciding pass / pursue was much harder, especially early on even with ‘scorecards’, ‘rubrics’, etc.

Search

I was looking for a ‘typical’ search business with over $750k in EBITDA in 4 MSAs on the east coast. I did both proprietary and brokered outreach and used offshore resources via upwork and fiverr to help with the proprietary side.

For search, I’d recommend:

- Making absolute sure your significant other is 1000% on board with search. It’s a wild, wild ride and completely understand a SO having second thoughts.

- Knowing your size (EBITDA / SDE), type of business, and location (and knowing 2 of the 3 very specifically – I’m ‘leveraging’ this from someone else but it’s very true)

- Persistence – I hit a big wall mentally after 3-4 months when the search honeymoon phase ran out. It was no joke emotionally for me. I highly recommend finding other searchers and staying in very regular contact with them.

- Talking to owners and making offers on good opportunities (I’m ‘leveraging’ this too. Maximizing these two are really all that matter IMO)

- Leaning into what you are (and are not). Searchers, especially self-funded searchers, are not deep-pocketed, deal-doing machines. So don’t pretend to be. You are a real person.

- Recognizing it’s not just the target business that matters. Seller matters nearly as much as the business, especially for self-funded, first timers. You can only know so much pre-close.

- Moving VERY quickly on any decent brokered deal that you come across.

- Not expecting $750k to $2m EBITDA, quality businesses to be laying on the ground. I felt like any company that 1) met most of the textbook search criteria and 2) had $750k+ EBITDA had PE or PE portco interest (PE can pay higher multiples than SBA allows and offers multiple apple bites).

I spent 18 months searching and talked to over 350 owners, made 3 dozen offers / IOIs / LOIs, had 8 ‘agreements in principle’, and ultimately signed 3 LOIs. I then stopped searching due to largely an opportunity I came across and partially from my personal situation.

Entrepreneur

I started my search thinking I would never practice accounting again. I then became very aware of how underserved most small businesses were by their accountants and their own accounting teams (through no fault of their accountant or accounting teams. Many, or maybe all, are just stretched too thin.). I believed then and still do that (financial) numbers should help owners run their business and not be an administrative task. So I just started my own bookkeeping / fractional CFO shop in February of this year focused on small organizations.

I picked up a few dozen clients and hired employees, but I still kept my eye on very specific accounting acquisition opportunities. The whole deal evaluation process was much more efficient because I only had interest in a very specific subset of accounting firms in specific geographies.

Buying a business

I then met an owner of an accounting firm that fit my now hyper-specific criteria at an accounting industry conference in May. Fast forward 3.5 months, and we closed last month on the ‘proprietary’ deal of Bay Business Group.

Our firm does ‘outsourced accounting’; we’re the complete finance and accounting department for our clients. This means doing everything from bookkeeping, payroll, and tax prep to tax strategy and fractional CFO work. It’s been a blur, but I’m very blessed to have joined a great team.

Hopefully, this was helpful to folks. It wasn’t a straight search path for me, but very grateful for all of the help and support I received along the way.