One Man LBO
@OneManLBO
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Former investment banker | 10Y at value hedge fund | next: self-funded search for SMB (Mountain West). Posts opinions, not advice.
Houston, TX
Joined October 2023
Today marks the end of an era for me, as I exit public market investing after a 10+ year run at my hedge fund. My last day as a W-2 draws to a close. This is it. I'm stepping off "the path", out into the unknown. The professional linearity of the track so many aspire to -- Ivy League degree, investment banking, buy-side stint, single family house in a nice suburb -- is broken. Purposefully. All to take a bet on myself. This moment has been in the making for some time. In my own head, I've lived this reality for so long that now that the moment is actually here, it feels eerily quiet. Almost like a non-event. Not so for some neighbors, friends, and family -- reactions range from positive curiosity to sheer shock. I think life is best lived in seasons or chapters. It was time for a new one. And sometimes, to start a new chapter, it takes a decisive act of violent agency. You quit a great job, you sell a beautiful house, and you move a couple thousand miles. To a lot of people, that doesn't make any sense. But we want this for our family. We want to be out West, and we want to call our own shots, create our own autonomous luck in this life. That's all that matters. It's a simple matter of long-term priorities, with confusing short-term optics for now, and I'm OK with that. I've heard the full range of feedback on Search over the last few years. The hype, the success stories, the horror stories, the "don't do it, no good listings, brokers suck, this is the top" warnings. At the end of the day, I think reality is a spectrum, and the experience needs to be uniquely lived. I need to go out, encounter my own unique truth, take a few (OK, very likely a thousand) punches to the face, and hopefully create the best conditions for luck, to the extent any control can be exerted over this at all. The market is what it is. I need to find my own answer. The worst outcome isn't failing to locate and close on a decent asset. It's the nagging questions at the end of this life. "What could have been, had I seriously tried, gone all out and applied myself to the best of my ability, made the most of my God-given talents?" Only one way to find out. Here we go.
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@SMBJackieHirsch @trentjhughes @CoFoundersNik Ahaha not the same edge but I’ll use this one around my kids
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@therobertbrooks Agree with almost everything, except that I think the customer acquisition cost can be significantly lower than Resi (existing B2B builder relationships vs. paying the digital overlords for clicks)
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@KirkNewcombe That’s awful. Feel sorry for seller. Half recurring maintenance contracts? Wow. Seems like that would be a unicorn find today.
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@BigJohn043 Good point - Resi can be both. On the Commercial side, my impression is it tends to be more binary. Rare to see much of a service element because that tends to be handled in-house for property owners or by one of the bigger PM cos
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Yeah that about sums up my understanding. I'm beginning to think that for 99% of solo searchers looking to go in highly leveraged with 7a, this sector doesn't make sense unless you get one of these at a super low multiple / highly contingent consideration to seller. You're effectively part bank by floating WC for the GC, plus the cyclicality doesn't support high leverage.
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When your day has no easily measurable progress milestones anymore, it’s the little things that make for highlights. Like this broker response
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@markbdelaney @ebitdaddy90 Not at the proprietary stage yet, but what I’ve heard other people do is say “it’s a confidential matter” (and that will really perk up ears)
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@lawyer4SMBs @AdamMarkleySMB @KenWohl Agreed -- having signed a contract with broker = major intent signaling value, and also in most cases crucial to have a middle man greasing the wheels / bringing parties back to the table
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