Thread by @DruRly

A thread:

💰 Trends #0012 — Micro Private Equity

trends.vc/trends-0012-mi…

1. 🔍 Problem

Founders want to cash out.

2. 💡 Solution

Micro Private Equity buys businesses valued at or under $5 million.

These are not sexy, venture scale startups. Some are technology-focused. But they tend to be simple, cash flow positive companies with stable growth.

3. 🏁 Micro Private Equity Funds

🔘 Mudbrick Captial (@MudbrickCap | @MikeBoyd)
🔘 Tera Holdings (@SavneetS)
🔘 Little Engine Ventures (@LEV_Capital)
🔘 Owl Mountain
🔘 101 Commerce (@101Commerce)

4. 🏁 Micro Private Equity Funds (con't)

🔘 Chenmark Capital
🔘 Site Arrow (@site_arrow)
🔘 Dura Software (@dura_software)
🔘 Fork Equity (@forkequity)
🔘 Traction Capital

5. 🏁 Companies

⚪ 6Connex (@6Connex)
⚪ Bulk Buy Hosting (@BulkBuyHosting)
⚪ Fomo (@usefomo)
⚪ LaunchCDN (@LaunchCDN)
⚪ DomainNameSanity

6. 🏁 Companies (con't)

⚪ Moki (@MokiMDM)
⚪ Lobiloo (@LobilooDesign)
⚪ Nordic IT
⚪ Cross Sell
⚪ New Day Craft (@NewDayCraft)

7. 🏁 Marketplaces

⚫ Quiet Light Brokerage (@quietlightinc)
⚫ FE International (@FEIntl)
⚫ BizBuySell (@BizBuySell)
⚫ MicroAcquire (@microacquire)
⚫ Empire Flippers (@EmpireFlippers)

8. 🏁 Marketplaces (con't)

⚫ Exchange Marketplace (@exchangeshopify)
⚫ Flippa (@Flippa)
⚫ For Sale By Maker (@mubashariqbal)
⚫ Human Proof Designs (@Human_Proof)
⚫ IndieMaker (@indiemakerco)

9. 🔮 Predictions

✨ Deals will close faster and transaction costs will drop.

Services such as Stripe, Google Analytics, Square and Shopify help buyers verify earnings and growth.

10. 🔮 Predictions (con't)

✨ Non-accredited investors will be able to easily invest in micro PE funds.

Look at these platforms:

· Otis (@withotis)
· Fundrise (@fundrise)
· MicroVentures (@microventures)
· Republic (@joinrepublic)

startups.com/library/expert…

11. ☁️ Opportunities

🔵 Build a playbook to boost returns

· Raise revenue with price increases, conversion rate optimization, affiliate commission negotiation
· Lower costs with a remote team, automation, tax credits

boastcapital.com/sred/

12. ☁️ Opportunities (con't)

🔵 Attract investment opportunities with content and events.

Examples:

· First Round Review (@firstround)
· Jeff Morris Jr. (@jmj)
· a16z (@a16z)
· Founder Summit (@FounderSummit)
· SaaStr (@saastr)

13. ☁️ Opportunities (con't)

🔵 Make offers on abandoned projects found on

· Chrome Web Store
· Shopify App Store
· Product Hunt

Which projects haven't been updated?

14. ☁️ Opportunities (con't)

🔵 Build a playbook around similar assets.

· Plugins: Figma, Webflow, Slack, Trello, Shopify, WordPress and Chrome
· Templates: WordPress, Ghost, Webflow, Carrd and Bubble
· Content: eBooks, courses, newsletters and affiliate sites

15. ☁️ Opportunities (con't)

🔵 Buy businesses with similar customers, cross-sell and lower customer acquisition costs.

16. ☁️ Opportunities (con't)

🔵 Invest across platforms and verticals.

· Amazon recently slashed affiliate commissions
· Coronavirus took out travel-related businesses

You live on the edge by concentrating on one platform or vertical.

druriley.com/platform-risk/

17. ☁️ Opportunities (con't)

🔵 Niche horizontally. Focus on a business characteristic instead of a vertical. Consider B2B SaaS, B2C SaaS or digital assets.

investopedia.com/terms/v/vertic…

18. ☁️ Opportunities (con't)

🔵 Start low and stair step up in deal size.

Sure… Small deals have relatively high transaction costs. But fuck ups carry less risk at this level. Move up to bigger acquisitions as you learn.

investopedia.com/terms/t/transa…

19. 😠 Haters

“You didn’t include Tiny.”

Andrew distinguished between Tiny and PE on The Acquirer’s Podcast with @Greenbackd. I won’t contradict that.

20. 😠 Haters (con't)

“You didn’t include SureSwitft Captial.”

Kevin said that he doesn’t like the term on The Effective Founder with @andybaldacci. Refer to Tiny. 👆

stitcher.com/podcast/andy-b…

21. 😠 Haters (con't)

“Sometimes Micro PE buys majority stakes. Not whole companies.”

Nuance. That’s the purpose of this section.

22. 😠 Haters (con't)

"Is this investment advice?"

No.

23. 🔗 Links

Vroom Vroom Vroom & Mudbrick Capital

Mike Boyd (@MikeBoyd) is a great storyteller. Find out how he got started and why he loves digital assets. Interview w/ @aebridgeman

listennotes.com/podcasts/think…

24. 🔗 Links (con't)

Buying cash-flowing internet companies, starting job boards and building no code projects

This was Andrew's first podcast interview in a while. Find out why he's bullish on no-code (#0006) and podcast memberships (#0002).

listennotes.com/da/podcasts/my…

25. 🔗 Links (con't)

Billionaire Stephen Schwarzman on Private Equity, His Life and Blackstone

Stephen shares childhood stories and how he built Blackstone.

26. 🔗 Links (con't)

Q&A with Andrew Wilkinson, Co-founder of Tiny

Andrew Wilkinson (@awilkinson) came back for an AMA. He fills in the gaps that weren't covered in the interview.

listennotes.com/da/podcasts/my…

27. 🔗 Links (con't)

The Snag of Selling to Private Equity

Find out how Sherry Deutschmann (@sherrystewartd) built a $40 million dollar company and why she insisted on profit-sharing. Interview w/ @JohnWarrillow

builttosell.com/podcast/the-sn…

28. 🔗 Links (con't)

Trends #0005 — Bootstrap Funds

Micro PE and Bootstrap Funds have similar investment criteria.

Bootstrap Funds invest earlier, founders sell minority stakes and stay onboard.

trends.vc/trends-0005-bo…

29. 🔗 Links (con't)

The Berkshire of Software

This is a wide-ranging interview. Savneet (@SavneetS) and Patrick (@patrick_oshag) cover Spanish real estate, software sales, gold, crypto and a lot more.

listennotes.com/podcasts/inves…

30. 🔗 Links (con't)

How a Passion for Craft Spirits Turned into a Six-Figures-a-Month Subscription Box Startup

Mack McConnell (@MACKATTAQ) shares how he built Taster's Club and why he sold to SureSwift Capital.

sureswiftcapital.com/blog/subscript…

If you're interested in trends such as

🍳 Cloud Kitchens
🎙️ Podcast Memberships
🏠 Co-Living
💸 ISAs
🥾 Bootstrap Funds
🧱 No-Code
🏋️ Remote Fitness
🌐 Virtual Meetups
🦄 Startup Studios
💌 Paid Newsletters
💰 Micro Private Equity

Check out ⬇️

trends.vc