Masters in Small Business M&A

Today’s guest is John Hill, Managing Partner of Hyde Park Capital, a boutique investment bank he co-founded in 2000. Hyde Park focuses on raising capital and selling American lower middle market businesses with $5M to $50M in EBITDA. The firm has specialized bankers within the Healthcare, Technology, Industrials, Business & Financial Services, Consumer, and most recently, Digital Infrastructure verticals. John and Peter discuss what has changed and what has remained the same over more than three decades of lower middle market investment banking. John unpacks how and why private equity has become a dominant exit option for smaller businesses, the extinction of the sub-$100M IPO, why M&A transactions take longer today than decades ago, and how AI will reshape deal execution. They also cover the growing specialization of investment banks, the challenges of building and managing an advisory firm, and the complexities of evaluating an increasingly diverse universe of buyers. Discussion Points: John's early career at Morgan Stanley and building Raymond James' technology division Founding Hyde Park Capital in 2000, just before the dot-com bubble burst Navigating the early 2000s downturn and diversifying Hyde Park Capital's industry focus The challenges of managing an investment bank built around transaction-based revenue Culture, client relationships, and the importance of emotional intelligence The rise of private equity as an alternative to smaller public offerings Why M&A transactions take longer to close despite advances in technology The growing role of due diligence and quality of earnings reports How AI could improve efficiency across the M&A process The evolving skill sets of junior and senior investment bankers The shift toward greater industry specialization among M&A advisors Balancing specialized expertise with broader buyer relationships Evaluating buyer credibility, financing capabilities, and certainty of closing Masters in Small Business M&A is produced by its host, Peter Lehrman, and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test. If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market investment banking league-table rankings, the SMB M&A pipeline report, and other useful information. If you’re a business owner, professional acquirer, or M&A advisor, you can start using Axial for free at Axial.com. Resources John Hill | LinkedIn Hyde Park Capital | Website Peter Lehrman | LinkedIn...

Today's guests are Alex de Pfyffer and Ross Porter, Co-Founders of Heritage Holding, an investment firm that has completed nearly 50 acquisitions across 12 active platform companies. After graduating from HBS, where they met as classmates and intramural soccer teammates, Alex and Ross partnered up to pursue a self-funded search. They share what gave them the confidence to move forward on their first acquisition, a business many PE investors passed on due to customer concentration and key-person risk. Alex and Ross explain how an unexpected second acquisition emerged that set them on the path from self-funded search to an independent sponsor and, eventually, to raising a $220M committed fund focused on acquiring and scaling sub-$10M EBITDA businesses. The conversation also covers sourcing, founder partnerships, building acquisition platforms, and advice for the next generation of HBS searchers. Discussion Points: Why they chose a self-funded search over a traditional search fund Ross's path from Stanford engineering and a hearing-aid startup into search Alex's investment banking background and what drew him to small business acquisitions Underwriting customer concentration risk: how they structured their first acquisition Why earning founder trust starts long before the LOI The shift from mass email campaigns to a relationship-driven sourcing strategy Building acquisition platforms through industry-focused buy-and-build strategies Why their earliest investors continued backing each new platform The decision to raise a $220 million committed fund in 2024 Staying disciplined on deal size: why they target businesses averaging $2 million of EBITDA Why "scaling quickly" appears on Heritage Holding's homepage, and where they deliberately move slowly Returning to HBS to share their deal story and share advice for future searchers Why the firm is named "Heritage Holding," not "Heritage Holdings" Masters in Small Business M&A is produced by its host Peter Lehrman and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test. If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market investment banking league-table rankings, the SMB M&A pipeline report, and other useful information. If you’re a business owner, professional acquirer, or M&A advisor, you can start using Axial for free at Axial.com. Resources Alex de Pfyffer LinkedIn Ross Porter LinkedIn Heritage Holding Website

Today’s guest is Grant Hensel, founder of Entrepreneurial Capital, a fund that partners with self-funded searchers acquiring small businesses through ETA. After building and exiting businesses of his own, making personal ETA investments, and completing an acquisition with his wife, Grant launched Entrepreneurial Capital to back the next generation of owner-operators. In this episode, Grant explains why he prefers the self-funded search model over traditional search funds, how he evaluates both businesses and searchers, and the investment philosophy behind backing a "trustworthy searcher buying an enduring business." The conversation also covers the evolution of the ETA ecosystem, lessons from underwriting dozens of acquisitions, and the growing role of SBA lending and policy in financing small business acquisitions. Discussion Points: Why Grant is drawn to self-funded search over the traditional search fund model Entrepreneurial Capital’s thesis: a trustworthy searcher buying an enduring business Raising a $12.8 million debut fund backed by 80 LPs Key underwriting risks: customer concentration, economic resilience, and capital efficiency Evaluating searcher trustworthiness using the Speed of Trust framework Why the self-funded search community is a surprisingly small, interconnected world Sourcing talent versus sourcing deals, and the This Week in ETA newsletter Managing a deal with multiple interested searchers and involving the seller in the selection SBA loan basics and its role in financing ETA acquisitions Recent tightening of SBA underwriting standards and citizenship eligibility The SBA E-Tran issue impacting repeat investors in small business acquisitions How Grant thinks about portfolio construction, defaults, and downside risk Distinguishing operational challenges from seller fraud Potential effects of raising the SBA 7(a) loan cap Perspectives on personal guarantees and required equity injections Why Grant favors conservative leverage in SBA-backed acquisitions Outlook on future fund size and the evolving ETA equity capital landscape Masters in Small Business M&A is produced by its host Peter Lehrman and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test. If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market investment banking league-table rankings, the SMB M&A pipeline report, and other useful information. If you’re a business owner, professional acquirer, or M&A adviso...

Today's guest is Lane Carrick, founder of Optima Mergers & Acquisitions, a boutique lower middle market investment bank he launched in 2024. Lane brings a “renaissance man” profile and personal story to the M&A advisory seat: he grew up in the Holiday Inn franchise business his father built, completed a leveraged buyout in his 20s without knowing it, founded and exited a wealth management firm, cofounded B.B. King's Blues Club, and now teaches M&A and alternative investments at SMU as an adjunct professor. He’s also a published author. Lane and Peter discuss the founder's exit journey through a business sale. Drawing on his experience as both an entrepreneur and advisor, Lane explains why some owners begin thinking about an exit only after a triggering event, why he often feels like an emergency room physician for founders, and how emotions are usually what put deals at risk. The conversation also covers private equity's complicated reputation among business owners, the importance of buyer chemistry, how sellers begin to second-guess a transaction as it approaches the finish line, and what to do about it. Discussion Points: Lane Carrick’s entrepreneurial upbringing and early business influences Lessons learned from his father’s successful Holiday Inn exit Building and exiting his own wealth management business Why owners often decide to sell only after a triggering life event The difference between planned exits and emergency-room transactions Challenges of unsolicited acquisition offers from private equity firms The risks of negotiating with a single buyer versus running a competitive process Communication breakdowns between founders and institutional buyers The importance of specialized M&A legal counsel Setting valuation expectations before going to market Recognizing self-sabotaging behavior during the sale process Common misconceptions about private equity buyers Evaluating execution risk across private equity, search funds, and strategic buyers The importance of chemistry, trust, and cultural fit between buyers and sellers Building buyer relationships versus focusing on founder relationships How his new book helps owners assess sellability, optimization, and exit readiness Planning for identity and purpose after the sale of a business Masters in Small Business M&A is produced by its host Peter Lehrman and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test. If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market investment banking league-table ran...

Matt Plooster returns to the podcast to deliver a timely update on private credit and specifically its deployment in the lower middle market. Despite lingering gaps in awareness and education among business owners and professional advisors, the overall picture is bullish on private credit’s continued growth and deployment. The bearish private credit headlines in the WSJ and Bloomberg aren’t representative of lower middle market activity. AI and private credit in software have undergone a full re-rating. Software no longer gets its own software-centric ARR oriented underwriting framework. It’s back to cash flow and EBITDA. Matt and Peter examine how non-dilutive capital is being used to solve shareholder liquidity issues, fund growth, and support acquisition strategies for Main Street businesses. They also cover the current bifurcation in the private credit market, why software underwriting has shifted materially in the AI era, and why industrial and infrastructure-related sectors continue attracting significant private credit dollars. The conversation closes with a broader discussion that is closer to home for Matt regarding AI’s impact on the investment banking industry, the deal process, and how it’s impacting investment banking hiring and diligence processes. Again, listeners will hear some surprising answers that fly in the face of the mainstream media’s generally gloomy AI narrative. Discussion Points: The continued education gap around private credit in the lower middle market How private credit helps solve shareholder liquidity and succession issues Why today’s LMM credit environment is more borrower-friendly than headlines suggest The role of non-dilutive capital in growth and acquisition financing How software underwriting standards have shifted in the AI era The growing importance of defensible EBITDA and cash flow generation Why industrials, infrastructure, and data center-related sectors remain attractive Strategic buyers versus private equity buyers in today’s M&A market The impact of AI on investment banking workflows and diligence How AI is reshaping analyst hiring and talent evaluation The future of white-collar work and AI adoption inside professional services firms Why clean financial data is becoming even more important in transactions How younger professionals are approaching careers with greater intentionality and purpose Masters in Small Business M&A (sign up for podcast drops here) is produced by its host Peter Lehrman and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test. If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market inv...