Jacob Zax

You can turn $100,000 into a $50 million business through acquisitions. This is closer to capital allocation than traditional entrepreneurship. Here's the deal structure. First, the capital stack. You buy a business the same way you buy a house. Equity in, bank covers the rest. With SBA loans: 90% loan, 10% equity. A million dollar business might require $100K to $200K down. Target companies with $1 to $3 million in earnings. Go to sellers that are NOT at market. Brokered deals are competitive and sellers want cash at close. This only works off-market. Here's what you propose: Seller keeps 20% equity in a new entity. Asset sale, their company moves into newco, they keep running it at fair market salary. You write them a check for 60% via bank loan. Remaining 20% is a seller's note: 10% straight note, 10% performance earnout. From the bank's perspective, you created 40% equity. The truth? It's really only 20%, and it's the seller's. Your money in? Approaching zero. But you own 80% of Enterprise Value. Why would a seller agree? Tell them: my goal is to make your 20% as valuable as the 80% we're giving you today. What are the odds you double the value on your own in 3 to 5 years? Now stack earnings. $2 million average per company. Buy 10 just like this. $20 million combined earnings under one entity. Centralize marketing, accounting, HR, governance at HQ. You bought each at 4 to 4.5x. A $20 million earnings business sells for 7 to 7.5x or more. That's multiple expansion, just by combining them. Close the first one. Negotiate the next $100K for the next business. Then newco sells to PE for 7, 8, 9x your $20 million in earnings. That's the path from $100K to $50 million. If you're considering buying a business in the next 12 to 24 months, we built Acquisition Lab for exactly this. walkerdeibel.com

163

26 Comments

Excited to join Midday Connect tomorrow to talk broadly about how investors actually think when evaluating founders and companies and what we think about Symphonic Capital! If you can't make it, I recently wrote about what we look for specifically—how we back AI companies closing gaps in healthcare, finance, and workforce. Written with stories from four of our portfolio founders. Read "AI as Infrastructure" here: https://lnkd.in/eDNqG7K2

16

1 Comment

Fundraising CEOs: Know your numbers cold. Not just the obvious ones. Know things like underlying growth drivers, cohort-level retention changes, why NRR dipped last month, user behavior patterns and so on. If you don't know your KPIs as CEO, you won't get a second meeting. No exceptions.

22

Bootstrappers hate on VC backed cos because their metrics aren't good enough to raise capital. Be honest. Not hating, I’ve built and exited three bootstrap businesses myself. But the bar to raise now is real. You need ~$1M in revenue to even be in the conversation. Lots of founders start with big visions, fall short of that number, can’t raise… then join team bootstrap and take shots at the VC ecosystem from a distance. It's okay... just be honest... The VC game is the game, and we are honest about the game we are playing. If you're a VC backed founder keep going, you can hit huge outcomes... people prove it is possible every single day. Everyone telling you you're wrong or won't making it is messaging you from venture back apps, on venture backed devices, using venture backed infrastructure.

24

13 Comments

This question doesn’t make sense outside of a social media post. The question is how much is your company worth? Take $125K/that number. There’s your answer. Not as entertaining though. The problem is that valuing a company at that stage is sorcery, not science, so there is no right answer. Any VC that knew how to value companies would be putting up triple digit IRR numbers consistently because they would be the only firm on the planet capable of such magic. The NPV of most startups is exactly $0, so $125K for 8% is probably a lottery ticket. This is in no way a defense of accelerators or a recommendation to join any of them. Thats another post entirely.

22

5 Comments

The acquisition of infrastructure is the acquisition of truth. Not hype. Not branding. Not positioning. Truth. Most founders build stories. Operators build systems. One gets attention. The other gets evidence. Infrastructure is evidence. When you acquire infrastructure, you inherit reality. Cash flow stops being theoretical. Margins stop being projections. Execution stops being motivational. It becomes measurable. And measurement is ruthless. Your systems will expose: • Where money actually leaks • Where talent actually underperforms • Where leadership hesitates • Where your standards are fiction Infrastructure does not care how confident you sound. It cares whether the machine runs. You can polish a pitch deck. You cannot polish downtime. You can engineer perception. You cannot engineer sustained throughput. Sooner or later, operations reveal truth. This is why most people avoid acquiring infrastructure. Because infrastructure removes narrative control. Once you own the system, you cannot blame the market. You cannot blame the team. You cannot blame timing. You designed it. You own it. You face it. That pressure matures you fast. You stop asking, “How do we look?” You start asking, “Does it work?” You stop optimizing for applause. You start optimizing for repeatability. You stop chasing growth hacks. You start fixing bottlenecks. That shift changes your identity. You move from entrepreneur to operator. From visionary to architect. From commentator to builder. Infrastructure forces alignment between belief and behavior. If you say you value excellence, your processes must reflect it. If you say you value speed, your decision cycles must prove it. If you say you value scale, your systems must survive pressure. Otherwise, it’s noise. Here’s the uncomfortable part: Infrastructure exposes your limits. Weak reporting? Weak thinking. Chaotic execution? Chaotic leadership. Inconsistent output? Inconsistent standards. The system is the mirror. But here’s the advantage most miss: Truth compounds. When you operate inside strong infrastructure, feedback loops tighten. Mistakes surface early. Corrections happen faster. Performance becomes predictable. Predictability is leverage. And leverage is power. Acquiring infrastructure is not about status. It’s not about looking sophisticated. It’s about owning the mechanisms that generate undeniable feedback. No system, no signal. No constraint, no clarity. No infrastructure, no truth. If you want to grow, stop obsessing over visibility. Acquire operating capacity. Acquire structural control. Acquire assets that force you to confront reality. Because once you own infrastructure, you lose the ability to hide. And that is exactly why it works. Acquisition of infrastructure is acquisition of truth. Everything else is performance.

4

If you look at the early-stage fundraising funnel, conversion rates are tightening, but the companies that do raise are doing so at higher valuations and with larger checks. The market seems to be betting on fewer winners, but those winners will be bigger. I’m not convinced. I do believe the very biggest winners will be larger than ever as AI expands the reach of technology, largely by replacing labor. But I don’t believe there will be fewer winners overall. Most B2B solutions are moving toward verticalized, specialized use cases that deliver superior value compared to generalized horizontal platforms. That shift should create more winners. While these vertical players may not reach the scale of the horizontal mega-winners, they can still generate the kind of multibillion-dollar outcomes that venture is built to fund.

57

9 Comments