How We Partner With Entrepreneurs
We arm potential business buyers with industry-leading proprietary systems to quickly canvas the market for opportunities and close deals.
Turn-key Infrastructure for New Operating Partners
We originate thousands of investment targets annually.
Thesis differentiates itself from independent sponsors, self-funded searchers, and traditional acquisition models – we provide a partnership model that enables all acquisition practice types to be successful.
We have interviewed over 200+ business buyers, independent sponsors, and similar investment groups to understand where the lower middle M&A market is headed. Thesis Capital is the product of not only this extensive research but also the product of the successful acquisition, growth, and sale of businesses we have acquired.
Thesis is always seeking to add partners including:
We have interviewed over 200+ business buyers, independent sponsors, and similar investment groups to understand where the lower middle M&A market is headed. Thesis Capital is the product of not only this extensive research but also the product of the successful acquisition, growth, and sale of businesses we have acquired.
Thesis is always seeking to add partners including:
- Independent sponsors
- New business buyers / searchers
- Family offices and private equity groups seeking to materially expand deal-flow
- Strategics seeking end-to-end buy-side acquisition (vs. standing up a dedicated deal team)
Perspectives on Searchers and Independent Sponsors – data from over 200+ interviews:
Self-funded search
Through Thesis, self-funded searchers can expect to see a very high volume of quality deals ideal for self-funded search. We have existing relationships with traditional and SBA 7a lenders to whom we can introduce search partners and help get your deal funded. While the 7a process can be a longer diligence process, we believe this is still an excellent vehicle for closing self-funded transactions. During the diligence process with your lender, our team will also work with and advise you on document preparation. Our focus on self-funded search models is to help maximize economics for fellow searchers in any transaction. For context, we see numerous opportunities suitable for self-funded / 7a approaches between $1m-2.5m EBITDA.
Independent sponsors
We have helped several independent sponsors and executives launch and complete searches through Thesis Capital’s infrastructure. Our network of investment banking relationships and leading intermediaries enable new independent sponsors to tap high quality and larger deals quickly. New independent sponsors often face two challenges: 1) Originating larger, high quality deals in the range of $3-7M EBITDA and 2) Convincing intermediaries you have the network to actually raise the capital. Thesis has helped prior sponsors solve for both items leveraging our network of additional debt and equity providers where needed. For context, we see many opportunities suitable for sponsors between $3m-7m EBITDA.
Traditional search
After our interviews across 200+ searchers (and ongoing interviews of new searchers entering the market), we have determined traditional search is commonly less than optimal for most entrepreneurs. For context, we define traditional search as an entrepreneur with limited capital, typically raising two 'funds': Fund 1 supports the “search” for ~24 months then Fund 2 provides acquisition capital. Our view is that the decision about how search should be less subjective and more mathematical in nature. Our assessment, leading to the conclusion of the non-optimal nature of traditional search revolves around several factors:
- Limited exit economics: most traditional searchers with a very successful acquisition exit with 15-20% (on average) of the equity in companies valued at ~$10M. Comparatively, one could instead choose to buy a smaller firm through self-funded search or much larger independently sponsor sized business and increase their personal returns materially.
- Geographic constraints – Most financial backers, whom support traditional searchers will require the entrepreneur to search for opportunities across all 50 states. The requirement to relocate to potentially anywhere in the US coupled with limited upside increases risk. Thesis was developed to offer partners the ability to run highly targeted searches in specific geographies as they see fit.
- Loss of control – Our research across 200+ prior searchers and similar funds includes stories of traditional searchers / entrepreneurs ousted by their boards over marginal differences in returns and approach.
- Short-sighted – Most traditional sponsors will seek to exit the company via sale within 4-7 years. At Thesis, we promote the idea of permanent equity and long-term holds. Why search for 24-36+ months to find an ideal, lower-middle market company only to sell and have to start over? Why sell a company you have spent years leading, building and becoming an expert in only to sell? While a sale is an opportunity to reclaim cash proceeds, at Thesis, we have aligned alternative approaches with partners to facilitate cash distributions without always requiring a sale.
We pride ourselves on several key resources for our partners:
- Launch a search in 4 weeks.
On average, starting a new search requires ~6-9 months of setup time. Finding a business to buy and running a business are two separate skillsets. An effective search requires a careful review of personal opportunity cost; setting up infrastructure such as email systems and CRMs, and developing base relationships with legal and accounting firms as well as brokers with true depth takes years. By contrast, our infrastructure reduces time to down to less than 4 weeks. Within 1 month, our partners begin seeing high-quality deal-flow tailored specifically to their criteria. - Leading M&A advisory support is part of the partnership.
We are here to help you see the deal through from starting your search to close and beyond. Having run our own companies, we understand the value of a powerful network. Everything we do is in direct partnership, we work with you as a partner to across all aspects of your journey from sourcing to structuring the acquisition, LOI process, diligence, capital, and closing. Our processes are built to help you be successful. - Massively scaled (and tailored) deal origination.
In 2023, we originated over 3,000+ quality deals. This is a result of several years of refining our acquisition origination processes, deep relationships with national intermediaries, and our network of advisors whom have helped us develop innovative origination approaches. By joining Thesis, you gain access to these systems and processes to help you identify and close opportunities quickly. Our network and systems are one of a kind. We are your one-stop shop to scale deal flow across all strategies whether on or off market. - We’re flexible on terms.
Whether you are conducting a solo self-funded search, an independent sponsor search or if you’re a family office or private equity group, our partnership terms are built to suit.
FAQS
How does Thesis Capital’s search infrastructure help me find a business faster?
Thesis’ sourcing / origination infrastructure has enabled our partners partners to reduce >6-9 months from what would be comparable acquisition timelines when searching for a company to acquire independently. Thesis is setup in a way that enables our partners the capabilities to begin seeing quality deals in as little as one month.
Does it cost money to join Thesis?
Investing in, acquiring and running a business necessarily requires risk for reward trade offs. Our partnership is a platform for the material acceleration of acquisition entrepreneurship and related activities.
What is expected of operating partners with Thesis?
Operating partners are involved in all aspects of the acquisition and from Thesis development to operations post close. Where possible we aim to provide maximum operational freedom post close. As your partner we work with you to originate, capitalize, close an ideal business and provide guidance and structure post close to build your platform. Our partnership is hands on through the journey beginning to end.
What are my economics as a Thesis acquiring partner?
Economics are transaction dependent and may vary widely, we align incentives to help you maximize the value you can create. We help entrepreneurs consider both what would be equivalent of 'self-funded search' options as well as independent sponsor models, and understand the tradeoffs associated with economics, control, and nuance of each.
Do operating partners move to a company's location after acqustion?
We take a boots on the ground approach to everything we do but we are a remote first culture. Relocation depends on the specifics of a given transaction and what is best for the company – we are here to help you think through the best approach based on your capabilities and goals.