Entrepreneur Gary Shelton explains his seller demographic criteria when sourcing acquisition targets on We Live to Build.
Assertion Not checkable as stated
Shelton Bought $8M Firm With $5K Down, Scaling to $20M
“It was an electrical engineering firm doing eight million a year in electrical engineering contracts with General Motors, Ford and Chrysler. And I bought it with only 5000 of my own money and took it to twenty million in one year.”
Insight
Shelton: Businesses fail to cross $1M without autonomous operational systems
“Most mine-powered businesses that aren't successful, that don't get beyond one million, much coveted one million revenue mark, they're not operating with systems. They're not operating in a way that, hey, if I'm not here, I'm the founder, this is my great idea…”
Disclosure
Shelton targets asset-heavy acquisitions over software for borrowing leverage
“I'm looking for an asset heavy business, a business that has assets that gives me something to leverage, as opposed to, for example, a software business that doesn't have.”
Insight
Shelton: Keeping founders at 20% equity de-risks acquisitions and accelerates learning
“I'll get used, I'll buy 80% of the business, not 100. Used to keep 20. And so, for during this transition period, they're really involved in helping me grow this business. That takes a lot of the risk out for me, and it reduces my learning curve because I'm ri…”
Assertion Not publicly verifiable
Shelton Acquired Telecom Firm for $0 Down, Reaching $70M in Revenue
“We provide a telephone service to the Department of Defense, the White House, and Camp David. Started that deal with no money of my own. I'm really getting more sophisticated at this point. And we did seventy million a year.”
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Shelton: Mentored by Wall Street Pioneer Reginald Lewis
“And then I was mentored by Reginald Lewis.”