Can You Buy 100% of a Business with Other People’s Money?

Top M&A Entrepreneurs

Summary
In this conversation, Jon Stoddard interviews John Panaccione, an Army veteran and entrepreneur who co-founded LogicBay and later launched Folla Capital. They discuss the intricacies of participating preferred equity, the challenges of raising capital for small to medium-sized business acquisitions, and the evolving landscape of SBA loans. John shares insights on structuring deals, investor relations, and the importance of understanding the rules surrounding capital raising. The discussion highlights the opportunities available for buyers looking to acquire businesses without significant upfront capital.
Takeaways
Participating preferred equity provides investors with a preferred position and additional rights.
Crowdfunding emerged as a viable option for raising capital in 2012.
SBA loans can be complemented with seller financing and investor contributions.
Understanding SBA rules is crucial for structuring deals effectively.
Reverse engineering valuations can help buyers negotiate better prices.
Investors need to have a clear understanding of the terms before committing.
Raising capital requires building relationships and trust with potential investors.
The process of acquiring a business can be more straightforward than starting a new venture.
Veterans often face unique challenges in accessing capital for business acquisitions.
Fola Capital offers a structured approach to help buyers navigate the acquisition process.
Chapters
00:00 Introduction to John Panaccione and LogicBay
03:03 Understanding Participating Preferred Equity
06:10 The Transition to Folla Capital
08:52 Raising Capital for SMB Acquisitions
11:51 Navigating SBA Loan Requirements
15:00 Structuring Deals and Reverse Engineering Valuations
17:54 Investor Relations and Terms
21:01 Challenges in Raising Capital
23:54 Opportunities in Business Acquisitions
Keywords
M&A, business acquisition, participating preferred equity, crowdfunding, SBA loans, capital raising, small business, investor relations, Logic Bay, Folla Capital