Introduction
In this interview, Dan Angel shares how he successfully acquired Lodging Source, a remote travel management business generating approximately $900,000 in Seller’s Discretionary Earnings (SDE). The business specializes in corporate extended stay travel for construction crews and restaurant openings with no contracts but strong client relationships. Dan transitioned from a hedge fund career to business ownership, navigating the complexities of buying a fully remote operation. His journey offers valuable insights for entrepreneurs looking to buy remote travel management business opportunities.
Founder Success Story QnA
But let’s start off Dan with how it was that you came to want to buy a business in the first place.
So I was born in South Africa and moved to the States when I was 18 months old. I moved around a lot growing up but primarily was from the Midwest. I went to Syracuse for undergrad and then my first job out of Syracuse was at Bear Sterns in 2007. Right before Bear Sterns collapsed, so I got a front row seat to the Big Short. Luckily the place where I was at Bear Sterns was one of the few places JP Morgan didn’t have. I spent the next few years getting my CFA and planning to go back to business school which I thought would give me the ability to pivot to work for a hedge fund. I was fortunate enough to get into University of Chicago at Booth. While I was there, I took the search fund class which was taught by Brian Okconor and Mark Agnu. I was blown away—I couldn’t believe that you could just graduate from getting your MBA and go buy a company and become the CEO. I accepted a full-time offer at a hedge fund but six years later, with twins who were two at the time, I started having soul-searching questions about what impact I was making. After a friend’s memorial where his mom told me to ‘thrive,’ I decided I wanted to operate something, build something, and give people jobs. Late summer of 2022 I resigned from the job and decided I was going to go search.
What was it about working in the hedge fund industry that turned you on so much?
When I saw everything collapse when I was at Bear Sterns, I just realized those funds were probably the smartest out there. I was always fascinated by the markets and how they invest. In my mind, it was just the ultimate goal was to go work for one of these hedge funds. That changed once I went to work for one, but that was initially the ultimate goal.
What does your search look like? What are the steps there?
I went down the self-funded model. I spent a lot of time going back and forth like, do I really want to go raise a fund? Do I want to get investors? And it just didn’t make a lot of sense to me. I went to the Southeast ETA conference at Charlottesville which was a game changer—it was like an ‘aha’ moment. I made the decision to go with Sam Rosat’s Pursuant boot camp in Tampa. That was great—I met my entire deal team there. One of the biggest pain points of a self-funded search is it’s really hard to keep yourself accountable. Having that cohort was really a huge help. Also, knowing my banker, knowing my lawyers—all that stuff, having more of a personal relationship was a huge help for me.
What were your parameters for size of business you could buy eBay revenue wise?
I was looking for something—I think at the high point, it probably wouldn’t have been over a million and a half of SDE. But I looked as low as 500,000. I ultimately landed on something around the 900 range. But you know, depending on what I found, I was looking anywhere from 500 to one and a half pretty much.
What does the business do?
Lodging Source is a corporate travel management company. The niche that we focus on is group project and extended stay travel. This isn’t your typical transient suite travel going to conferences. This is a construction company that is going to go install something and they’re based in Atlanta and their job is somewhere across the country and they’re going to spend a month or two months there. The last thing this company wants to do is source hotels and find discounts. So that’s what we do for them. On the restaurant side, we do a lot of new restaurant openings. If a big chain is going to open up new locations across the country, they’re going to send four to five people there to do interviews, hire, and set up the restaurant. And they’re going to be there for a month to two months to set up this restaurant. Our nice thing is we don’t charge our clients anything and we get compensated by the hotels on the back end through commission. It’s a really nice value prop to the customers.
Working capital wise, how does it work from a working capital standpoint?
There’s no inventory. There are receivables—we’re still collecting on these hotels—but for the most part, the hotels pay us within 30 to 60 days of checkout, so that there’s not really an issue there. Our main cost is labor. We were 15 people fully remote across all the time zones, and we’ve grown that to 23 now. From a margin standpoint, it’s anywhere from 30 to 40%. Contrast that to the sign business I looked at previously—where all the cash was getting tied up in accounts receivable and inventory. For the most part, we’re getting 10% off of the gross bookings.
How big is this market? Did you think there was a lot to grow into or was it tapped out?
I tried to find who the competitors were in the space. One of our largest competitors is a company called CLC—they’re probably at least 50 times the size of our company. Outside of them, it’s relatively fragmented. The entire extended stay travel industry is probably $20 billion. The amount that’s outsourced is probably over $5 billion. More and more people don’t want to do it in house anymore—they want to outsource it. Our value prop is incredible—it’s no cost to the customer.
What was the sale price?
A little over four times—so a little over four million for a business that’s doing call it $900,000 in SDE.
What were the terms of the acquisition?
It was about 80% SBA and 10% seller financing and then 10% equity. The seller financing had a 2-year standby and then that turns into a five-year amortization, but actually has a bullet payment at the end of year three. That standby gives me the ability to get a little bit more leverage on the SBA side because not having those debt payments for the first two years helps with debt service coverage ratio.
What should buyers think about when looking at a remote business?
I partially got lucky—I did my due diligence to make sure we had a good culture, but without that culture, a remote business with a new CEO with a small company is really hard to achieve. It’s a high hurdle and it’s hard to diligence culture. Part of me says it’s a little bit of luck—the culture I thought I was buying really was there. I think it’s a hard thing to know for sure. There are advantages to being remote—it’s a hiring advantage now. But if I was doing it all over again, I wouldn’t go after remote business. I just think it’s worked out really well.
Dan Angel Business Stats
Dan Angel acquired Lodging Source, a 20-year-old remote travel management business with impressive financials and growth trajectory. The business specializes in booking extended stay corporate travel for construction crews and restaurant openings with no contracts but strong client retention. Here’s a breakdown of key business metrics that make this a compelling case study for entrepreneurs looking to buy a remote travel management business.
- Annual gross bookings: $30+ million
- Net revenue: $3 million (10% commission from hotels)
- Seller’s Discretionary Earnings (SDE): ~$900,000
- Gross margin: 30-40%
- Team size: Grew from 15 to 23 employees post-acquisition
- Current growth rate: ~40% year-to-date
| Business Metric | Value |
|---|---|
| Purchase Price | $4.1 million (4.0x SDE) |
| Financing Structure | 80% SBA loan, 10% seller financing, 10% equity |
| Business Age | 20 years (founded 2004) |
| Booking Growth (2023) | 30% year-to-date |
| Current Headcount | 23 employees (3 in Philippines) |
Dan Angel Method
Dan Angel’s successful acquisition of Lodging Source followed a systematic approach that balanced thorough due diligence with decisive action. His method provides a blueprint for entrepreneurs considering how to buy a remote travel management business with strong fundamentals. Here’s how he executed his search and acquisition strategy:
- Attended Sam Rosat’s Pursuant boot camp to build his deal team and accountability structure
- Focused on broker-sourced deals (95% of deal flow) while limiting geographic constraints to DMV area initially
- Conducted deep due diligence on working capital dynamics before making offers
- Validated business model by discreetly talking to customers and industry contacts
- Negotiated terms including a 2-year standby period on seller financing to ease debt coverage ratios
- Implemented EOS (Entrepreneurial Operating System) principles post-acquisition for smoother scaling
Dan Angel Tools
Dan Angel leveraged specific tools to streamline his search process and successfully transition into business ownership. The technology stack at Lodging Source evolved significantly post-acquisition to support growth while maintaining the company’s remote-first culture. Here’s how he used key tools to achieve operational excellence:
- Relaunched the internal database system from Lodging Wizard 1.0 to 2.0 to handle increased booking volume
- Implemented EOS (Entrepreneurial Operating System) tools to establish accountability and vision clarity
- Leveraged video conferencing tools for daily check-ins with remote team members across time zones
- Used discreet industry networking to validate business model through former classmates in travel sector
- Created simple tracking systems for team communication to replace previous ad-hoc processes
- Built relationships with SBA lenders early in search to streamline financing process
Key Notes
The acquisition of Lodging Source reveals critical insights for entrepreneurs exploring business ownership. These key notes highlight the most valuable lessons from Dan Angel’s journey to buy a remote travel management business with substantial SDE. Paying attention to these nuances can mean the difference between a smooth transition and costly missteps.
- Working capital dynamics matter more than headline profit numbers—Dan passed on a sign manufacturing business despite higher operating profit due to cash flow issues
- Culture is critical in remote businesses—you can’t diligence this easily but it makes or breaks the transition
- Growth isn’t free—despite increasing bookings by 40%, operating profits initially decreased due to strategic hiring and tech investment
- High leverage creates constraints—90% debt financing means minimal room for reinvestment or unexpected revenue losses
- “Good enough” growth beats no growth—the business had sustainable 15-30% annual growth post-pandemic, signaling healthy fundamentals
- Quality of revenue matters—despite no contracts, decades-long client relationships showed strong business durability
Get Started in Just 5 Steps
Following Dan Angel’s successful acquisition of Lodging Source, here’s how you can start your journey to buy a remote travel management business or similar opportunity. These five actionable steps distill his experience into a practical framework that balances thorough preparation with decisive execution:
- Define your “big three” parameters (industry, geography, size) but constrain at least two to avoid decision paralysis during your search
- Build accountability through cohorts or advisors—self-funded searchers especially need external support to stay on track
- Dig deep into working capital dynamics before making offers—you can’t fix cash flow problems with good intentions
- Validate business model discreetly through industry connections before approaching sellers
- Structure seller financing with a standby period to ease debt service coverage requirements during transition
Conclusion
Dan Angel’s acquisition of Lodging Source demonstrates how thorough preparation, cultural awareness, and strategic patience can lead to successful business ownership. His transition from hedge fund management to running a remote travel management business with $900k SDE offers valuable lessons for anyone looking to buy a business. The key takeaways—focusing on working capital health, understanding remote business culture, and allowing time for thoughtful transition—highlight why some acquisitions thrive while others struggle. For entrepreneurs considering how to buy a remote travel management business, Dan’s experience proves that the right opportunity, approached with diligence and humility, can create meaningful impact while generating strong financial returns.