How Yuen Yung Built Halbar Partners into a $270M Business Acquisition Company

Introduction

Discover the remarkable business acquisition strategy of Yuen Yung, founder partner at Halbar Partners, who has successfully purchased 15 companies worth $270 million in just 24 months. In this exclusive interview, Yuen shares his journey from immigrant roots to becoming a leader in entrepreneurship through acquisition, revealing the strategies, challenges, and insights that have powered his unprecedented success in the business acquisition world.

Founder Success Story QnA

Could you please tell me those early days of your life?

Yeah, you know, it’s it’s funny because um my first recollection was probably uh four about four, three or four years old. Uh my family had immigrated from uh China to uh New York. So that was where we landed and we were in Manhattan, Chinatown. The early recollections was how bad the living conditions were. even as a three four year old um you you knew you were really poor and you knew that uh things were not not in order and growing up I was actually very scared of of uh Chinatown Manhattan. Um and the reason why is because there was gangs, right? We were just north of uh Little Italy and there was gangs. I I remember vividly when people at the at the front door would stop my dad and try to shake him down for money and how hard my parents had to work and uh they were both doing uh two jobs each and my great-grandmother was actually the one who was watching me uh cuz I was uh the only child at that time and it was one of those where it was like life was was tough. life was very very tough. And by the time I was six or seven, my father finally said, “Okay, this is kind of a dead end. We need to get out of here.” And uh he moved us to Houston, Texas of all places. Uh the, you know, the idea of getting away was nice. Uh but the shock of leaving the culture and the people, uh was very challenging. Uh there was not a lot of Asian people in in Houston at that time. It’s changed a lot now, but at that time there was very few. And so the integration was very challenging. So as a I remember as a uh first grader uh going into school uh I you know first day of school I started crying literally just started sobbing in my seat cuz I didn’t know what was going on. I you know uh the education program wasn’t quite there to get me to where I needed to be. Uh I was just lost. And so they actually ended up holding me back for the first year of first grade and uh I had to repeat first grade and it was probably the best thing that ever happened to me. It was the best thing that ever happened to me. Uh and we can maybe talk about this a little further, but failure sometimes is where you learn the most. And uh it was embarrassing as a little kid to have to repeat first grade, seeing uh your friends now go on to second grade and you’re still lining up in first grade. Uh that feeling was very very interesting and I would say that that’s where a lot of my entrepreneurial drive and motivation comes from.

How do you analyze or what were you thinking of to remember and what was the lesson as a kid?

You you you you still are aware of your ego, right? And and when you think about your friends that you made in first grade, but then now they’re all in second grade and they used to line us up in grades, right? So, you could see where everybody was and there there’s all your friends over in the second grade the following year and here I am still stuck back in the first grade line. Uh and I tried to hide. I I I was I was embarrassed, right? Uh because I had failed. I had failed first grade. But what it did was it it lit a fire under me. Um and what it did for me was that uh the that year of repeating first grade, uh I was top of the class. I I mean I was just like I’m never going to go through that feeling again. And it was that that drove me to just try to excel academically all the time because never in my life did I want to have that that feeling of embarrassment of not being able to to move on.

How was life from there? Your parents started a restaurant business?

They my dad actually when he moved to Houston he started working in a restaurant. Uh and what’s interesting is uh I guess history repeats itself but he started working for this restaurant and he was hard worker was was smart uh even though he didn’t have the education background but he was a good he was a good person smart hardworking and the owner really took a liking to him and a few years later the owner who was aging actually asked to sell it to him and that’s how we ended up owning the restaurant. So when you think about it, that’s exactly what I do today, right? With the ETA program, entrepreneur, entrepreneurship through acquisition. I find aging founders uh who need an exit and I find the younger entrepreneur to come in and take over.

There has been many opportunities in between this from the restaurant to what you do today. One of them being the Shark Tank story. Could you maybe shortly talk about this?

Well, you know, it’s interesting. Shark Tank is a is an amazing show. It’s a reality TV show that uh has uh businesses that pitch to the sharks and decide if the sharks then the sharks decide whether or not they’re going to invest in that business. And um we were already a few years into our business uh when they found us uh and asked us to join the show. And uh when we did the show, it was one of those things where a lot of times people don’t realize that TV is its own business and and it has its own agenda. And so we knew that one of the one of the things that they always wanted was to try to get contestants to cry or show, you know, serious emotion because it made for good TV. Uh and so my brother and I decided, you know, when we go on the show, we want to make sure we don’t get embarrassed in any form or fashion. And so we we we made sure we knew what we were talking about. Uh we knew our business very well. uh our business was growing, things were happening, and so we wanted to get on to the show as a way to show that, hey, things are things are okay, and you can’t take advantage of me as a shark, right? Uh, and the thing that a lot of people don’t realize is that you’re in front of the sharks for over an hour usually, but what they show on TV is probably about 6 to 8 minutes of the actual hour, hour and a half. We were in front of the sharks for total a total of about 90 minutes total. Our episode, if you ever watch it, is only 8 minutes long. So there was, you know, 81 minutes, 82 minutes that you never saw what happened during that time period. So it was an interesting experience. It really was.

And those who haven’t seen the episode yet, what was the business and how did it go? The pitch and everything.

Yeah. At that time, that was my second startup. And it was a fast casual sushi concept that my brother and I started called How Do You Roll? And if you think about like a Chipotle or a Subway, uh it was like that but with sushi rolls. And we felt like that sushi could go into the fast casual space in in some form or fashion. And and my brother being a sushi chef, we really could figure out that back end of it. And so that was the business that we were in. And we went in there and originally behind the scenes we were going to ask for $3 million from the Sharks. And the producers actually told us, “No, no, no, no. You can’t do that. You can’t do that.” And we’re like, “Why? That I mean, this is a real business. We we we we want this much money to grow.” And they said, “Well, because they’ve never done a deal that big.” And so, even if it is a good deal, they’re all going to go out. They’re all just going to say, “Well, I’m not giving you $3 million. I don’t know you that well.” And there will be no show. So, I said, “Okay, well, what’s the what’s the largest deal that’s ever been done on on your show?” And at that time, this was season 4. At that time, the largest deal that was ever done was about $750,000 between a couple of sharks. They had to combine assets and money to to do the deal. And they’re like, “That was the biggest we did.” And and that was not from one shark. That was from two, right? And I said, “Okay, well, if that is the case, I’m going to ask for a million dollars. Just a nice round number.” And they’re like, “Oo, they’ve never done a deal that big.” Okay, we’re gonna see how this goes. And so that’s what we did. We we we went on the show and and right off the bat, we were asking for a million dollars. And you could see the faces of the sharks, all of them going, “Whoa, the these guys are asking for big money cuz most people are asking for 50,000, h 100,000, 250,000.” And here you have these these two two two Asian brothers go on the show and they’re asking for a million dollars, right? And so that was what made it interesting. Uh, and what happened was the four of the five sharks went out right away. And so I thought, “Oh, we messed up, right? We went too big and and no one’s going to do the deal.” However, uh, Mr. Wonderful saw it as an opportunity to go big, right? And he goes, “No, I’ll give you a million dollars.” Right? And all the other sharks just went nuts, right? They were like, “Oh my god, someone’s going to do a million-dollar deal here.” And so that’s kind of what put us on the map. And it ended up being I think even to this day, it’s still one of the bigger deals that has ever been done.

To sum up the story, what happened after the show? Did you sell the business?

Well, so so what happens is after the show uh you you end up having to do a real negotiation, right? Because it’s it’s a real purchase of equity coming into the show. And so we did we did all the work around that. uh it didn’t end up working out on the back end. Uh so we didn’t end up doing the the million uh with Mr. Wonderful. Uh however, we did find other investors in in line because they they saw the show and they they started uh they they were interested. Now we had a exclusivity period, so we couldn’t talk to them right away, but after that period, we were allowed to talk to them and and we found more investors uh that way. Um but what happened was the after being on the show the exposure that we got really grew the business dramatically and really really fast. Uh to the point where in my opinion it got a little bit out of control. It it became too hard to manage the growth. Uh so right after the the show aired all of a sudden we got thousands of leads all around the world of people wanting to be franchises with us. uh we ended up picking up like 20 30 of them uh to open 200 stores all around the world. Uh that growth was very hard to manage and in the end we end up just selling the company to to a private equity. And so one of the lessons learned and if you’ve read my book you you you’ll hear me talk about how you can grow yourself to death uh because you’re not prepared for that growth. And so that was one of the big lessons learned uh from from that business, which was probably one of the most high-profile businesses I’ve ever done.

Do you regret selling the business?

No, no, no, I don’t. I don’t. Uh one one of the things that that uh I’m very big on is that you you can’t live life with regret. And it’s also very important never to fall in love with your business. Uh it’s important to fall in love with your family, your kids, your wife, your parents, your siblings, your extended family. That’s where your love should go. Uh a business is a business and a business is designed to help you create, you know, enterprise, value, money, uh wealth, and uh it’s there to help you do that so that you can then have love in your life, which is all your family and the people that you care about around you. Uh I have seen way too many times as a entrepreneur myself. I’ve seen way too many times where somebody falls in love with their business more than their family. And that’s where you see a lot of divorces. That’s why entrepreneurs oftentimes end up in in divorce. Um they end up falling too heavy into that business. And so yeah, if it’s time to sell, it’s just time to sell. And and you have to be okay with that. You can’t you can’t hang on uh because it’s only detrimental at that point. And so uh my philosophy is no just go build another business. It’s okay.

What is the thesis for investors and what is the core thesis behind Halbar ETA?

Yeah great question. So, so the opportunity came about a few years back and one of the things that we we started researching, you know, I have a masters in entrepreneurship. Uh my business partner Nate uh has an MBA from Yale. And one of the things we noticed was that this search fund space is what it was called. Uh the uh MBA programs now are calling it ETA, which stands for entrepreneurship through acquisition. Uh but the search fund space itself has actually been around since like the mid80s. So it’s been around for a very very very long time. But what we couldn’t understand was when you looked at the numbers and Stanford does a research on this every every other year. When you look at the numbers, it’s the highest performing sector in private equity if it was an actual sector. And so what that told us was that hey there are some real gains uh some real returns by having this model of the search fund model where you found a a highly motivated entrepreneur and then tell them to go find a company that fits a certain criteria and then have them have some equity in that uh deal. they become the CEO, they run the company, they grow the company. And when you look at the numbers at at the exits, uh it’s averaging over 35% irr over the last three decades. So, we’re sitting there scratching our head like, okay, if that’s the case, why is it that there are no institutional investors in this sector? If it’s the highest performing, why why you would think the people with the most money would have figured out, okay, we need to be in here, right? But yet, they keep throwing money into venture. They keep throwing money into private equity, but nobody into the search fund space. And so, as we started researching this a while back, what we started realizing is that institutions have a hard time getting into this space. And for probably good reason and that reason, there’s probably several reasons. Number one is they when they look at the search fund space, the challenge for them is that there is a J curve in terms of the returns for the search space. And what I mean by that is this. You find the entrepreneur and then you go to that entrepreneur. You say, “Okay, I’ll pay you a salary or a stipen or whatever for up to two years and I’ll give you two years to go find that company.” Well, that’s a sunk cost, right? And so when you think about it from institutions perspective, they’ll say, “Okay, well that doesn’t make any sense for us because what happens is I’ve got to spend money and hope that in two years or less they find the right company and then we got to put more money in and grow this thing.” And so that it’s just not a space that they’re interested in. The other thing that I think uh bars them from coming into this particular sector is the fact that when you look at institutions, they they’re not designed or equipped to figure out who the good entrepreneurs are and who the bad ones are, right? That’s not their their job. That they don’t they just invest with things that are already doing well or or or could do well. And so trying to figure out, you know, these millions of searchers that are out there today who want to be entrepreneurs, who are out there searching for companies, that’s a lot of people to sift through and especially when you don’t know what characteristics you’re looking for, right? And trying to figure that out. And then finally, I think that the last barrier to entry for institutions in the space is very simply the fact that they have to do a lot of deals in order to get the diversity uh and and the volume that they need, right? So, uh you know, they they you know, if if they’re eating salad and it’s light and it’s small, they have to eat a lot of salad to get full, right? And so, when you think about this space, uh these deals are small. these aren’t big big uh uh you know uh preIPO type deals and so they have a hard time trying to do you know three million $5 million into a deal that that that’s just not their space and so having said all that Nate and I sat around and said okay well how do we solve this problem this is a problem great sector we already knew that demographically the baby boom generation has created a lot of enterprises a lot of businesses and they’re all aging now, right? And so now we’re like looking at the demographics going, well, these people have no way of transitioning, right? They have no way of exiting out of their business even though the businesses are good, right? Even though they’re good businesses that they’ve built because there’s a mismatch in capital, people, and and and enterprise, right, through through that there’s no market for it. And so we we sought out to figure out how to solve that problem, right? How do we get institutional capital to come into this space and set up a way to find the best entrepreneurs that we can and find to then go find the aging founders that are out there? And we decided, look, we’re we’re going to do it. There’s so much to tackle there that we decided that we are only going to go and bring on mid-career entrepreneurs, right? So, not going to do the the the new MBA uh student that just graduated. Uh the risk profile is a little bit higher. Not that they couldn’t do well, but the risk profile is hard higher. And so, we decided to go after mid-career MBA folks. The other thing we decided to do was go after businesses that have an aging founder that’s already profitable, meaning no startups, no distress, no turnarounds. We’re focused on companies that are already making a million to$10 million profitability today. Uh not revenue but ibida right actual income. And so uh by doing that what we’ve done is we basically have found companies where we can buy from an aging founder. Our average purchase uh from a founder their age is 72. So that tells you it’s it’s up there. The average Ibida profitability that we are buying at is a roughly around three million and we’re buy roughly buying it at 5x. And so you can see that on on average it’s about $15 million for us to buy a company. All right. Now once that happens then the the the the new younger entrepreneur comes in becomes CEO and they have a five you know five-year growth plan and we expect them to grow that company uh to at those levels so that we have an exit uh you know somewhere down the road.

Your co-founder Nate Vassan, how did you meet and how did you know he’s the right person?

Yeah. So, I’ve I’ve been in a lot of different partnerships in my life, right? Uh from uh outside partners to my brother being a partner, right? Uh, so I’ve gone through kind of that iteration of partnerships and and and here’s what I’ll tell you about partnerships. They’re great when they work well. They’re horrible when they don’t. Um, it’s kind of like marriage in in some ways. You got to be very very careful and selective about who your partner is going to be. Uh, because you’re you’re trying to build something longterm together, right? Uh and if you don’t have the same value systems, um the same philosophies um and the same vision of where you want to go, that partnership will probably not work out, right? Uh what I found is over time is my best partnerships have been people that I have known who have the same value system as I do. They see the world in the same way and they want to do business in the same way. uh and they care about people in the same way that I do. Uh and through that value system is what makes the partnership uh sustain and do well. So having said that, that’s so Nate and I were friends first, right? We knew each other through the family office circles um and we talked, you know, and shared ideas. Uh we were friends and and and anytime somebody had a problem, we would bring it to each other and and we would banter about it. And that’s really what created the the relationship first. Uh then the opportunity came secondary, right? Uh and so, you know, that that’s kind of how that whole process worked out. And so we were friends for for many many years. Uh we we shared ideas and we knew kind of each other. We knew we were both family man, family men, you know, uh our families were important to us. Our kids were important to us. Our wives were important to us. Um, we talked a lot about uh business and how we thought about business and how we we we treat people in in the world of business and the and and quite honestly the problems that business itself has especially when it comes to money. Um, and so that was very important. Uh, and so so that’s kind of where we started and then this opportunity came around. He was really you know architecting and studying it. uh trying to figure out okay where the opportunity is what the problem was to solve and then I joined him you know about two years after he was studying it uh I joined him to form Halbar to to start doing it right and start putting it together.

What about the personality types and skill sets that complement each other?

What’s funny is in in in partnerships the personalities don’t have to be similar they actually can be different uh sometimes you don’t want it to be too similar. Uh and so he he you know for example he is much more analytical than I am. He he is much more uh the person that gets gets into the details and loves the strategies and and and the design. I’m much more big big vision you know typical entrepreneur big vision strategist. Uh not that I couldn’t get into details but that’s really not my comfort level right and so we actually are different in terms of personality. Uh but we’re not different in terms of value system and that’s the key, right? Uh and and in business you you know that right away because you know and maybe not always right away but but you you start discovering uh somebody’s really true value system when you have problems and when you’re dealing with problems not when things are good but when things are not good. And so, you know, we’ve had some challenges. You growing a company is always always challenging, but you know, when when given the choice to do the right thing, do they take it? And and and that’s what’s been proven uh in terms of our value system, right? Uh there’s been times where it’s like, well, you know, legally it doesn’t say we have to do it that way, but our value system says no, we we we we need to take care of our our investor uh investors. And even though we don’t have to share, we’re going to share anyway. And that’s the type of thing that you you start realizing that you’re working with the right person.

What about the structure and the initial capital before the first deal?

Yeah. So so uh it’s a LLC, Delaware LLC, which is very common. Um the company structure is just Nate and I, we’re just 50/50. Uh so we’re both uh uh members of the LLC. Uh and then what we did was in order to get things going is not only did we put our own uh equity, sweat equity, everything in um we also brought on a few kind of friends and family uh to start building out uh you know what we call cogp uh partnerships uh where there uh he had some relationships, I had some relationships and we brought on some folks that you know we we like and trust and uh they were the part of the initial capital to get Halbar moving.

How long was the period from setting it all up until the first deal?

The first deal was done in 2021 uh and that deal was done through our partnership with uh uh the incubator uh or accelerator however you want to look at it uh NCA so our partnership with NCA is really kind of what got us moving in terms of the deal flow. Um, and so in 2021, the first few deals were done, uh, all the way up until recently. And so, uh, when you think about, uh, you when you talk about the partnerships, right? So, there’s the partnership between Nate and I as as Halbar, but then Hallbar has partnerships with incubators like NCA, right? uh you know good relationships with uh Christian Malik who has built NCA and really looking at their deal flow and being a part of their deal flow right um and investing in the overall um so those are those are the the I think the um uh the first kind of deals that we did.

What is the NCA and how does the partnership work?

That’s a great question so so the way we do it is uh Halbar is really on the capital side and so what we do is we look at the whole ecosystem of search and we decide where do we want to place the dollars that that that we put together uh our first partnership was literally with NCA and that’s still our our most important partnership. Um and there NCA what they’ve done is they’ve built an an incubator where they recruit, mentor and grow entrepreneurs and then when you look at their deal flow and everything it fits into our investment thesis as well. HBAR is really designed to be the capital provider, right? So when I went back and you know I was mentioning the some of the things that we were trying to solve, right? So that institutions can come in. Halbar is where institutions can come in and invest because the J curve is really then absorbed by NCA, right? Because they’re the ones recruiting, mentoring, and growing and helping those searchers find deals. Halbar’s uh money is really coming in at the moment of acquisition. Right? So now our institutional partners are really coming in uh at the moment of acquisition. So they skip the J curve piece of it. Right? Now they don’t get the economics of that. That goes back to the accelerator, right? Which is profitable by itself. Um but what you basically done is you split the farmers from the from the investors, right? Um, and so that’s really that’s really uh how the system is set up so that institutions can come into this space. Um, but you want you want partnerships like NCA and you want uh hopefully others, right? Because there’s a little bit of competition there, but you really want NCA to do well because that’s where the farming happens, right? Um, so we can only invest as fast as they can bring on searchers, right? And so that’s very important partnership.

Why did you decide to go this route instead of looking for managers and deals yourself?

Ah great great question. So when you look at the ecosystem you really want the efficiency that that an NCA brings right. Um it’s important that you have a place where uh they can do it in what I would call more volume right if I had to do it at Halbar then I would have to to take away resources from the fund right to then invest in that piece of it and then the question is how much time and energy do I have to put in to then create the deal flow right by doing partnerships what happens is and we partner not just with NCA but we partner with other folks as as well. Uh NCAA happens to be our biggest uh partnership. Uh but when you look at the overall we have to be able to um get access to the searchers uh through a a multitude of of of ways, right? Because the way I would the way I would describe this is think about it this way. Um if I am if I’m trying to produce coconut water, right? Well, if I’m the only one growing the coconuts, harvesting the coconuts, producing the water, it’s very slow, right? But what if I had other people that were growing coconuts and I buy the coconuts from them, right? That fits within the quality of coconuts that I want, right? And that’s why the partnership is is so important. Otherwise, we wouldn’t be able to grow this sector fast enough.

How do you know before the first deal that the managers are good and the deals are quality?

That’s a great question, right? So So we have to track it. We have to track it. Uh and so far we’ve done 20some deals uh in partnership with NCA. Uh but we’ve only had one exit so far. So so the the question of are the coconuts good is still debated so far. Uh now we we we obviously see the growth of IBIDA and and and how these CEO searchers are are running the companies and and they’re successful. So we know that that they’re going to do well. So we know that the coconuts are going to be good. But initially, you’re right. I just no idea, right? we’re just taking a chance uh that this whole investment thesis works. Now, after a few years, we can start seeing the momentum and we start seeing the quality of uh searchers that NCA puts together. We see the quality of deals that they put together and keep in mind that we’re involved in that process as well. Uh we’re on the uh investment committee, so we we kind of know what what is to come, right? Um but the day in day out NCA does really the the work of of of working with the the searchers. Um Halbar really is really focused on raising the capital to be ready for the acquisitions because the acquisitions are coming right. So we’ve done 22 deals. We’ve got you know four to six searchers now in LOI ready to go buy those deals. Uh Halbar needs to make sure that the capital is ready to help with that.

What is your biggest headache or what keeps you up at night?

It it’s all of the above. Um I you know it’s being in in the investment world, in the private equity world, the biggest challenge is matching the timing of capital with deal flow, right? Sometimes the the the timing is off and and trying to match that timing is by far what keeps me up at night, right? So sometimes the deal flow isn’t there, but then the money is sitting there and you’re trying to like, oh my god, what am I going to do? I don’t have anywhere to go with the money. And other times it’s like, oh my god, I have all these great deals. I don’t have enough capital to match that. And what what keeps me awake at night is matching those two so that it’s a seamless flow, right? to make sure that um when the moment of acquisition happens, there’s capital ready to go uh but not have capital sit too long where there’s no acquisitions happening, right? Because that doesn’t work either and money goes stale, right? So, so it’s a combination of both of those things and and and make making sure the continuum is smooth.

You’re doing quite a lot of deals in Europe as well. Can you elaborate on that?

Yeah. So about 50% of our deals are in Europe. Uh and the other 50% are in North America. Um and part of that is because NCA started in in Switzerland. So so their incubator started in Switzerland. So their first initial deals were all in Europe and then they expanded to uh to North America. Uh and now they have an office in New York as well. And so uh as we progress, we are actually going to split those two uh market regions up. So first time when you’re doing it, you don’t have enough volume. So you you put it all together, right? So uh as we’re starting to move forward, we’re going to start now creating a fund specifically for North America and then a fund specifically for Europe. And then in in in in the expansion of that potentially it could be Australia, Asia, South America, I mean other possibilities at that point.

How many of the first five deals were in Europe versus the US?

Uh if you look at the actual numbers, it’s it’s about uh almost 50/50. Uh so you look at the deal flows that we’ve done out of the 22 I think 10 were North American and maybe 12 were were uh in Europe. Uh but then if you look at the pipeline I think the next four deals are all in North America. So so you start balancing it back the other way and the first few deals I think I asked it before but the funding was friends and family right? So the first few deal first few deals that were funded was really uh friends and family family offices that came together and funded the deal through syndication co-invest is the best way to describe it.

What is the selling point of taking capital from US to Europe? Don’t they have questions about deal flow in the US?

I think if you look at the market size North America will end up being the bigger market for sure right uh everything from the amount of uh searcher entrepreneurs that you can find MBAs uh the North American market is going to be bigger. Uh but our origin started in Europe and so so because of that right that partnership started in Europe and so we want to make sure that we still continuously do those deals. Now, as far as market cap and size, I think you’re right. I think North America is going to end up being 70, 80. I I don’t know the exact number, but I think over time, you’re going to find that there’s more searchers and more deal flow on the North American side than on the European side.

Could we talk about the structure of the deals? Do you acquire 100% of the business?

So in general when you think about the structure the acquisition itself right so you have the total purchase price and in general you’re going to have the uh aging founder take a small sliver of that as a continuation uh meaning that they have to maybe owner finance it or whatever it is so uh for example if you take a $15 million deal the existing uh uh the the seller uh the the aging founder will probably take a million $2 million of that 15, right, as a payout or something to for the transition. The remaining amount, the $13 million or whatever it might be is typically then split between debt and equity. So the debt side is going to come from traditional bank, private credit fund, something like that. The equity side is where we have been coming together as a syndication right to take that to take that capital stack. Now keep in mind that on the equity side we have to share some of that with the searcher right and NCA as a partner right so about 20% of the equity side automatically is given to the searcher and NCA and then the rest dollar-wise comes in from you know Halbar other family offices co-investment what whatever it might be and that’s really how the deals have been structured and put together.

What about the exit strategy when it comes to investors?

Yeah, that that so here’s the thing, right? We’ve only had one exit. So we’re still new in the game of exit. Uh however, what we’re seeing is that there is a pretty good demand uh of people wanting to buy our companies after about a five-year growth period where you’re going to have uh maybe a little bit larger private equity firm want the deal. Sometimes there’s a family office that wants an operating company. Uh and then sometimes there are strategic partners that might want the the the company. And those are going to be your most typical exits, I think. uh in in these this kind of portfolio. Now on occasion there might be something where you go IPO or or something like that. But in general I think the opportunity for exit is going to come from uh an independent sponsor that might want that size of a company uh a small midsize private equity firm or a family office that wants an operating or a strategic partner that that wants to own it. So, so that you have about four or five different avenues of the exit itself.

When it comes to growing those businesses post acquisition, do you have a standard playbook?

Yes. So when you so there I wouldn’t say there’s a standard playbook because each of the searchers as entrepreneurs have to figure out where the growth is going to come from. However, we do find that there are some commonalities and some opportunities that are what I would call a little bit lowhanging fruit that’s easy to implement. So when you think about a company that is uh owned by an aging founder that has had it for 20 30 years, right? Long period of time, there tends to be um opportunities for us to institutionalize or bring in in uh ideas around sales and marketing, right? Step number one to grow to grow the overall revenue and then uh hopefully IBIDA. And the reason why is because when you when you think about a company that’s been around for a while, they tend to grow more organically. They don’t formalize the sales and marketing piece of it. So, we look for opportunities there. The second opportunity that’s somewhat common uh often in a a company that’s been around and and and has an aging founder is that they don’t invest enough in the technology stack. Uh whereas the newer uh entrepreneur coming in will focus on more efficiency with technology stack. And by doing that, then a lot of times you can reduce cost or find ways to maximize revenue, right? Um, and then finally, I think also a a a very important component of what we always do as part of our playbook is really around governance. So, when you have a 72-year-old that’s looking to sell a company, they they’ve been used to being king or queen of their company. They they they call the shots, they do whatever they want. Uh, it doesn’t work that way in our system where the CEO comes in. Yes, they’re CEO and they have a lot of latitude to to execute their business plan, but we do put a board around them. So, it’s very important to have a formalized governance uh to make sure there’s there’s some checks and balances uh with the entrepreneur. And I think that those are some common uh playbook strategies that we have. I don’t want to go into any more than that because then it starts going into deal bydeal in terms of where we see the opportunity. Uh but in general uh there is a little bit of a playbook that allows us to know that if we buy it from this uh aging entrepreneur and put in a new entrepreneur we can do those things and and just right there will give us some growth.

Do those companies have any synergies since this is quite a large portfolio?

Uh you know I I I don’t I haven’t seen where we have been trying to merge two companies that we’ve bought or anything like that. Uh if you look at our portfolio, we do lean a little bit heavy on industrial and manufacturing. Uh and uh so a good chunk of the portfolio is there. Uh and that and that some of that could be just because uh you know we have searchers that are you know mechanical engineers, electrical engineers uh and then guess what the the people who own those types of companies tend to be uh older right from the baby boom generation. uh you you typically don’t find necessarily as much in the AI space or something like that where you’re finding an aging aging you know seller. Uh you can but just not not as common. So so when you look at the overall I think we lean a little bit heavy there. Um we don’t really do rollups right that’s not in really part of our strategy. I know that a lot of folks like the kind of bluecollar rollups and you know those sorts of things. uh we really are looking to buy a company and figure out how to grow ibida in a in a systematic way so that we can then have a proper exit right for that company.

How much competition is there on deals?

Yes. Yes. Uh you know it’s interesting you know the good ones you you have to fight for a little bit but what we tend to do is we tend uh to do a lot more outreach. Uh so we would we would prefer if possible to find a deal before it even goes out to market, right? Uh because once it goes out to market then everybody’s looking at it. Independent sponsors, searchers, uh family offices, uh individual entrepreneurs, they all start looking at at the same stuff. Um not that we haven’t found deals there because we do have relationships with I bankers and different folks. uh but uh just as just as important is really the avenue around just reaching out. You know, our searchers are typically 10 plus years in their industry. So, so they kind of know the players a little bit and so they know who to go reach out to, who to cold call, uh and who to work their relationship with, right? And that’s why it takes time. Uh so it’s not your standard like, oh, this person’s already looking to sell. oftentimes we’ll reach out and we just have you know we have to meet them have lunch with the the owner and just say hey are you thinking about exiting um and and working those relationships so that you know over time they’re comfortable with the exit.

You’re in a great position seeing both North America and Europe. How similar or different are they?

Um there’s similarities and there differences. Uh you know when you look at the deals that are in Europe when we do due diligence we have to be more careful around regulations uh especially if there is uh conversations about reduction in workforce right uh the rules there uh vary from country to country uh and we have to be much more attentive to it. If you try to, you know, uh, lay off somebody in Germany, it’s a one, two-year process. It’s not like here in the US where you give them two weeks notice, uh, and and you you give them a small package and they’re gone. So, those are types of things that you have to worry about from region to region. I think the also the difference is is that what we see is that the company’s uh uh maturity tends to be older in Europe than in the US and north in in North America, Canada. Um so uh you know it just depends on where the industry is now. It’s hard to quantify it completely at 22 deals because when you look at North America on the 10 deals, they’re spread all over the place, right? So I I don’t know if there’s any geographic uh um differences within North America. Uh but between North America and Europe, yeah, you can start seeing some some differences. We do find that, you know, from a characteristic standpoint that in in Europe, uh the owners that are selling uh you it takes a little more convincing. They they they are more uh ingrained into their business than uh in North America where uh it’s a little bit more transactional. it seems.

How do you personally with Nate manage it all with such a huge portfolio?

It takes a tribe. It takes a whole village. It’s not It’s not just Nate and I, right? Uh on the NCA side, they have uh you know, 30 30 something uh people working there. Uh when you look at the uh investment committees, uh and we do a lot of investment committee meetings because they’re really part of due diligence. It’s not just a yes or no answer. Um, you know, Nate sits on that. Uh, uh, one of our co-GP sits on that. The it takes it takes people, right? It takes people to to go through those deals, work with the searcher to make sure that the deal fits and and it’s what we want. Um, the nice the nice thing is having the partnership with NCA is they do a lot of the heavy lifting there. They really do. Uh, and they do a great job at it. Uh, so so they help that entrepreneur get through uh, whether or not a deal should be acquired or not. And so, uh, but not easy by any stretch of the imagination. By the time somebody puts an LOI in and by the time we actually make a purchase, it could be like three months, but it could also be 10 months, right? Uh, so it’s it’s really unknown in terms of how long it takes to to close a deal. And you can imagine for the searcher, you know, it’s frustrating sometimes because, you know, they’ll go through a deal four months later and it the deal dies. They got to start the whole process over again. Uh, and so we have to manage those types of things.

Could you share a specific example of post-acquisition success or challenges?

Well, you know, I think I think where we’ve had some challenges was the earlier acquisitions um where we were trying to figure out what type of entrepreneur we should put in, right? and and so there there there was an instance where we had to um remove a CEO, a searcher, right, and and put in new leadership there. Um and and it’s not anybody’s fault. It’s just expectations, right? Uh and I think it’s taken us some time to hone into our model. And so I always tell people on searchers when people are applying for our search program with NCA and they want to apply and I’m passing the name over to them. Um I tell them we’re not really looking for that, you know, uh you know, brilliant, you know, wild wild west cowboy that wants to be an entrepreneur. That’s not really our our profile. uh we’re looking for mid-career folks that are, you know, there to own something that they can tweak and and and and grow uh from from their expertise. And so I think we’ve we’ve had to learn that over time. Um I I think initially it was like, okay, we can take anybody on. Anybody wants to be an entrepreneur, let’s go, right? Uh but I think that they’re much more selective today. And so when you look at a program like NCA, I mean, they get thousands of applications a year and they only bring on 10 or 10 or 15 of these folks, right? So the landscape is very competitive, right? Very very competitive uh to get into our program. Now, anybody can be a searcher, right? Anybody that that’s gone through NBA school that wants to be an entrepreneur, they can be a searcher. It’s just not folks that we would we would want to do, right? And going back to my coconut analogy, we want to control the farms and and what those coconut uh you know results are. Uh we can’t just take wild coconuts anywhere and throw them into our our pool.

What key attributes do you look for in people you choose to invest in?

Um so when when people go through the program um there’s everything from personality profiling to experience analysis to uh you know do making them do case studies team you know team team work uh just to see how they are and what we found is there has to be a certain amount of um uh certain characteristics. So so number one is they have to have a certain amount of grit. Uh and what I mean by that is they have to be kind of tough. Uh because the search process is not easy, right? It it it takes a lot of focus. There’s a lot of nos, right? It’s almost like a sales position where you have to get beat up a a lot by people telling you no, no, no, or or you do so much work on a on a deal and then it doesn’t work out. So that’s I think that’s important, right? Then you really have the the skill set of leadership and vision, right? Because as a CEO, you have to have vision. You have to have the ability to say, “Okay, this company has been operating at this level for, you know, uh, 20 years. Uh, what am I going to do in 5 years that’ll really distinguish, you know, the growth and and and what happens?” And so, you really need to make sure that you have searchers that have a vision of how that growth is going to happen, uh, and and and can see that opportunity, right? So, I think that th those are some key things. Then there’s the technical skill side, right? Um, you can’t just bring anybody on. Uh, they have to they have to be ready and prepared to be a business owner and uh and and business owners have a certain perception of the world that’s different than maybe everybody else, right? They can’t be just a worker be uh they have to really think about as an entrepreneur the sacrifices, the suffering, the the good times, the bad times to be able to then grow a company, right? And so so we try to look for that. We try to quote unquote test for it through interviews, through testing and and just trying to get a sense of, you know, is somebody able to go through this whole process, right? and and and and you know, as an entrepreneur myself and and and you’ve done this as well, that journey, a a long journey, it’s it’s a bumpy road, not a smooth road whatsoever. It’s not a highway, right? It’s like going into the woods and and and at best maybe following somebody else’s trail. Um so, we want to make sure that it’s somebody that can handle that type of uh rigor, if you will. Yeah. And and and ability to pivot, right? So, what if things don’t work out? uh and and and something breaks, what do you do? You know, how do you fix it? Right? And those become very important.

You’ve mentioned a few times that you’ve done one exit. Could you talk more about this company?

Yeah, so that exit happened uh at the end of 2024 in December. Uh it was a good exit. We we got 45% irr from it. Uh it was a shorter hole than we anticipated. Uh but the company grew uh the way it needed to. uh and uh believe it or not, the family that that sold it to us wanted it back and so so so they bought it back from us uh after the growth. So, uh it was just kind of a unique situation. Um and we were like, well, we hit our numbers, so that’s fine. And and so we we did a transaction there, right?

What are your thoughts when it comes to the next 5 to 10 years in this industry?

Lots of tailwinds. I don’t have a crystal ball. Every time every time I try to predict the future, I’ve been wrong. Uh but here’s here’s what I do know. uh over the next 5 10 years, you’ve got baby boom uh baby boomer generation reaching full retirement age, right? Uh so the first baby boomers starting to retire actually just happened uh over the last 5 years previous. Um but when you look at the next 5 10 years now, they’re all into their 70s and 80s, right? Uh and a lot of them were entrepreneurs and they’ve built very comfortable, good lifestyle type businesses. I think there’s a huge opportunity for transition there. A huge opportunity. Um, what does that mean in terms of multiples? What does that mean in terms of buying opportunities or exit opportunities? I’m not quite sure. I I I really don’t know. Um, I know where we’re buying at now and that’s roughly at 5x, but that varies from 3x to 6x and then you average out to five. uh I think it still comes down to the type of business, the longevity of that business, the growth opportunity of that business. Those are going to be very key uh conversations. Now, macroeconomically speaking, I know those trends are happening, but I do worry about is there a global recession coming, right? Um, is there going to be more political or geopolitical unrest, right, with, you know, this whole conversation about Ukraine and, you know, Palest the the Gaza and and Palestine and all this? I think, you know, and then is China going to try to attack Taiwan? I mean, like there there there’s some real geopolitical uh things that could really shake things up. Um, is there going to be another pandemic? I don’t know. It it seems like we’re all hyperfocused on trying to make sure that that doesn’t happen. Um but business goes on business goes on and business has to adapt and has to has to move with whatever is happening right so you’ll see those things happening I think that’s the beauty of this sector of of entrepreneurship and business is that you have to survive and so because of that you make changes and pivots as the world is changing right as the world is changing uh and and so businesses that cannot do that die anyway and so when I look out at the next 510 10 years. I think I think the future is bright. I I think that entrepreneurship is truly what is going to keep everything going, right? And when you think about that, um that’s what always has really driven the world and the world and and and its economy, right? That’s where big businesses grow from. Um opportunities grow from, job creation grows from it. It all comes to to really business and and entrepreneurs.

You’ve had a fast last two and a half years. If you’d start again today, would you change anything?

Oh, you know, I’m not a I’m not a hindsight kind of guy. Um I try to learn from from the past. Um I think we make those changes as we learn from the past. Um if I think through uh I don’t know. I you know, you know, I feel like you you get those lessons and that’s why they exist. So I don’t necessarily want to go back and change anything but I think the past has taught us some things right which is why we’re now kind of moving in separating North America and Europe right uh as part of that that’s why the program and the NCA has shifted more into mid-career uh type entrepreneurs. Uh so I think we’re just honing our model down. So so I yeah I wouldn’t say I want to go back and change anything. I I I I think uh it’s more of what do we learn? Uh and I think we’re in real time right now uh adjusting to to those learnings. These were the lessons actually.

What’s next for you? How large do you want to build it and how far do you want to go?

Yeah, I would I would love to see this program be a global thing. Be a global thing because what we took was this really uh US idea of search funds where you have MBAs. We’ve done it in Europe. We’ve done it in North America. Now I would really like to to think that this program could be a international type program where we have entrepreneurs and searchers in in Australia, Europe, South America, all over, right? All over. Uh and to be able to create this ecosystem that allows for businesses to not have to die as the founder dies, right? Um and and retires. And so I think that that’s really the future. Now to me, if you want to quantify that, I mean that’s a multi-t trillion dollar asset class now, right? Uh which today is not even considered an asset class, right? It’s just now starting because when you look at the NBA schools and all the top programs in the NBA schools, they’re starting to have this as part of their curriculum and as part of their career path. That tells me that we’re on the cusp in the beginnings of how this thing can be a real asset class down the road in the next five maybe 10 years where you talk to a a big pension fund or a retirement plan and they say oh yes you need to put you need to invest some dollars into ETA or search right it becomes a real category.

What do you learn and study to stay competitive?

Personally, oh personally, I mean, you know, here I’m I’m this is what I’m reading right now. The laws of human nature. So So that tells you that I’m I’m I’m trying to learn more psychology really more than anything else, right? um because ultimately it’s about people and I think people drive uh everything that happens right whether it’s even with AI and stuff like that I think it’s still people driven um I think it’s you know obviously I try to stay current uh in terms of political news business news those sorts of things that’s more of just every day just checking in and seeing where markets are at and what’s happening um from a a a long-term growth perspective uh obviously reading things like you know, human nature and and understanding uh uh kind of those sorts of things. Uh the book right before this one that I read was actually a AI book about how to humanize AI uh so that you know we don’t have Skynet taking over the world and and it turns into Terminator or Matrix or something like that. Um and so so I I just read very different things. I love business and so I tend to uh you know uh try to uh you know understand what’s going on and ideas around you know business and what people are thinking about. Um you know I teach a class at at one of the universities here uh in in Austin. And so uh I try to stay on top of you know my my my curriculum that I teach. So just a lot a lot of random stuff a lot of random stuff to to always stay ahead. You know I’m a big believer that you never stop learning. Uh so there’s always something new to learn. Uh and even in my personal life um two years ago I started playing piano because I always wanted to play piano but I I had no musical inclinations. And so that was you know now exercising a different part of my brain. And so I think that that’s important right um and and then physically you know you get older it becomes harder to do certain things. And so, you know, you try to, you know, work out a little bit more and and stay mentally and physically, you know, fit.

What is your favorite book and what is the best investment advice you’ve ever received?

Oh, wow. Favorite book, huh? Um, I there’s a lot of favorite books. I would say that um top of the list still is uh seven habits of highly effective people. Um that to me is still still holds very true today and I actually teach that to a lot of students because I think it’s so important. Um and uh maybe number two I would say would be and it’s not one of mine. I’ve I’ve written two books so I wouldn’t put my my books at the top. Uh, but as far as what I’ve read, I think number two would be probably Daniel Pink’s drive and really understanding motivation and how humans uh are motivated and and why what makes happiness and how that all works. So, so those are my top two right now. And what about the best investment advice you’ve ever received? Oh gosh, investment advice. Um, invest in people. When you’re investing, always think about it that you’re investing in people. And so the the better you are at understanding people and understanding how to invest in people, that tends to be your biggest and best return.

Yuen Yung Business Stats

Yuen Yung has achieved remarkable success through his business acquisition strategy with Halbar Partners. In just 24 months, he has completed 15 acquisitions totaling $270 million in enterprise value, working with a diverse team of professionals across multiple continents. His approach focuses on acquiring profitable companies with aging founders and implementing growth strategies to increase value before exit.

• 15 companies acquired in just 24 months
• $270 million in total enterprise value
• Average acquisition cost of $15 million per company
• Typically acquires companies at 5x EBITDA multiple
• Average seller age of 72 years old
• Achieved 45% IRR on first exit
• 50% of deals in North America, 50% in Europe

Metric	Value
Total Acquisitions	15 companies
Total Enterprise Value	$270 million
Average EBITDA of Acquired Companies	$3 million
Average Acquisition Multiple	5x EBITDA
Average Seller Age	72 years
Post-Acquisition EBITDA Growth	13% average increase

Yuen Yung Method

Yuen Yung’s business acquisition strategy focuses on entrepreneurship through acquisition (ETA), identifying profitable companies with aging founders and transitioning them to new leadership. His method combines institutional capital with operational expertise to create value and drive growth before exiting the investments.

• Partners with incubators like NCA to identify and train mid-career entrepreneurs
• Targets companies with $1-10 million in profitability owned by aging founders
• Structures deals with a combination of debt and equity financing
• Implements post-acquisition growth strategies focused on sales, marketing, and technology
• Establishes formal governance with boards to provide oversight and support

Yuen Yung Tools

Yuen Yung leverages a combination of institutional relationships, technology platforms, and strategic partnerships to execute his business acquisition strategy. His approach emphasizes efficiency and scalability across all aspects of the acquisition process.

• NCA Partnership – Primary source for identifying and training entrepreneur talent
• Institutional Capital Network – Access to funding for acquisitions through family offices and syndicates
• Due Diligence Framework – Systematic approach to evaluating acquisition targets
• Technology Stack Assessment – Identifying opportunities to improve operational efficiency
• Governance Structure – Formal board implementation for portfolio companies

Key Notes

The business acquisition strategy employed by Yuen Yung and Halbar Partners offers valuable insights for entrepreneurs and investors looking to enter the ETA space. Their approach addresses key market inefficiencies while creating value for all stakeholders involved in the acquisition process.

• Focus on mid-career entrepreneurs rather than recent MBAs reduces risk
• The partnership model splits the “farming” of entrepreneurs from the capital investment
• Institutional investors can enter the space by skipping the J curve through partnerships
• Post-acquisition growth typically comes from sales, marketing, and technology improvements
• Formal governance structures are critical for successful transitions

Get Started in Just 5 Steps

Aspiring entrepreneurs can follow a similar path to Yuen Yung’s business acquisition strategy by implementing these five key steps. This approach provides a framework for entering the entrepreneurship through acquisition space and building a successful portfolio of businesses.

• Develop expertise in a specific industry with 10+ years of experience
• Join or partner with an entrepreneur incubator like NCA to gain access to training and deal flow
• Build relationships with capital providers including family offices and syndicates
• Identify profitable companies with aging founders who are ready for transition
• Implement post-acquisition growth strategies focused on operational improvements

Conclusion

Yuen Yung’s remarkable success in acquiring 15 companies worth $270 million in just 24 months demonstrates the power of a well-executed business acquisition strategy. His approach of combining institutional capital with operational expertise through partnerships like NCA addresses key market inefficiencies while creating value for all stakeholders. As the baby boomer generation continues to retire, the opportunities for entrepreneurship through acquisition will only grow, making this an increasingly important strategy for business builders and investors alike. Yuen’s journey from immigrant roots to business acquisition leader serves as an inspiration for entrepreneurs looking to make their mark in the world of business acquisitions.