Introduction
In this Q&A, I break down exactly how to buy a $22m business—my path from searcher to independent sponsor, why I pivoted from SBA to SBIC-backed debt, how we structured equity and carry, and how I took over Floor Guard, a coatings manufacturer with $3.7m EBITDA, while rebuilding culture and scaling distribution.
Founder Success Story QnA
Some background on you, please.
I started in management consulting at Accenture in strategy, burned out on the travel, and pivoted to tech as a product manager at SendGrid in Denver, where we built professional services and exited to Twilio. Later, I joined a 25-person consulting shop in Chicago, became Managing Director, helped scale the team, and we got acquired by a PE-backed accounting firm. Those experiences reinforced that I love building in smaller companies and pushed me toward buying a business.
When and why buy a business versus start one?
I thought my skill set was better served scaling a proven concept—installing process, marketing, and sales—rather than starting from zero. The ETA concepts in Buy Then Build resonated. Buying felt less risky and faster to cash flow than a startup, especially given our lifestyle from consulting.
How did your search take shape—criteria and approach?
I started with standard self-funded criteria: $750k–$1.5m SDE, SBA-backed, an hour from Chicago, home services or light manufacturing. I stayed in my W2 and hired a buy-side broker—Calder Capital—after joining the Acquisition Lab. Calder sourced proprietary leads and acted as my buy-side team through LOI and close. From retainer to close was 5 months; I reviewed five companies and put out another IOI along the way.
Why stay in your W2 and hire a buy-side firm?
Risk aversion and credibility. My salary funded the Calder retainer and preserved lifestyle while I searched. I felt a buy-side broker would present me as more serious to sellers than solo proprietary outreach. I committed 6 months at $5,000/month (gold package, 10 proprietary leads). It was a forcing mechanism—either find a business or I’d pivot later to full-time search.
How did Floor Guard come into the picture—and how big was it?
Calder qualified the owners who said they were “north of $1m EBITDA.” After the on-site, the GM pulled me aside and said they were actually ~$4m EBITDA—later confirmed at $3.7m. The sellers had understated profitability to keep competitors in the dark. That changed everything: I realized this couldn’t be an SBA deal and I’d need to raise significant equity.
How did you pivot to an independent sponsor model?
I saw a post by Nicholas James on independent sponsor economics and reached out. That 30-minute call was pivotal. He introduced me to SBIC funds, outlined deal structure, and helped me understand carry, deal fees, and non-PG debt. We priced the business at $22m (5.9x), with ~$7.5m equity raised, an SBIC debt package, and a seller note. I accepted lower ownership with carry and a board in exchange for no PG and growth capital.
Explain equity vs. carry and your economics.
Equity = based on dollars invested. Carry = share of upside after investor hurdles. My structure: ~30% ownership from my cash plus rolled deal fee ($500k as equity), and 20% carry after a 10% preferred return to investors. I invested ~$1.5m of my own capital—skin in the game mattered to investors.
Who was your lender and what were the terms?
Oxer Capital (SBIC) and Everside Capital split $13.6m of debt 50/50 and also co-invested equity. Debt was interest-only for five years with a balloon, enabling reinvestment in growth before refinancing with a senior lender later. Both funds sit on the board; board meetings are quarterly with monthly financial reviews. The alignment is better than traditional bank debt because they share upside and understand temporary misses on covenants.
What materials did you need to raise equity quickly?
A detailed sponsor deck (dozens of pages), an LBO model with downside/base/upside cases (target base IRR ~30–40%), LOI economics, and a clear growth thesis. I built the deck; IB friends helped refine the LBO. I raised $2–$3m outside of SBICs/my capital over 4–6 weeks. Early pitches were rough; feedback sharpened my thesis and terms. Due diligence costs were real—~$75k out of pocket before close.
What does Floor Guard do and what’s the history?
Floor Guard manufactures epoxy and polyaspartic coatings for concrete floors and operates a smaller installation arm. The founders pioneered slow-curing chemistry—our Slogo topcoat and epoxies provide ~60 minutes working time vs. the old 5–10 minutes. Installation began 35 years ago; manufacturing/distribution now accounts for ~95% of revenue, installation ~5%. We manufactured in Chicagoland and grew nationally via e-commerce and now distribution.
How did the seller transition go?
The plan was a long transition: husband (founder) to retire after 90 days; wife and daughters to stay indefinitely in leadership. In practice, it collapsed quickly. Day one, I couldn’t access the owner’s office. Resistance to change was strong. Within ~45 days, they exited abruptly and deleted company files, marketing assets, and took down our Facebook page. We issued cease-and-desist; everything was restored the next day. We focused on stabilizing operations and culture rebuilding rather than litigation.
What’s your takeaway on extended seller transitions?
I would avoid extended employment for sellers. Psychologically, going from calling all the shots for 35 years to stepping back is extremely hard. Even with good personal chemistry, change triggers friction. Clean transitions are better—short, defined support, then let the new team operate.
How did you approach culture change?
We shifted from hierarchical to empowered, accountable teams with department heads owning decisions. We improved employee experience: moved to fully funded healthcare (no premiums), raised salaries to market, and set expectations for a high-performance culture. Culture shifts take time—we’re ~9–10 months in and still reinforcing empowerment and process while growing 5–10% MoM with higher throughput.
What’s the growth strategy—e-commerce vs. distribution?
Previously, ~all chemical revenue (~$15m) sold direct via e-commerce from Chicago. Most contractors buy locally in smaller quantities, so we’re building a distributor network. We’ve grown from 3 to 21 distributors (e.g., Floor Guard Products of Houston/San Antonio). Distributors need margin, so we accept near-term cannibalization to unlock a far larger addressable market. Volume is up 20–30%, revenue up 5–10%, with a J-curve as distributors build local customers. Long-term, this enables 10–20x potential.
Are you still operating the installation business?
Yes. It was historically subsidized, now consistently profitable: ~$40–50k net income/month and ~$250k/month topline. It’s our live R&D and builds authenticity with contractors. The turnaround is largely marketing and speed-to-lead: proper website, Google Business Profile, call service, and follow-up. Win rates can be >70% because much of the industry lacks basic marketing ops. We’re even helping contractors upgrade their websites to grow their businesses, which grows ours.
What’s the plan for investor liquidity?
There’s a year-5 put option for investors at a third-party valuation, which could be satisfied via company cash flows, a note, or recap. Realistically, we expect a sale to a strategic or PE buyer in years 4–5, where I’d likely stay on through transition. I see myself as a builder-operator and could do another deal later, but for now I’m focused on scaling Floor Guard.
Yan Vinarskiy Method
I pivoted mid-search, used the independent sponsor structure to scale up, raised aligned capital, and focused on distribution and culture—each move de-risking growth while preserving speed.
- Start with clear criteria; be ready to pivot when a better opportunity appears.
- Use SBIC interest-only debt for early reinvestment and no PG.
- Offer skin in the game and balanced carry to align investors.
Yan Vinarskiy Tools
I leaned on Calder Capital for proprietary sourcing and execution, the Acquisition Lab for process, LBO modeling with IB friends, and SBIC partners for flexible debt plus equity. For growth, we use strong inbound systems, Google Business Profile, and a partner agency to upgrade contractor marketing.
- Calder Capital: Buy-side sourcing and closing support.
- Oxer Capital & Everside Capital: SBIC debt and equity co-invest.
- LBO Model + Deck: Investor materials to raise equity quickly.
Key Notes
Independent sponsor economics trade ownership for flexibility, capital, and speed. With the right board and lenders, you gain partners and a larger canvas to build on.
- Interest-only SBIC debt preserves cash for growth.
- Clean seller transitions reduce risk and accelerate execution.
- Distribution unlocks the long tail of contractors; expect a J-curve.
Get Started in Just 5 Steps
Here’s how I approached how to buy a $22m business—from search to close—so you can adapt the steps to your own acquisition.
- Define criteria; engage a reputable buy-side partner if you’ll keep your W2.
- Validate lender path early (e.g., SBIC) for non-PG, interest-only debt.
- Build a credible deck and LBO model with realistic cases.
- Raise equity with clear skin in the game and aligned carry.
- Plan post-close: culture, distribution build-out, and clean seller handoff.
Conclusion
My path shows exactly how to buy a $22m business using independent sponsor economics: raise aligned capital, avoid a PG, and reinvest early. With the right partners and a clean transition, you can scale faster—especially when you combine distribution strategy with a durable product and a rebuilt culture.