Self-Funded Search vs. Independent Sponsorship

June 20, 2023
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I

magine having significant ownership in multiple small businesses.

Imagine you aren't operating any of them directly, but have trusted operators in place to lead each business.

You're more behind the scenes.

You have flexibility in your schedule.

So much flexibility in fact, that you have the bandwidth to do more of these deals.

Actually, your portfolio of businesses is generating enough cash flow that you could even hire a team around yourself to support doing yet more of these acquisitions.

Sound good?

Welcome to the life of the independent sponsor.

Now, I didn't really know what being an independent sponsor meant until not too long ago.

Maybe you're the same. Maybe you still don't.

Well today you're going to learn.

And you're going to learn from Niklas James, someone who started as a self-funded searcher (like many of you), and evolved into being an independent sponsor.

Which is great because Niklas deeply, personally understands the differences, the pros & cons of the 2 models.

And there are a lot of pros to the independent sponsor model.

You might even find yourself saying, "Huh, I should do that."

Especially if you're harboring fantasies of your own holdco. Being an independent sponsor, one who's done multiple deals, feels a lot like having a holdco — and in many ways better.

Niklas and I also discuss 2 of the hottest target industries in search: SaaS and HVAC.

Niklas has bought businesses in both, and you'll learn why SaaS isn't as appealing as it seems, while HVAC, despite high multiples, continues to be a great industry in which to buy businesses.

I learned a ton from Niklas in this interview, and you will too.

Here is Niklas James, founder of Siddis Group and sponsor of 7 home service deals since 2016.

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Self-Funded Search vs. Independent Sponsorship

Niklas James started off as a self-funded searcher, but evolved into being an independent sponsor of 7 acquisitions.

Key Takeaways

Introduction

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magine having significant ownership in multiple small businesses.

Imagine you aren't operating any of them directly, but have trusted operators in place to lead each business.

You're more behind the scenes.

You have flexibility in your schedule.

So much flexibility in fact, that you have the bandwidth to do more of these deals.

Actually, your portfolio of businesses is generating enough cash flow that you could even hire a team around yourself to support doing yet more of these acquisitions.

Sound good?

Welcome to the life of the independent sponsor.

Now, I didn't really know what being an independent sponsor meant until not too long ago.

Maybe you're the same. Maybe you still don't.

Well today you're going to learn.

And you're going to learn from Niklas James, someone who started as a self-funded searcher (like many of you), and evolved into being an independent sponsor.

Which is great because Niklas deeply, personally understands the differences, the pros & cons of the 2 models.

And there are a lot of pros to the independent sponsor model.

You might even find yourself saying, "Huh, I should do that."

Especially if you're harboring fantasies of your own holdco. Being an independent sponsor, one who's done multiple deals, feels a lot like having a holdco — and in many ways better.

Niklas and I also discuss 2 of the hottest target industries in search: SaaS and HVAC.

Niklas has bought businesses in both, and you'll learn why SaaS isn't as appealing as it seems, while HVAC, despite high multiples, continues to be a great industry in which to buy businesses.

I learned a ton from Niklas in this interview, and you will too.

Here is Niklas James, founder of Siddis Group and sponsor of 7 home service deals since 2016.

About

Niklas James

Niklas James
Olivia Rhye
Product Designer

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