January 2, 2021

How the Wealthy REALLY Start Businesses!

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How the Wealthy REALLY Start Businesses!

Unconventional Acquisitions

January 2, 2021

Most people think 0 to 1. They start a business venture and, despite many failures, continue to grind at this relentless startup game with an incredible rate of failure.

Sometimes it works, most often it doesn’t. Which is why 96% of small businesses fail within 10 years of being started. 

Startup fetish leads to a higher divorce rate, a 60% bankruptcy rate, and let me tell ya from experience.. The pay is abysmal.

$43k on average for an entrepreneur. Hmmm, no thanks. 

Now I have huge respect for startup founders because I’ve been one a few times over, I’ve invested in MANY of them, AND because their grind is going to be your freedom. 

Why would you take a huge pay cut for the uncertainty rollercoaster of startup land when you can buy your profits with someone else’s money? 

That is what we are going to teach you.  How to have your cake, and eat it too. 


They say: Now is a terrible time to be a private investor, especially an angel investor.

We say: FALSE, now maybe THE BEST TIME to be a private sector investor.

In my humble opinion, there has never been a better time to be an investor (and especially a business buying investor).

Why? The 2008 crisis was a HOUSING crisis, this crisis is a small BUSINESS crisis.

What is the one thing you wish you would have done in 2008… buy a house right?

What is the one thing I THINK you will wish you have done in 2020… buy a business.

And while I am not alone in this, yes, I’m biased. Let’s disclaim upfront. I’m a partner at a growth equity firm (Entourage Effect Capital), and a board member at the largest angel group in cannabis, The Arcview Group, and a very active angel, seed, and private deal investor.

AND YET, as Nicolas Taleb says the most important thing you should look for is who has skin in the game? I am putting my money where my mouth is, into buying companies now in bigger amounts than I ever have, and our firm Entourage Effect Capital is doing the same.

We’re not alone and we will show you why. 

Let me caveat this upfront by saying no one wants to profit off of what is happening. However, as investors, it is our job to continue to try to invest money so that we create a virtuous cycle. We invest, companies grow, jobs thrive, employees prosper, and we make money so we can keep doing the dance.

If we don’t invest in businesses, help turn them around, or buy them outright, this trend below continues. 

Buying a small businesses: Why RIGHT NOW is the time to start

  • 2.5MM+ small businesses for sale in the US
  • These are profitable businesses with revenue between $1 – $5 million annually.
  • 1/10 will sell inside a year, maybe fewer in this environment 
  • There are desperate sellers who want out because they are tired, the world’s hard, they don’t have a transition plan. They want to retire, and the list goes on. 
  • Baby Boomers are retiring at increasing levels (74MM will retire by 2031)
  • Bankruptcies will be at all time highs as unemployment rises

All of this means that the sellers are motivated and motivated sellers give better prices, think more about the exit, their legacy, and getting out rather than fighting you on price.

That is exactly what you want! Not to mention buyouts and investing at depressed valuations are a lifeline for a company in distress and its employees to continue to survive. 

Most business buyers come into a market during bull runs. During this time entrepreneurs tell you their companies are worth $1B w/ no profits, yup I’ve gotten that pitch deck… TWICE. Newbie investors spread dollars like nothing can go wrong, life is good, and living is easy. But the truth is those are some of the worst times to put money to work. It’s just the law of buying at highs.

The real money is made when things are tough, and your gut is telling you to put all your money in bitcoin as the Fed prints money like it’s Venezuela. Which is a bit akin to the world we live in today post CARES Act 1 & 2 and nods to the massive amount of bankruptcies we are seeing.

We believe that because of all of this, we are at a precipice of a global reset in business buying.

As an investor, it is your turn to participate, and you won’t be the only one. There is $4.7T in cash sitting and waiting on the sidelines as you can see. below.

Prices favor investors in a way they haven’t since 2008.

Another fascinating aspect is that in the Venture Capital/Private Equity world, the best vintages (funds) usually are those who invest during and right after a crisis. 

So, let’s make sure you are prepared for this opportunity, we probably will never see another like it in our lifetimes after all.

After all we are here with you to build the next great industry and in my very humble opinion there may be no better time than now.

Hats off to those of you who step forward when so many will sit on the sidelines paralyzed instead of poised for this opportunity. Let’s do this.

Yours Unconventionally,

Codie Sanchez & Ryan Snow
Co-founders Unconventional Acquisitions

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