Investment Thesis
Disciplined diligence, proprietary sourcing, anchor capital, and a targeted value creation engine — built to deliver attractive risk-adjusted returns in small business acquisitions.
Market Opportunity
$7.4 trillion in small business assets are held by owners approaching retirement, creating a sizeable supply of attractive businesses for sale. Self-funded search has consistently delivered investors an estimated ~30% IRR, and the SBA 7(a) program enables up to 90% loan-to-value — making this one of the most compelling risk-adjusted opportunities in private markets.
$7.4T Succession Wave
51% of small business owners are 55 or older. The supply of quality businesses far outpaces buyer readiness — and these targets fall below the radar of institutional PE.
Favorable Deal Economics
Purchase multiples of 3x–5x (vs. 10x+ in traditional PE), government-backed leverage up to 90% LTV, and buyer negotiating leverage from active management requirements.
Technology Transformation
Most small businesses run on spreadsheets and manual processes. Structured tech-enablement drives 67–230% higher trading multiples for transformed companies.
Portfolio Performance vs. Market
Based on proprietary data from 250+ small business acquisitions reviewed. Sources: Stanford GSB, SIG Partners
Three Investment Themes
We follow a disciplined evaluation process in pursuit of these themes across every investment opportunity.
Staying Power
We identify companies with sustainable earnings power that can endure challenging environments. By focusing on businesses that have survived multiple economic cycles, generate high-quality revenue, and provide essential products and services, we inherently mitigate risks related to demand shocks and obsolescence.
Incentive Alignment
Stakeholders have aligned economic incentives and the operator is well-positioned to execute strategic priorities. We pay close attention to governance structures to ensure all parties are aligned with investors and can be held accountable.
Asymmetric Bet
A credible path to an outsized return combined with a healthy margin of safety over a downside scenario. Our proprietary modeling centers on identifying opportunities with a credible path to 30%+ IRR, while generating a return marginally better than the S&P 500 in a realistic downside case.
Investment Criteria
We partner with the best entrepreneurs and the best businesses across a diversified portfolio of small business acquisitions.
The Company
Essential Products & Services
Companies providing essential products and services with low EBITDA volatility, selling into attractive end-markets.
$500K–$3MM EBITDA
Profitable businesses with sustainable growth and margins, too small for institutional PE but large enough to support professional management.
10+ Years Operating History
Demonstrated resilience through economic cycles. Businesses that have endured prove they can continue to endure.
HQ in North America
Headquartered in North America with well-aligned management and clear paths to sustainable growth.
The Acquisition
Purchase Multiple Below 5x
We seek acquisition terms that provide a margin of safety. Our portfolio averages 3.9x — 15% below the market average of 4.6x.
40–70% Leverage
Prudent capital structures that balance leverage with investor protections and operational stability.
Aligned Incentives
Economics aligned between buyer and investors, with shareholder rights, robust protections, and terms that create an asymmetric risk-return profile.
Technology Opportunity
Clear potential for tech-enablement and inorganic growth — areas where SFV can directly support execution.
The SFV Flywheel
Four reinforcing divisions that secure proprietary deal flow, unlock better terms for investors, and provide a sustainable path to deploying meaningful capital into small business acquisitions.
SFV Fund Series
Committed capital base provides foundation for co-investments, makes us a more credible partner, and supports underwriting rigor across the portfolio.
SFV Proprietaries
We source businesses, negotiate terms, and partner with top-tier operators — giving us dominion over deal terms and value creation strategies.
SMB Investor Network
1,500+ accredited investors and family offices provide co-investment capital, accelerate closes, and ensure cap-table certainty on every deal.
Value Creation
Targeted capabilities in tech-enablement, M&A, and operating systems that improve the predictability of outcomes and differentiate us from plain-vanilla capital.
Value Creation Program
A three-phase system that starts before close, executes through transition, and scales with modular support — orchestrated by a dedicated Execution Lead.
Day-1 Ready Track
We translate diligence findings into a ready-to-run plan — reducing Day-1 surprises and compressing time-to-value.
- →Tactical 0–90 day plan with task owners
- →Risk and mitigation register
- →IT & cyber infrastructure assessment
- →BOS readiness evaluation (EOS / Pinnacle)
- →Sales & growth evaluation
- →Week 1 communication calendar
Time commitment: one 30-min call per week during diligence
Transition & Foundation
A time-boxed 90-day sprint with milestones, accountability, and execution support — then continued infrastructure-building through month 12.
- →Dedicated Execution Lead running cadence
- →Weekly operating reviews with risk register
- →Shared Value Creation portal (single source of truth)
- →Finance, accounting & fractional CFO
- →IT remediation & monitoring
- →BOS implementation (EOS / Pinnacle)
You make decisions. Execution Lead manages timelines and escalates blockers.
Scale & Compounding
With foundation in place, we deploy modular services to drive earnings growth, tech-enablement, and multiple expansion.
- →Process optimization & workflow automation
- →AI implementation & custom development
- →Add-on M&A sourcing and integration
- →Growth systems (sales, marketing, recruiting)
- →Governance & board advisory
- →Monthly check-ins with Execution Lead
Modules deployed based on strategic priorities and business needs.
The Execution System
Most value creation plans fail at execution — not strategy. We built an operating system around that reality.
Every portfolio company gets a dedicated Execution Lead who owns the cadence, manages timelines, coordinates specialists, and escalates blockers. The operator retains full control and decision-making authority.
Single Source of Truth
Shared Value Creation portal with task plans, risk registers, decision logs, scorecards, and milestone tracking — accessible to operator and support team.
Structured Cadence
Weekly operating reviews during transition, monthly check-ins at scale. Decision-driven meetings with clear owners and accountability.
Coordinated Specialist Bench
Operating partners deployed as needed — finance, IT, BOS, recruiting, sales, marketing, tech-enablement, M&A — all orchestrated through the Execution Lead.
Modular Support Services
Tech-Enablement: The Long-Term Thesis
Every engagement is designed to produce a tech-enabled business. The Execution Lead documents systems and processes throughout the journey, building a blueprint for transformation.
Process Optimization
Document, clarify, and streamline core business processes during the transition and foundation phases.
Workflow Automation
Identify and implement strategic software, automating manual workflows to reduce cost and increase throughput.
AI Implementation
Deploy AI across operations — from customer-facing intelligence to internal decision support and predictive analytics.
Custom Development
Build proprietary tools and integrations that create defensible competitive advantages and drive multiple expansion.
The Data
of failed deals cite transition and integration issues as root cause
faster EBITDA growth for businesses with standardized playbooks
higher trading multiples for digitally transformed companies
premium for top-quartile tech-enabled companies over bottom-quartile
Sources: PwC, Bain, McKinsey, LG Networks, Research Metric, Oxford QJE
Risk Management
83% of failed deals cite transition and integration issues as the root cause. Our program is built around that statistic.
Pre-Close Risk Mapping
We build a risk and mitigation register during diligence — key person risks, customer concentration, IT vulnerabilities, supply chain dependencies — and incorporate each into the 90-day plan.
Transition Execution
Communication plans, stakeholder outreach, employee retention strategies, and leadership presence — all mapped and tracked through the Value Creation portal.
Single Points of Failure
We identify and create contingencies for every critical dependency — people, systems, vendors, customers — before they become problems.
Conservative Structure
Purchase multiples averaging 15% below market, credit metrics 24% less risky than comparable acquisitions, and investor terms 22% less burdensome than the broader market.
What We Assess Pre-Close
Operator-Led. Partner-Driven.
You retain control — we bring structure, specialists, and execution support. Our goal is to make outcomes more predictable by mitigating key risks and driving sustainable growth.