Membership fees and sponsorships cover the cost of operating the Lab. Our profits come primarily from investments in acquired businesses and post-close finance services.
That structure allows us to keep education free, maintain the support members use throughout their search, and build the business around what happens after acquisition.
Most businesses selling help with acquisition make their money before you manage to buy a business. Education is sold, coaching is billed, and pricing stays hidden until a sales conversation begins.
The Lab puts those things in the open. The education is free. The membership price is published. And every meaningful way we make money is explained on this page.
That gives you the information to judge the relationship for yourself before you ever apply.
Every new member pays $12,500 when they join. We pool those fees and put the money back into the people and infrastructure members use throughout the search: Advisors, off-market deal sourcing, the platform, tools, events, and the team behind it all.
We run Membership at breakeven, which means 100% of that fee goes back into the Lab.
That includes servicing the bank debt we used to bring the our Fund, the services business and the Lab’s membership program one roof. We signed personal guarantees on that debt too. It is the same basic financing structure many of our members will eventually use to buy their own companies.
Members have access to Advisors across search strategy, financing, diligence, legal, operations, and transition. They are named publicly and paid hourly for the time they spend working with members.
The fee also supports the broader team that keeps those calls, deal reviews, and day-to-day member support running.
A serious search creates a lot of information very quickly. The Lab pays for the technology, data, and systems that bring opportunities together, help members review them, and keep their pipeline organized.
That approach allows Lab members to spend more time evaluating businesses and less time maintaining spreadsheets or chasing broker emails.
Putting people in a Slack channel doesn’t create much value on its own.
The Lab pays for the programming and live events that give members reasons to meet, compare notes, build relationships, and keep those relationships going after the acquisition.
We publish education, tools, member stories, and public resources without putting the fundamentals behind a paywall.
Membership revenue helps support that work, along with the content and outreach that introduce more people to acquisition entrepreneurship before they ever consider joining.
Investing in acquired businesses is the Lab’s primary source of profit.
We provide optional capital to help qualified acquisition entrepreneurs buy larger businesses than they could on their own, then participate in the value those businesses create over time. Our meaningful returns come after the acquisition, not from charging the buyer for getting to it.
The Member-Owner, the Fund investors, and the Lab all participate in that outcome, and everyone profits when the business succeeds.
The Lab runs the largest Fund in the ETA space.
Today, it manages $20 million from more than 100 individual investors and can invest in acquisitions led by both Lab members and non-members.
The Fund is evergreen and backed by individuals rather than institutional funds. There are no artificial exit dates built into the structure. We can hold a good business for the long term instead of selling it to satisfy an arbitrary timeline.
Here’s a brief look at our Fund:
Investors pay a 0.5% management fee, compared with the traditional 2% model. We use that fee to support the people and infrastructure required to run the Fund and look to investment performance for the meaningful return. Similar to how we run the Lab, our Fund is breakeven until our investments generate a return.
The best part about our model is that we don’t have to pressure Lab members into a deal. We earn when we invest in capable owners and when they buy great companies.
If a Lab member decides that buying isn’t the right option for them, that’s okay. Our model doesn’t depend on selling the idea of ownership. The only bad outcome is buying a bad business.
Committed Capital combines funding with one-on-one support through the search, diligence, and closing processes.
Once a business is acquired, the economics have two layers. The capital invested by both the Member-Owner and the Fund is treated as preferred equity, and both also participate in the common ownership of the company.
Acquisition Lab receives additional common equity for the upfront funding commitment and hands-on support provided throughout the search.
The preferred capital gets paid first. The long-term upside follows the common ownership.
Unlike many funds in the space, we do not reserve the preferred position only for our own capital. The Member-Owner’s investment receives preferred treatment too.
That means preferred holders are paid first through distributions until their original investment has been returned along with a modest return.
After that, distributions shift to common ownership.
The Operator owns the majority of the common equity.
After the preferred capital and return have been paid back, distributions are based on common ownership. The Fund investors participate through their common stake, and the Lab holds additional common equity tied to its upfront commitment and hands-on support.
Operate is the Lab’s post-close accounting and finance service.
The service provides accounting and finance support purpose built for acquired businesses, where cash visibility and debt management become much more important the day the deal closes. The team combines US and LATAM talent to provide a stronger finance function at a cost a small business can afford.
Operate is a separate service and use isn’t required for regular members of the Lab. New owners can use us, hire someone else, or build the function internally. That said, Lab members often choose to work with us in their back office due to trust we’ve earned during their search.
When I bought my first company, I needed people who understood lender expectations and the pressure that comes from an ownership transition.
Most owners don’t have that, and it’s a problem because good, forward-looking financial management is the difference between owning a profitable business and defaulting on your personally guaranteed loan.
Operate gives new owners the financial infrastructure they need on day one, so they can take control with a much better understanding of their monetary situation.
Most opportunities members see through the Lab are on-market deals pulled from broker websites, marketplaces, and deals sent directly by brokers. We bring them together on the platform so members can search in one place.
There is no additional Lab fee if you buy one of those businesses.
Off-market opportunities are different. We invest in listing businesses that are not already being marketed for sale anywhere else. Members pay nothing for that work up front. A success fee applies only if you buy a deal our team sourced.
Finding a viable off-market business takes people, technology, outreach, and lots of relationship building before a member ever sees the opportunity. The success fee makes these investments sustainable.
We use the standard Lehman model in most cases, which means the percentage declines as the purchase price increases. The exact fee is disclosed in writing before you see the deal.
If you don’t want to pursue opportunities with a success fee, you can stay entirely on the on-market side of the platform.
Sponsors help cover the cost of running the Lab, and some sponsors work directly with members on acquisitions.
Those two relationships are separate.
A sponsorship check does not make a lender, attorney, or diligence firm one we are willing to recommend. The work has to clear that bar first.
We build preferred relationships with firms that have done good work for members and understand the realities of acquisition deals.
Once that track record exists, some of those firms choose to sponsor the Lab. The sponsorship deepens an existing relationship; it does not create one.
We don’t take commissions, referral fees, or kickbacks when a member hires a Lab sponsor. In most cases, members are free to work with other qualified firms, including firms that do not sponsor us.
Most members can hire whichever lender, attorney, diligence provider, or other specialist they want. The preferred deal team is a vetted starting point, not a requirement.
The Committed Capital program is the exception.
In that program, the Lab contractually commits capital before a member has found a business. If they later find a deal that meets the agreed criteria, we’re already committed to investing.
Because we make that commitment before we know the company, we require members to use approved providers for the work that directly affects underwriting, documentation, and diligence. If our investors’ money is going into the business, we need to know and trust the people helping put the transaction together.
We built the Lab so the people helping you make decisions don’t have a financial incentive to push you toward a specific choice.
Our long-term success depends on members buying good businesses, so Advisors, deal teams, and other specialists aren’t paid based on the choices you make.
If you want to know what the Lab is really like, spend some time around the people and places that make it work.
Searchers Circle gives you a chance to meet members in person. The admissions process puts you directly in conversation with a Member-Owner who can speak from their own experience. Roundtables offer another way to learn how the Lab thinks about acquisition before you ever apply.
Use those conversations and experiences to decide whether what we have built is right for you.
Because running the Lab costs money.
Membership fees and sponsorships are pooled to pay for the Advisors, sourcing, platform, tools, events, support team, and other infrastructure members use throughout their search.
The point of running Membership at breakeven isn’t that it costs nothing to operate. It means we put that revenue back into operating the Lab instead of treating Membership itself as the profit center.
No.
We decide whether a firm belongs on the preferred deal team based on the work first. They need to understand acquisition transactions, perform well for members, and meet the standards we would want on our own deals.
Some of those firms later become sponsors. Sponsorship does not buy the recommendation, and we do not take a commission, referral fee, or kickback when a member hires them.
The sourcing work isn’t free. We just don’t charge while it’s happening, and we don’t bill members who don’t end up using the service.
The Lab absorbs the cost of finding off-market opportunities and gets paid only when that work produces the business a member buys. There are no monthly sourcing retainers, and the exact fee is disclosed before the deal enters your pipeline.
Nothing. Both offerings exist for members who believe that working with the Lab’s services are the right fit for their use case.
Members are free to arrange their own capital or build their own post-close finance function.
We aren’t accepting additional investors at this time, but that may change at a future date.
Yes. Two businesses sit alongside the Lab under the same parent: a copier rental company and an events company. Both are profitable. Neither one is profitable because of anything a member paid us.
The copier business is just a copier business. We bought it with an SBA loan and a personal guarantee, it has a GM running it, and it’s a live example to demonstrate that we practice what we teach. No member will ever be a customer of it.
The events company runs the Searchers Circle events. It works at cost for anything Lab-related, so member dollars and sponsor dollars do not turn into profit for us there.
If we ever own something a member could end up doing business with, we will display it on this page before it shows up anywhere else.