Welcome to Upper Market

For most of a century, to drive a yellow cab in New York you needed a medallion: a small tin plate bolted to the hood. The city capped how many existed, so they were traded like property, and by 2013 a single medallion cost more than a million dollars.

We could argue that this was where the Mileannial’s obsession with medals began.

People weren’t buying the tin - they were paying for the law that kept everyone else out.

Ride-sharing arrived, the barrier stopped mattering, and the medallions lost most of their value almost overnight.

Great businesses have walls that can’t be scaled easily - buy accordingly.

What's ahead in this Newsletter:

You probably need Capital.

How do I know this?

Because for the last couple of years I’ve been talking to you all and I’ve listened.

“All this information is great, but how do I find an Investor?”

I’ve focussed predominantly on teaching “The Game” of Business Acquisition, but ignored (perhaps foolishly) the thing that prevents most people from even getting started.

Finding Capital.

If you had access to investors that could cover your blindside, provide you with perspective and were ready to move with you on deals you want - would you move faster, with more conviction and close your first deal?

We both know the answer

I promise to stop dry humping you with the solution - and I will start giving you the tools to be able to do it.

We’ve taken the long route to get here - and let me explain to you why.

You’ve been armed with the ability to learn “The Game” that you can actually apply any Capital Raising tactics to.

All my free resources (that you’ve got access to and which you’ll continue to find being deployed online) will teach business acquisition.

Soon, there will be paid resources you can buy, which will teach you how I raised over $1.5m of capital to fund my own deals. I finished recording the first half of these this past weekend and should have it ready to go by next week.

I already know that there a handful of few people in the world who can teach business acquisition to the depth that I can as an operator.

There’s even less that can show you how you can go from no access to capital, to having more investors than you could ever need.

In the meantime, I’ll share with you something that I can promise you.

You already have the capability to raise money. You just need to remove false beliefs that don’t serve you and build habits that attract investors.

Standby.

$1.2m of EBITDA after paying a full management team, thousands of installed units pulling in service and consumables, an exclusive line to the overseas manufacturer, and a team of just three. Price on application. A thirty-year market leader built on the best kind of revenue: the kind that keeps coming after the sale is made.

This is the largest and longest-established specialist in its niche, a premium corner of the wellness industry, importing and distributing an international brand under an exclusive relationship with the manufacturer. The real engine is the installed base: thousands of units already out in the field carry the company's branding and phone number, so they generate ongoing consumables, servicing and upgrade work year after year. The homework is proving that recurring base is as good as it sounds, and that the exclusive supply is secure.

The business reports a FY2027 forecast EBITDA of $1,200,000 after full management costs, or $1,350,000 of owner-operator earnings for a working owner, with revenue up every year for five years. It runs on a lean team of three with installation handled by trusted subcontractors, holds a direct exclusive-supply relationship with the international manufacturer and its owner, and reports no customer concentration. The recurring revenue is structural: the installed units themselves drive consumables, service and upgrade demand, making the income far less dependent on winning the next new sale.

What I'd Want to Understand:

First is the split between the two earnings numbers, and that it's a forecast. The listing quotes both $1.2m EBITDA after management and $1.35m of owner-operator SDE, which is exactly the right way to present it, so I'd confirm which I'm buying: if I run it myself the ~$1.35m is my reality, and if I stay hands-off the ~$1.2m is the number, with a real manager's salary genuinely deducted. And since these are FY2027 forecasts, I'd anchor them to actual audited results: the "revenue up every year for five years" claim is the thing to verify in the accounts, not the projection.

Second is the quality of that recurring installed-base revenue, because it's the whole moat. Thousands of installed units generating consumables, service and upgrades is a razor-and-blades annuity, which is the best feature here, so I'd quantify it precisely: what share of revenue and profit is recurring aftermarket work versus new unit sales, how many active units are out there, what each generates a year, and how reliably owners come back to this business rather than a cheaper third party for consumables and service. The bigger and stickier that base, the more durable the earnings.

Third is the exclusive supply agreement. The exclusive relationship with the overseas manufacturer is both the moat and the single point of failure: the manufacturer could change terms, appoint another distributor, or sell direct. So I'd read that agreement closely, its term, its exclusivity, what happens on a change of ownership, and how personal it is to the current owner versus institutional to the business. An exclusive import line is wonderful right up until the person whose product it is decides to take the margin back.

Fourth is the lean team and the subcontractor dependency. Three people running a business with $1.2m of EBITDA is impressively efficient, but it also means each person matters, so I'd want to know exactly who does what, whether the owner is one of those three, and what transfers on a sale. Installation sits with subcontractors, so I'd confirm that's a reliable, replaceable arrangement rather than a dependence on one crew, and that the servicing capability, the thing that monetises the installed base, is secure and scalable.

Growth Angle: The structural beauty is the installed base: every unit sold today is an annuity that pays consumables and service for years, so growth compounds rather than resets, and a larger installed base makes the whole business more valuable and more defensible. A buyer could push harder on new-unit sales to grow the annuity, deepen the service and consumables attach rate on existing units, and lean on the exclusive brand in a wellness category the listing describes as fast-growing. With a lean cost base, incremental revenue should drop through at high margin.

The Drawbacks: The headline numbers are a forecast, so they need proving against real history, and the exclusive supply relationship means your fate partly rests on an overseas manufacturer you don't control. A three-person team is efficient but thin, and the premium-wellness demand that drives new installs can be discretionary and cyclical. The recurring revenue is the core of the thesis, so if the aftermarket turns out smaller or less sticky than implied, the whole valuation case softens.

Final Thought: A thirty-year market leader with real recurring revenue from a large installed base, an exclusive brand and $1.2m of genuinely managed EBITDA is close to the ideal shape of a business, earnings that keep arriving after the work is done. Whether it's worth its price comes down to proving the annuity: verify the recurring aftermarket revenue, confirm the exclusive supply is secure and transfers, and anchor the forecast to five years of actual accounts. Get those right and you're buying an income machine. Get them wrong and you're paying a premium for a sales business dressed as an annuity.

If you want more details on any of these businesses or would like an introduction to the sellers, just reply to this email.

Earlier this week, I saw something interesting. What looks to be one (or potentially multiple) gas station owners are hoping to unload the rights to the convenience stores on the sites of property - or gas businesses that they own.

Interesting.

Enough so, that it warrants its own slot.

It’s not something that I’d spend too much time sniffing around (while I like the smell of gas, I’m aware it’s not healthy). But it points directly to a concept in business acquisition that I think is valuable for you to know.

It’s called a “Carve Out”.

Carving Out, is when you take an asset (or parts of an asset) and start selling them for capital (or sometimes no capital). Smart, but sometimes “crazy” concept to the naked eye.

A carve out can happen for a bunch of reasons - but we’re going to cover two.

1) Capital Reallocation - The asset (or pieces of) have a value to them. That’s capital. Rather than having the money sitting in that asset, it may be better of recouped and deployed in another opportunity.

2) Cutting Losses - The asset (or pieces of) are underperforming. Holding them, costs money to the current owner. In the hands of someone else, it might be more valuable.

Essentially, the convenience stores no longer make sense for the owner to own, they would prefer the money and it could be far better off for someone else to own them.

This is most common in Small Businesses when the asset would make more sense to be owned by someone who wants to step in and run the operation as a owner-operator, rather than staff it to be a managed operation.

From my eye - this tells me a couple of things:

1 - The stores are not actually profitable and;

2 - They’re a pain in the ass to run.

This isn’t a call for you to try buy any of them, but take a look if you like. You’ll see that they’re really just a dairy attached to a pump.

So what does this mean for you and how can you use a carve out to find your first acquisition?

There are businesses which have unprofitable or “annoying” profit centres which are causing more harm than good to the current owners. You’re in for a deal to pick this up, find a way to return them some of their capital and potentially walk off with a no-money down deal, or an asset that you can resell for cash in the future.

I welcome your thoughts, questions or commentary on this