Here’s how a Harvard MBA student purchased a company with “less than $50 million in revenue” without investing or spending any of her own money. (VIDEO)
Sarah Moore used the university’s library as an office and hired 50 unpaid interns through craigslist to search through 400,000 private companies over the course of 18 months.
She actually had to have fake student IDs made so that her interns could get into the library.
When she found businesses she liked, she got very clever. One example: She would send company’s a FAX with a picture of herself wearing a sweatshirt that read “I want to buy your business.” She sent thousands of faxes and sometimes gets recognized in public because she sent so many.
Eventually she found EggCartons.com, which met her criteria for a stable and simple business.
Here’s how she bought it: She contacted 100 banks before she found one that would provide an uncollateralized loan for 75% of the purchase price. And the seller provided seller financing for the other 25%. She even got the accountant that audited the business to roll their fee. So she didn’t have to invest any of her own capital.
To fund her search she would even enroll herself in research studies, and she temporarily went legally blind in one after testing a new deodorant.
I couldn’t get specifics on financials, but per the podcast where I heard this story, the company has less than $50 million of revenue.
I love this story because it demonstrates what’s possible in PE. You have to network like crazy, but the reality is that whatever two people negotiate is possible.