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Episode 03 The Investor Series
Chris Maresca on why Mergerin is buying thousands of small businesses
Chris Maresca, partner at Mergerin, a hybrid evergreen fund acquiring founder led small businesses across Europe and North America, on buying at one to two times EBITDA, why a toxic culture is a hard no, and holding rather than selling.
The plan
From 12 deals this year to 300 next year
Mergerin spent its first years building the thesis and the infrastructure to buy at scale. It has completed one acquisition, plans 12 this year and 300 next year, on the way to between 3,000 and 5,000 small businesses over five to ten years.
Acquisitions planned by Mergerin, as stated by Chris Maresca in the interview. One is already complete.
Mergerin operates
on the ground
purchase multiple
company value
If you build a toxic culture and then somebody is going to buy you, they've got to fix that. And fixing that is expensive.Chris Maresca, Mergerin
Key takeaways
How Mergerin decides
What he backs, what makes him pass, and how he thinks about the long term.
Culture is a hard no
A toxic culture ends the conversation, however good the numbers. It is hard to automate, but you know it within minutes of walking in the door, and turnover tells the same story.
Revenue that will not be decimated
Robust financials in a market that technology, new entrants or competition will not wipe out. Then the traditional metrics: revenue per employee, margins, growth path and market size.
Messy is fine
Most founder led businesses are run by the seat of the pants, with good cash flow but few standard procedures. Institutionalising them is where Mergerin finds its margin.
Hold, do not sell
Structured as a hybrid evergreen fund, Mergerin plans never to sell unless an exceptional offer comes along. The aim is steady, predictable returns, spread across many countries and sectors.
The target is a classic founder led small business with less than $2.5 million of EBITDA and an owner looking to exit. Chris is candid that the model still has to prove it can scale: "That's why we're testing it first."
