Judd Lorson Survey

 Judd Lorson, Alliance CAS

Alliance CAS, Current Operator, SFA Accelerator

Survey completed September 18, 2020.


Why did you choose your model? Would you make the same choice again?

Coming from a non-traditional deals background (military) I felt the accelerator route gave me the best risk adjusted chance of becoming the CEO of a good investable business. Given everything I know now I would not make the same choice. However, I would not know what I know now had I not searched the way I did.

Did you search with a partner? If so, why did you choose them? How did you find them? If not, why did you choose to search solo?

SFA only takes solo searchers. I had approached a few people I knew well during my evaluation phase but none checked all the boxes or timing was wrong.

When is the right time to start speaking with investors? How did you select your search and/or acquisition investors?

Talk to some searchers first to get your story straight. Otherwise, investors might not take you seriously. At SFA capital in a blind pool committed by dozens of LPs who you don’t meet or pitch.

Did you get an MBA before searching? If so, where and why?

Yes. Yale SOM. I wanted to map my leadership skills to the business world and this was the best option to do so.

Was your search geographically constrained? Where did you search?

I searched an inch deep and a mile wide across the lower 48 states.

How long was your search?

18 months.

How did you find the company you acquired?

Misc industry list reached with a cold email.

Describe the company you acquired.

Alliance CAS is a specialized debt collection company serving homeowners associations across the Southeast.

What was EBITDA and your purchase multiple at close?

$2.1M, 4.3x

How many employees did the company have at acquisition?

22.

Assuming you used a broker, how helpful were they during the transaction?

N/A

What was the post-close plan with the owner? How well did it go in practice?

Plan was for 3 months of formal paid consulting followed by on demand afterwards. It did not go well, I quickly determined that the sellers were engaged in business practices that I did not agree with and needed to end.

During your first year in the company, did you make changes/improvements? If so, how difficult were they to make?

Yes, we made some fairly substantial changes in the operational procedures, technology tools and accounting systems. Half were planned for, half were reactionary based on the facts on the ground.

How has the company performed post-close? What was more difficult than you expected? What needs to improve? What is going better than expected?

EBITDA took a dip but we recovered. Everything is harder than you think its going to be. We increased head count by 50% and still need to improve sales funnel and technology systems.

What did you not appreciate about running a company before becoming an operator?

How hard simple changes can be and how long they can take to implement.

How do you build company culture?

You simply it to to handful of buzz words, write them on a big whiteboard in your office, live them everyday and hire people into your business who espouse them.

Did you implement any growth initiatives, add services or new products?

Not really, we are still riding a growth wave initiated by the prior owners. Major work was on operational side.

What articles, books, and resources were most helpful to you in preparing to search and operate?

HBR guide, Jim Sharpe’s blog, Buy Then Build.

What do you wish you knew prior to searching and operating?

Everyone’s got a plan until you get punched in the face but you figure it out. No one is going to care more than your are as the owner.

What advice would you share to prospective searchers? Advice to current operators?

Searchers – be patient and find the right one but don’t let perfect be the enemy of good. Operators – use the slight edge to get better everyday, give back to your team every so often so you don’t burn them out.

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