Ep 365: How $10M – $100M Online Business Acquisitions Are Done with Emmet Kilduff

Raise a pool of money to go do multiple deals. There is a category buyer called a search fund, which is more of a case by case deal by deal basis, more similar probably to your listeners where a proven entrepreneur is part of a search fund. He or she goes out and searches for a great business they want to buy. And then they go back to their backers and raise the money to do the deal.

I'm Jaryd Krause, I'm host of the Buying Online Businesses podcast and today I'm speaking with Emmett Kilduff. He is the founder of the Fortier Group, which is an &A advisory firm specializing in the sale of e-commerce brands and digital agencies.

Now with a background at leading Wall Street firms and banks, including Morgan Stanley, Emmett brings institutional level &A valuation and deal structuring expertise to the small and mid-size online business market.

Through Fortier, he's advised founders, buyers, investors, and a bunch of people on acquisitions across the UK, US, and international markets, helping them navigate the financing, the positioning, the structuring, the exits with professional rigor.

And on this pod, we talk about e-commerce brands. We talk about the spaces in the size of businesses to help people exit. We talk about how to build relationships with sellers and buyers. We talk about his three-stage process of building relationships. We also talk about deal structures, financing, we talk about how to go from an operator to an owner and what to think about if you're looking at buying an online business.

There's so much value in this. Emmett has been doing this for over 20 years now, think maybe 25 years and he has a amazing portfolio and a wealth of experience and knowledge. You're gonna love this.

Emmett, welcome to the pod. Thanks for your time. Yeah, great to be here. Absolutely. Now, Emmett, you came from Morgan Stanley into advising smaller sort of online business deals still in the, I think you said you're in the 10 mil to 100 mil range for exits.

There's so many questions in here that I just want to dive into. But what do you see the gap and the difference between Wall Street, Morgan and Stanley and versus how everyday buyers think about financing acquisitions?

Typically on Wall Street or for larger deals, the buyers are indeed the sellers have advisors, whether it's Morgan Stanley, Goldman Sachs or JP Morgan. And these are very experienced deal makers. I think too many even early stage entrepreneurs or acquirers think they can do it all themselves, which is crazy. If Elon Musk hires Morgan Stanley to do an acquisition, why should an e-commerce entrepreneur looking to do a $10 million deal think they can do it all alone?

Or a smaller deal as well. In my range, the seven figure range, why would you be doing it yourself?

I don't know how to operate an online business, an e-commerce brand. I wouldn't know where to start. That's not what I do, but I do know M &A. I've been doing it for 25 years. So if I wanted to operate a business, I would work with someone or partner with someone to do it.

And I think the same with vice versa. would urge people to find advisors. And the problem, at the smaller end is there's a lot of average advisors because frankly, the deal fees aren't that attractive compared to bigger deals.

It's hard, it's hard to find really good advice if you're doing a $2 million acquisition.

I agree. Somebody that's got runs on the board and can show it as well. You mentioned before we got on air a couple of things. I want to talk about the relationship building process that you help sellers understand, which is critical for buyers as well. I call it a relationship building process. You have instruction in three different ways. Before we get to that though, I wanted to ask about Morgan Stanley. You said to me that they're one of the best M&A advisory companies in the world, why would you say that is true?

Morgan Stanley, Goldman Sachs, JP Morgan would probably be the top three firms. That's based on evidence of the quantum of any deals that they do each year. And for the last 10 or 20 years, 30 years, I've done investment banking for 25 years. If you look at the lead, they're called league tables. So how many deals, how many by sector, by geography, Morgan Stanley is always up there.

Cool, all right. Now let's move to the relationship building. You mentioned there's like a three stage process that you share with people that people should go through. I'm big on the most valuable part, typically. One of the most valuable parts of a deal is the relationship that you have with the buyer or the seller. So yeah, I'd love for you to share your three stage process and how people move into building that relationship.

This is really important in deal making. just for your listeners in the offline world, if we look at marriages of men and women or others, and there's a three step process of flirt, date and marry. You can't go straight to marriage or you maybe in some cases you might be forced, but you shouldn't go straight to marriage. Real, real strong relationships take time. When we're acting for a seller to give that lens, we want to start flirting with potential prospects, even as far out as three years away from the deal.

Especially larger acquirers that take a long time, to sort of get on the radar, convince internally that it's worth looking at, et cetera. So flirting is a process where we put sellers in front of buyers, not necessarily disclosing the full P and L and all of all the sort of sensitive details about a business, but at least sort of showing what's, what's being built and sort of saying this, this will come to market in one, two, three years. it of interest?

So on the buyer side, if I was looking to buy, would be saying, I would be pitching to prospects that I think are interesting targets really early on. They might be too small. might not hit the thresholds that you want now, but start building the relationship. So that's the flirt stage.

The dating stage is when you start to of narrow down the number of prospects that you're working with. That's when you sort of, lift, so on the seller side, you lift the kimono a little bit. You start to disclose a little bit more information.

about the business, maybe show the profit and loss, the financial statements. And from the buyer perspective, you've earned the trust with the prospects, you've done a bit of flirting, you've shown that you're a mature buyer, you're a serious buyer, you've got financial backing, then you deserve to ask the right for more information, for more diligence. Not a full data room, et cetera, but a little bit more diligence. You need to continue to earn the right.

or earn the respect of the seller, build chemistry to your point about relationships. So you're dating now, right? And you're having multiple dates. And from a seller perspective, if they're doing the job well, they're having several dates. They're looking to sort of see who they get on with. It's their baby they've built. They want it to go into good hands. So you've got to be the parent, the mature parent that's going to take on their baby and help it grow to the next stage. So really critical stage. Ultimately marriage is then when post-letter of intent.

There's an exclusivity period. There's like, you know, X weeks or months of diligence, and that leads to a marriage. and the marriage, you know, just when you go up the altar and get married, that's day one of the marriage, right? There's usually an earn out and post deal acquisition deferred, consideration. So it's important that marriage lasts. search for the seller. They want to get more consideration for the buyer. Obviously, you know, you want to leverage the IP, the advice of the seller to continue.

And maybe the seller stays on for X period. So it's really important that the marriage continues to last. And then ultimately, the buyer who's just bought the brand will probably go through the same process just on the other side. They'll be the seller and they'll need to flirt, date, marry to find buyers.

Yeah, I love that. It's so important to have a good solid relationship and trust in the person that you're selling your business to or the person that you're buying the business off. When you talk about the dating and I mean the flirting is fun.

all that sort of stuff, but the dating, starts to get a little bit more serious, right? Where you go, how, as a, as a buyer, how do I become an attractive buyer? And you talk about earning trust and respect and how does a buyer do that? Like what, know, of the best buyers that you've seen, that you've sold businesses to, what, what are the things that they do to really earn that trust and showcase that they're a value, a person of value to build a relationship with?

Yeah. I think there's real low hanging fruit for your listeners. In &A, we just think that the seller has to produce a deck or a SIM, a confidential information to the buyer. But good buyers are also pitching to sellers. So if I was looking to buy a business, even if it was for, you know, 5 million bucks, I'd be present, I'd be doing a comprehensive deck that explains why I'm a good buyer. So like what obvious things that should include, you know, the CV of the buyer, if they've done any other deals as successful they've been.

Testimonials from people that bought businesses from your high level vision for the business. know, things like that. that you're actually, you're turning up to the table as a serious buyer. That's what a lot of the very large buyers do, but at the smaller level, I don't see it at all.

It's rare. It's something that I teach in my courses is how to become an attractive buyer and what are the things that you can do. And especially if you're getting finance, say buying a seven figure brand, you need to have a buyer profile for the lenders to showcase that you're somebody that can take over this business and grow it, have a growth plan. And that you got experience for as well, which is you just use the same thing to send to and share with.

A seller once you're amongst the group of pool of buyers, it's looking at them looking at your resume, right? Which is pretty critical to make sure that you can showcase that you're the right person that's going to be able to take this on.

And, you know, show that you've got the team around you or the various different advisors or agencies to attack the growth opportunity. Like, that you show to lenders generally can be pretty stale and boring and backward looking. That doesn't excite me as a seller, to be honest. I you've got to show me the forward story. Like, what are the five things you're going to do when you buy this brand? Like, and how are you going to do it? It's easy to say what you're going to do, but how are you going to do it? And prove to me that you're the guy or girl to actually execute efficiently.

Like that starts to get into really interesting discussion.

Yeah, absolutely. want to chat about financing at the eight to what's eight figure range that you're in up to getting into the nine figures. What sort of funding structures do you actually use?

Typically there's like three types of buyers that we would work with. Strategics are corporates, private equity firms and aggregators. So, strategics are financing deals off their balance sheets typically. They're larger corporates or larger competitors looking to acquire a smaller firm.

Private equity firms go out and raise money from their LPs, their unlimited partners to give them the firepower to do deals. And aggregators, of which there's both FBA, Amazon FBA aggregators, DTC aggregators and SaaS aggregators,

You know, they, also go out and raise money, a mixture of equity and credit to give them the firepower to do deals. So it's, it's, it's, there are, there's another type of buyer. So those three types of buyers are more, they raise a pool of money to go do multiple deals. And there is a category of buyer called a search fund, which is more of a case by case deal by deal basis, more similar probably to your listeners where a proven entrepreneur is part of a search fund. He or she goes out and searches for a great business they want to buy.

And then they go back to their backers and raise the money to do the deal. So like that's, it's probably very different to, to, your typical listeners who go out and, you know, probably seek a bank loan or other form of financing on a, on a case by case basis.

Yeah, definitely more like institutional finance. sounds like you can, yeah, you can, you can work that way. And so do you, do you have like, sort of the average size, like seller notes, equity rollover, I there's earn ounce, but is it more so seller notes and equity rollover at this range? what's the average percentage?

Yeah, like there is, there are nets. An ideal mainly in e-commerce brands, Jaryd, and like, the structure of deals has changed. Like December, 2021 was, the sort of utopia was the peak time, right? And in some cases you might be able to get a hundred percent of consideration upfront. In some cases back then, it doesn't, it doesn't happen. The amount of upfront.

Today could be anywhere between 60 to 80%. And the balance is obviously deferred. Deferred can be in various ways. For some smaller businesses, there might be a hold back amount depending on hitting a certain milestone of revenue or there being no issues on supply chain or other items.

I think like certainly the aggregators made big mistakes in the early days by thinking they didn't need to keep on the management. why would you, they're the brains of the business. Like private equity have always really kept on.

The people that ran the business. so most smart buyers want to keep on the key people, at least for a period of time and incentivize them. And that can be in the form of a rollover of equity into new co or it can be earn ads or other forms. The problem with earn ads is they were designed by buyers for buyers. Let's be really honest. They're not designed for sellers at all. Most of them a lot of them go to litigation.

So from a seller perspective, I'm really wary of that when we're revising sellers. It's great for buyers. So from a seller perspective and negotiation perspective, I'd always like to see it based on revenue or something high up the P &L, not EBITDA or Net Profit, because that can be manipulated and there can be huge debates and arbitration and all that sort of stuff. And, you know, that kills a marriage. That's divorce territory. So, you you don't want to get into that. The devil's in the detail there, but

And there's so many details that you can get into with like, it's, would be wrong for me to just say, well, if you're going to do performance based earn out and you can do on revenue, what percentage of fluctuation in revenue do you allow for? And it's going to be dependent on the business. And then it's also dependent on the size of the deal. There's so many little details. It's the same with equity rollover. It's like not like our one size fits all approach of like, there's an equity rollover of five, 10 % when you hit.

key revenue metrics or whatever it is, right? It's dependent on the business and then the two parties on where they would like to meet, right?

Absolutely. And the thing is like, it's also hugely dependent on how much investment of money and time will go in by the buyer. The buyer may say they'll invest X and Y, but they don't, they do 50 % of that. then, know, massive impact on the business and the seller can't control that.

The buyer may just move the goalpost and say, look, they've had issues with their portfolio or they haven't been able to get as much funding, whatever it is. And so the seller's left high and dry. So yeah, it's really tricky. It's really tricky to get the right deal terms that are win-win. And I always think the best deals are win-win for both sides, ultimately.

Because the buyer wants a really good case study and testimonial from the seller ultimately, that they genuinely were happy with the sale and got paid the earn out. That's a much better case study. The sale done. then there was this litigation, like that's not a case study anymore. I think it's in the interest of buyers to actually pay out these earnets. And a lot of people wouldn't say that, but I think it is in the longer term because you want integrity. What goes around comes around.

sure. Like if you want to be, if you're an aggregator and you're not paying out, you know, your earn outs, what are you even doing? Like, of course you're going to crash and burn like, and nobody's going to sell to you. Like, there's this really bad signal to the market and the advisors in this space, we know who's trying to do tricks and who's not paying out. That doesn't help. We wouldn't bring deals then to those sorts of people.

Yeah, absolutely. I mean, it's just not good for your clients to not be paid what they've built for all over the, for the, these years. And you said, you know, the best deals are typically win-wins. think the only deals, only a deal should only happen if it's a win-win and everybody gets what they have put down on paper in the long run.

What part of your job and what are some of the things you do, because I know that this is a part of my role as well as an advisor on the buyer side, is getting people on the same team at times of frustration or deal fatigue. What are some of the things that you do to have people meet in the middle to make sure you can both, both parties can see it as a win-win and feel it as a win-win to make the deal happen?

Yeah, like great question. And I don't think there's any easy answer.

It's not like a one size fits all I think it's like the sales process, the general sales process where actually, you know, the key part of getting a sale across the line is discovery, right? This, you know, one of the earliest ages. you've got it. You've got to like ask questions at both sides early on, like, what's the strategic financial operation rationale for doing the deal? Like, you always start with strategic. You don't go to financial, right? So strategically, why do you want to do the deal from a buyer perspective? If they're strong in Europe, do they want a U S assets or if they're strong in say, DTC Shopify, do they want an Amazon FBA angle? So what's the real strategic rationale of doing the deal? That's where I spend the most time. That's where like it's worth having dinners or social occasions or informal online discussions about that before you get into everything else. And in a lot of cases, even the very big deals, like the CEOs or the presidents of companies have been chatting for years before the deal.

And they're having those sorts of conversations. And then they effectively shake hands on the rationale and let others work out the detail. like from the top down, then it's obvious as to why this is happening. And people then make it happen in terms of dotting the Is, crossing the Ts. And that may sound simplistic, but I think there's a lot there.

In terms then of like getting into more detailed financials and terms, I think it's by being upfront. Like I sold part of one of my own businesses in October. I sold a conference business at the conference division of a data company that I own. And if I looked there, was, started discussions in February. We sold it in October, 2025. So the discussions were slow at the start, but there was always intent.

They came to see the conference to sort of get a feel for it. They saw that it was a successful, you know, good branded conference. And then, and then we started to hone in on. there's strategic ration. was always, always there and it was good intent.

I'm rambling a little bit now, but I think, I think it's sort of, yeah, start, start strategic and, and then see if there's chemistry and, from a discovery perspective, ask all the questions early on, you know, and maybe talk about ranges. Like here's roughly the valuation range or this is roughly the deal structure. Like are we aligned or not before we waste three months and then come up with a potential, a of a bulk act, you know, that's just wasting everyone's time.

Yeah. And just money's being put into a deal where you just, you've got a lot of sunk costs and you're like, well that's just a kick in the pants for getting to a term sheet that is like not fair for everybody. So, you know, what I hear you talk about is network relationships and talking to a lot of people on both sides, right? Like years in advance, how does one who is looking at buying a business or selling a business, like for example, in your, you're, you've got the network, but for somebody that's looking at buying say business like you just sold in, you know, 2025, it took you what a six to nine months.

How many months was that? And then you sold in October. Where should buy or sellers and buyers be going to have these discussions? Like as a buyer, would you be just reaching out to businesses that are strategically aligned and sort of seeing where they're at and mentioning, Hey, this is where I'm at financially.

Yeah.

This is, want to know if you're interested in an exit and if so, would you be in the ballpark of what I have to offer? Those sorts of discussions.

I think at the bigger level, sellers and buyers typically go to advisors. again, just for arguments, could be the most quantitative by a business. You may have some conversations with the CEO, but then he'd probably bring in an investment bank like Morgan Stanley to of make it happen. On the seller side, typically there'd be a competitive auction process run by an investment bank and they go out to all the potential acquirers.

And if you're looking to acquire a smaller business and you don't know who they are, they're not in your direct roller decks. I'd always start with data. I'd be crunching data. Well, you can go, there are some websites, as I'm sure you know, that you can go to sort of see businesses for sale, but I'd be crunching data. So let's just say for argument's sake, you're looking at an e-commerce brand. I'll be trying to crunch data to figure out which, which category do I want to invest in? So you need to, you need to a category that's growing. during COVID, outdoor garden furniture was growing.

Yeah, but that all decreased significantly after COVID. So timing is everything in business, right? So right now, what category of e-commerce brand is interesting to acquire? Beauty and pets would be two obvious ones that I would look at. Within that, what are the subcategories? There's so many subcategories. So you need to figure out, do you want to acquire a beauty business? I don't know, that wouldn't naturally be my type of, my cup of tea, so to speak. I'd probably prefer maybe a pet something business, just…

You know, cause it would feel like I could get behind it. So crunch the data. You got it. Like don't make it, don't make it hard for yourself. Go to somewhere where there's a macro growth sector growth and brand growth. and, and then start to find, identify the breakout brands within that sort of pet supplement category, if you will, and then start reaching out or craft the story as to why you're the person to go and make that deal happen.

Could be, I've always loved putting advisory panels together for all my companies. So if you want to acquire a pet supplement business, why not get like two to three folks who've built and sold pet supplement businesses to be on your advisory team. And then, then when you go and pitch to the entrepreneur, you go like, okay, I'm leading the deal and look who I've got on my team, who's been there, done that. That starts to feel convincing, you know, going back to the whole, you got to pitch for the deal.

Yeah. When you've got maybe two or three people that have taken a supplement brand from 10 million revenue to 60 million revenue. They've done it once or twice or three of them individually have done it themselves. It becomes quite attractive to see like, okay, these guys are not just here to have a crack. They're going to give it a good nudge. I would also add to that when in the search phase as well. And that's thanks, Emmett. Thanks for outlining that.

I would add to that in the search phase crunching data and looking at numbers. And like, once you go from big category to subcategory and also include like business model as well, maybe the business model, especially in the seven figure range, will the business model that you choose will allow you to see more about what sort of finance you could acquire based on what the multiple is for that type of business model in the market to add to that.

Just on that, Jaryd, I get really excited when I see businesses that have recurring revenue as an M&A guy. love that, You can get a multiple of revenue, not even that. It's a game changer. So yes, it also provides certainty of cashflow for the buyer, et cetera, easier to get a loan on, cetera. You'd probably have to pay up more, but you can get more on the other side. There's valuation arbitrage there, because as you grow that type of business, you earn the right to get a higher multiple.

You may have to pay high to get in, you've got a little kind of increase as it grows, as you can prove it grows. So yeah, business models, key revenue.

It's a good discussion because it depends on the individual. I would prefer a lot of my clients to go for a recurring revenue business model, SaaS membership. Like say a dog training membership business, digital training. It's just such a great business model. The multiples being higher, it restricts them finance-wise and they want to go for higher cashflow faster.

And so it's the game that they want to play of like, you want to just take a little bit, go a little bit slower or do you want to go faster and everybody's got different risk tolerance. And I'm with you though, being in this space for such a long period of time, those are the premium business models for sure. I wanted to ask about entrepreneurs moving from the chair of being an entrepreneur and or working in the business as an operator to being an owner or a capital allocator when building your business and then moving into building a portfolio of businesses.

Do you have any advice for people on how to remove themselves out of their business? That's been a big challenge for myself. It's removing myself out of my business until I realized I wanted to pour more of myself into my business in just the things that I like.

You mean like, sort of remove yourself from the day to day so others can run the day.

Yeah. Yeah. From going from like working in your business to being an owner and having operators do the operations. Yeah.

Yeah, well, there's that great phrase that like the best entrepreneurs work on the business, not in the business. Working on thinking strategically. Yeah. I think, well, you need trust that you've got good people. You need good delegation and you need to become more, yeah, of a visionary, a leader. But it's probably easier. So I went from an investment banker to being a four-time entrepreneur.

So when I was in Morgan Stanley, know, there'd be a Mercedes to pick me up at nine o'clock. You'd get a free dinner at work. You'd have an amazing IT staff to fix everything. So I had, and the business card, could, anyone would respond to my email with Morgan Stanley on it. So I went from that to like startups where I had no resource. You know, was all, you know, a Jaryd of all trades. I to do all the work. But over time, like for two of my businesses now, I'm chairman. There's teams that run it day to day. I still am very much plugged in, but at a sort of a high board.

high-level board level. I'm thinking about working on the business, not in the business. I think it takes time. It's hard. It's hard to sort of say, right, tomorrow, I'm not going to do the day today because you you've got to, you've got to build up trust in your lieutenants and your deputies. That takes time. You've got to mentor them.

Yeah, you've got to build the systems for them to run as well. Like reverse engineer how you're doing the work and build that into a system that somebody else can take over and produce the same result if not better for sure.

But if you don't do that, then you run out of the headspace to think strategically and to think about what deals you might want to get done. Raising funding is like a day job on top of the day job, right? So like if you want acquisition finance or funding to grow, you know, you're going to need some headspace. It's incredibly time consuming.

It is. Operations is incredibly time consuming. Getting finance is incredibly time consuming, but that's a growth strategy. You're working on the business to get more finance. It's more about what people, believe, is so valuable for people is to remove themselves from the business as much as possible to have thinking time. It's, think, Keith Cunningham, who writes the book, The Road Less.

stupid, I think, the road less travel or something like that. He talks about thinking time and how can he set out time out of his business, to just think about the business and what needs to be done to grow it and giving yourself what you call this is the headspace. So yeah.

I'd also again, to go back on, you know, leverage the concept of an advisory panel. Don't try and think you've got to do everything right. Network with like-minded entrepreneurs or create an advisory panel of people who've been there, done that. Like find someone who's semi-retired, who's like bored playing golf, who would love to be intellectually stimulated to help a younger version of him or her who succeed and give them share options or whatever it might be. Like there's loads of those people out there that don't be shy to ask.

Yeah, I know there's even people that are happy to do boards, know, be on an advisory board for free for experience as well. How would you go if you were to go and set up your own advisory board, like when you first started, what would you do to set that up? How would you go?

I've done it three or four times now. I literally create a short list of people on LinkedIn that I think are like my dream candidates. And I started sending in-mails, you know, that's it really. You got to have a good pitch. Obviously you got to have, it's got to be relevant, but just got to reach out. Many years ago for my data business, I reached out to the, one of the former CTOs of Twitter and seeking to, for his advice on my data business, Eagle Alpha. He lives on the West coast and two weeks later he was here in Dublin drinking Guinness with me.

And so you just, just never, never know. You've to take your chance and leverage your network, obviously. But, but, if you in-mail at the right, in the right way, open to your advice or open to an advisory role. And if it's an interesting business with big ambition, know, they may well want to.

Yeah, I love that. And like you said before, doesn't need to, the money doesn't need to come first. It's more about having the discussion, building their relationship and then seeing, what would you need to be an advisor? Like what sort of incentive would you need to take on this role? And then can you provide that? And that can come secondary, right?

Absolutely. It can be share options or it can be, know, X, X dollars on, on exit or the next exit, whatever it might be. But it's about, again, it's about the strategic fit. It does it intellectually stimulate the individual and they'd be seen to add value on mentor. They sometimes lots of these people want to give back. Obviously there needs to be a financial encouragement, but it's more probably about giving back or you, having an angle that's different that they want to be part of and their roller decks of both business partners and potentially angels and other things could be amazing. But you know, start with the intellectual stimulation angle.

That's great. Emmett, thank you so much for your time. Where can we send people to find out more about what you're up to? I can put your LinkedIn there. What about the Forsher group?

Yeah, absolutely. The40yeargroup.com is my business that specializes in A of e-commerce brands. So yeah, if anyone wants to talk about an e-commerce brand acquisition, that's the place.

Awesome. And you're mostly on the cell side, right? For people thinking about.

Yeah, about 80, 90 % is sell side. Just because from an advisor perspective, more, more likelihood of deals getting done. If you're advising the seller, that's frankly it. But we do do selected buy side, advisory assignment.

Cool, awesome. Well, thanks so much. I'll put links to that guys, theforshagroup.com and then you got your LinkedIn there as well. But yeah, thanks so much for your time, Emmett. Really appreciate it.

Thanks for having me. Great chat.