Chris Miller

Thinking of buying a business with 13% EBITDA margins using an SBA 7a loan? Let’s do the math: SBA wants 1.25x DSCR (minimum) PE prefers 2.0x+ DSCR—because they actually care about margin of safety At 13% margins and 90% leverage, your debt payments will choke the business You’re one slow month away from default. This isn’t a spreadsheet game. It’s real cash, real payroll, and a personal guarantee. High leverage + low margins = you work for the lender. If you’re going to borrow big, buy fat-margin businesses—or don’t borrow at all.

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R&D Tax Breaks Set to Expand - Tuberville’s Bold Proposal On May 9, 2025, Senator Tommy Tuberville introduced the American Innovation and Jobs Act, aiming to revamp the R&D tax landscape for small businesses and startups. This bill proposes: 🟢 Restoring immediate full deductions for R&D expenses, reversing the 2017 Tax Cuts and Jobs Act's requirement to amortize these costs over several years. 🟢 Doubling the refundable R&D tax credit cap from $250,000 to $500,000 immediately, with plans to increase it to $750,000 over the next decade. 🟢 Expanding eligibility by raising the gross receipts threshold from $5 million to $15 million and extending the claim period from 5 to 8 years after generating at least $25,000 in revenue. As someone who has navigated the complexities of R&D tax credits, these changes could significantly ease the financial burden on innovative startups. The ability to fully deduct R&D expenses annually would provide immediate tax relief, encouraging more investment in innovation. This bipartisan effort, co-sponsored by over 30 senators, reflects a growing consensus on the importance of supporting domestic innovation. By enhancing these tax incentives, the U.S. aims to maintain its competitive edge in technology and innovation. What are your thoughts on these proposed changes? How might they impact your business or the broader innovation landscape? #TaxPolicy #Innovation #SmallBusiness #RDtaxcredit #AmericanInnovation #Startups #TaxReform

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In my latest client and partner memo, "Now Is The Time to Own The Essentials: A New Era in Private Equity", I shared why we believe the next decade will be defined by owning mission-critical, margin-expanding businesses - and why the time to act is now. Key takeaways: • Cheap leverage has gone - value creation will be driven by operational muscle, not multiple expansion. • Relocalization + digitalization + AI = the fourth industrial revolution & a massive opportunity to transform industrial champions. • Recent activity shows the strategy in action: - Chemelex carve-out ($1.7B) - Antylia Scientific acquisition ($1.3B) - A partnership to transform Barclays' payments arm - A structured debt investment in Spring Education Group, which provides critical social infrastructure. • Over the last 18 months, we have returned $10B+ to our investors, while building the deepest pipeline since 2009. I’m interested to know where you see the most compelling opportunities and welcome any comments so we can compare notes.   #PrivateEquity #OperationalExcellence #IndustrialTransformation #AI #DealFlow

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For decades, 401(k) participants have been limited to public market investments. Now, that’s beginning to change with the recent presidential executive order directing the DOL and SEC to evaluate opening 401(k) plans to alternative assets along with the Department of Labor’s decision to rescind a supplemental statement discouraging fiduciaries from considering alternatives in 401(k) retirement plans.   With these tailwinds, defined contribution plan participants will potentially be able to reap the benefits of the private markets long enjoyed by institutional investors and those who were part of defined benefit programs.   Access to private markets may lead to greater diversification within savers’ portfolios. This diversification can create resilience for varying market environments, potentially offering enhanced returns over the long term, and helping 401(k) participants build stronger and more secure retirements.   At Blue Owl Capital, we’re committed to expanding access to private assets. As retirement investing evolves, we’re proud to be leading the way by offering private market investment products for defined contribution retirement plans through our partnership with Voya Financial.

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We often get asked about financing for deals in the "dead zone." These are acquisitions that are too large or don't qualify for an SBA loan, but too small for a larger conventional lender. Zach Pavlosky, CFA, debt advisor at Cerebro Capital, shares insights on: ✅ How to understand and navigate the complex acquisition financing landscape. ✅ Why the $3–$5mm EBITDA “dead zone” is so tricky—and how to get deals funded there. ✅ The rise of SBICs as lead capital providers offering both debt and equity. ✅ What makes a deal “underwritable” today. ✅ Key risks, such as covenants and capital structure that can crush upside for equity investors. For searchers, SMB investors, independent sponsors, and capital partners—this episode is packed with practical insights on building a sustainable capital stack and funding deals that may require conventional acquisition financing. 🎥 Watch the full interview here → https://lnkd.in/eg6j4J3c Follow our podcast on Spotify and Apple Podcasts for more conversations on SMB investing and acquisition strategy. 🎧 Listen here: 🔹 Spotify → https://lnkd.in/ekqykR-P 🔹 Apple Podcasts → https://lnkd.in/eSHfpq8p

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What is the best way to set up a #CVC unit? Veteran #investor George Kellerman, managing director at Woven Capital, Toyota's Growth Fund, shares six tips to create a long-lasting #CVC unit, including hiring an outside team and setting up a #fund instead of relying on the #corporate balance sheet. Read the full story here: https://lnkd.in/d3nrXiW8 #startups #balancesheet #investment #portfolio #lp

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Chime has 8.6 million users and a brand that defines modern consumer fintech. But buried in its S-1 is a structural truth: Chime isn’t a bank. It’s a front-end built on two partner banks - Bancorp and Stride - that provide the charter, regulatory permissions, and balance sheet behind the scenes. For years, the story was that fintech led and banks followed. That narrative has flipped. Since 2022, rising rates and regulatory pressure have reshaped the fintech–partner bank relationship. Banks are no longer just enablers - but choosing partners based on how they improve internal financial metrics, and walking away from the ones that don’t. I wrote about this shift - and what it means for founders, investors, and the next wave of durable fintech. 👇 Full breakdown in the comments.

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One of the most impactful sessions from our recent REMIX conference was a workshop called “The Business of Building a Business” We walked through our actual 2024 P&L for Potomac highlighting how we break down the structure of our financials i.e. Wages, Expenses, and Owners Comp. We showed everyone how we set up our budget for each year. First you obviously must start out with some revenue assumptions which we typically will either use the most recent month or an average of the previous six months. For the wages and expenses, we increase the most impactful areas of the P&L with an eye on keeping the total to about 33% of revenue for each. Then we create three scenarios: -Conservative: No increase to revenue while keeping the increased expenses constant *not good -Moderate: 25% increase to revenue while keeping the increased expenses constant. -Aggressive: 40% increase to revenue while keeping the increased expenses constant. The key philosophy here is to make sure you abide by the “what is allocated will be spent” mantra. Pick a number you are comfortable with from an owner’s comp perspective and SPEND THE REST. Creating a budget is one of the most impactful exercise financial advisors can do to grow their business. I have a lot more to say. I should make this a blog…

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Did the recent SBA rule changes kill licensed trades deals? (e.g., HVAC, plumbing, electrical, etc.) That’s one of the most popular questions Drew Eckman has gotten at SMB Loan Support (SMBootcamp’s SBA loan advisory service) in the last few weeks from business buyers and SMBootcamp alumni. Drew wrote a quick, practical breakdown of how the new SBA SOP affects acquisitions of licensed trades businesses. The short answer is: these deals aren’t dead, but some popular structures (e.g., seller staying as a minority owner) likely aren’t viable anymore. If you are looking at licensed trades deals and wondering how to get a deal done under the new administration, you can get a full breakdown by downloading Drew’s write-up (linked in the comments below).

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📊 Fund finance is back in the spotlight. Haynes Boone Partners Holly Morgan Loftis and Brent Shultz share with PitchBook how fund finance can be a valuable tool during times of market uncertainty and what they’re seeing on the front lines. 🔗 Read the full article: https://lnkd.in/gkKPUdMu

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R/GA returns to private ownership in Truelink Capital deal. R/GA’s global CEO Robin Forbes and chair and global chief creative officer Tiffany Rolfe (she/her) are among the senior leaders investing in the company. Truelink Capital is injecting $50m into an innovation fund to expand R/GA’s capabilities. The investment will support talent development, acquisitions, and new AI-driven tools and platforms. Luke Myers, co-founder and managing partner at Truelink, said the investment aligns with R/GA’s strengths. “R/GA is built to help clients capitalize on new opportunities. We’re excited to support its leadership team,” he noted. Houlihan Lokey and Morgan Stanley advised on the deal, while Willkie Farr & Gallagher LLP provided legal counsel to IPG and R/GA. Read more: https://lnkd.in/d9EZhjGG #PEInsights #privateequity #investment #innovation

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