Question for you lower middle market guys - where do you go to find leadership for little portfolio companies?
I have line-of-sight to multiple (5-10) common acquisitions in rural areas. They're similar business models (blue collar - heavy industrial equipment new sales / parts / service) and while it's not a "roll-up" per se (not a ton of combination value in having them all under one roof - some shared services but that's about it), they can be bought very inexpensively and that might be enough to drive returns.
Only thing is, they're often in the middle of nowhere, and current management is the owner/manager and is aging out. I asked a few executive headhunters that I've worked with before and they basically said "sorry man, you're on your own." I'd love to get young talent in, but I'm finding most people interested in leading a rural business with sub-$1M EBITDA have set up a search fund so they can get a meaningful piece of the equity over time.
The third option is to promote, but looking around the room and entrusting a business to one of these folks makes me sweat. Some of these benches are pretty thin. I suppose you can help just about anyone to run a business if the playbook has enough structure, but that playbook isn't currently sitting in my back pocket. I can't interim, either - if I have to step in to any of these, then the model breaks.
Figured I'd ask the group - let me know what's worked (or hasn't worked) for you or if you have any ideas.