AI Creative Agency Rollup

Jesse proposes acquiring creative agencies and optimizing them with AI technology, then rolling up multiple agencies to create a larger, more valuable company through multiple arbitrage.

Key Points:

• Initial Strategy:

  • Buy a creative agency
  • Redo their processes with AI technology
  • Optimize operations and increase profitability

• Roll-up Strategy:

  • Once the AI optimization model is proven with first agency
  • Buy 10 more creative agencies
  • Apply the same AI optimization process
  • Consolidate them into one larger entity

• Value Creation:

  • Multiple arbitrage: Buy smaller agencies at lower multiples (4-5x EBITDA)
  • Grow and consolidate into larger entity
  • Sell at higher multiple (15x EBITDA) due to:
    • Increased scale
    • Better stability
    • Higher margins from AI optimization
    • Greater defensibility

• Benefits:

  • Create more profitable businesses through AI optimization
  • Better than venture path for many scenarios
  • Leverage multiple arbitrage for significant value creation
  • Maintain control as founder while scaling

The strategy combines the current AI trend with traditional private equity roll-up tactics to create outsized returns in the creative agency space.