Uncle Ebb's Missed Opportunity

A story about how Codie Sanchez got into micro PE after seeing her uncle inefficiently close down his profitable plumbing business.

"My uncle Ebb had a $5 million business doing about $2-3 million in profit. He was in his 70s, grew up in a sharecropping family, and didn't know anything about the business world. When he came to retire, he didn't know anything about M&A, so instead of selling the company, he basically just wound it down. He took a company that had $2-3 million in profit and just let everybody go.

I thought that was a real waste, and we realized there's actually a business model here - it's called PE. I'd been doing it for 12 years at Goldman, Vanguard, and State Street. Why not apply this to these micro-sized businesses, anything below 3 mil? Instead of making money for other people, we could make money for ourselves.

We ended up taking an offshoot of Ebb Homes Plumbing in Phoenix, bought another plumbing company, rolled it in, and sold that one. Now we own laundromats, a podcast production company, lawn care businesses, and professional services in the cleaning space. Most of the time I don't operate any of them - there's somebody else that's an operator or we place somebody in the business."