Acquiring Minds Podcast Summary: "Reviving a Covid-Crushed Business: $0 to $6M in 3 Years"

Episode Information:

• Title: Reviving a Covid-Crushed Business: $0 to $6M in 3 Years
• Host: Will Smith
• Guest: Adam Rao, Owner of Triple 20
• Release Date: July 7, 2025

1. Introduction to Impact-Focused Entrepreneurship Through Acquisition (ETA)

Will Smith opens the episode by highlighting the evolving landscape of Entrepreneurship Through Acquisition (ETA), emphasizing the integration of social impact alongside financial goals. He references previous guests like Sarah Chiles, Matthew Ferguson, Chase Murdoch, John Mahoney, and Chris Fredericks, illustrating the diverse motivations behind acquisition entrepreneurship.

Notable Quote:

Will Smith [00:00]: "Today's guest is bringing impact to ETA."

2. Adam Rao’s Journey: From Nonprofits to Impact Companies

Adam Rao shares his decade-long experience in the nonprofit sector, expressing a desire to engage in impactful work while seeking the agility and control inherent in for-profit enterprises. This led him to explore impact companies—businesses that balance financial performance with social and environmental good.

Notable Quote:

Adam Rao [04:03]: "I like moving fast. I like being in control."

3. Discovery and Transition to ETA

After earning his MBA, Adam delves into ETA, influenced by Harvard Business Review articles. Initially self-funded, his search paused due to the COVID-19 pandemic. The unexpected challenges of the pandemic propelled him to partner with Silas Morgan, accelerating their search and culminating in the acquisition of Showcraft in September 2021.

Notable Quote:

Adam Rao [05:04]: "I decided to leave towards the end of 2019 to start a search."

4. Defining Impact: B Corps and General Benefit Corporations (GBCs)

Adam elaborates on the concepts of B Corporations and General Benefit Corporations, explaining their roles in ensuring businesses uphold both financial and social responsibilities. Triple 20, Adam's company, is a certified B Corp, aligning with industry leaders like Patagonia and Warby Parker.

Notable Quote:

Adam Rao [07:16]: "B Lab really does... you get a score on that assessment and if you're above 80, then you get the B Corp certification."

5. Acquisition of Showcraft: A Bold Move Amidst a Pandemic

Adam and Silas acquired Showcraft, an exhibit production company severely impacted by COVID-19, with no revenue for 15 months. Utilizing a 100% seller-financed deal, they minimized personal financial risk and structured payments to accommodate the uncertain recovery landscape.

Notable Quote:

Adam Rao [28:18]: "We purchased Showcraft for $1.2 million... with initial payments as interest only for up to three years."

6. Navigating the Challenges of a Covid-Impacted Business

Upon acquisition, they faced significant hurdles, including a demoralized team returning from furlough and operational uncertainties due to ongoing pandemic disruptions. Their proactive approach involved restructuring the team, improving company culture, and implementing strategic changes to revive the business.

Notable Quote:

Adam Rao [41:05]: "We are going to have to rebuild this thing not just in terms of revenue and clients, but we're gonna have to rebuild it in terms of attitude, mentality and customer centricity."

7. Refinancing and Financial Restructuring

As Showcraft struggled to meet revenue expectations, Adam and Silas renegotiated the seller debt, successfully reducing the acquisition price from $1.2 million to $780,000 through an SBA loan. This financial maneuver provided the necessary stability to pivot and revitalize the business.

Notable Quote:

Adam Rao [34:20]: "We bought the business for $780,000 plus whatever the interest was on $1.2 million for a couple of years."

8. Strategic Add-On Acquisition: Display Arts

In 2023, recognizing the need for diversification and stability, Adam and Silas acquired Display Arts, another trade show exhibit company similarly affected by COVID-19. This add-on acquisition allowed them to consolidate operations, reduce costs, and leverage Display Arts' healthier financials to support Showcraft's turnaround.

Notable Quote:

Adam Rao [52:38]: "We merged Display Arts in January 2023, which allowed us to accelerate our survival and start getting a little bit of stability."

9. Culture Transformation and Team Turnover

A critical factor in their success was transforming the company's culture. The initial turnover included letting go of all original Showcraft employees, a challenging decision that ultimately paved the way for a more cohesive and motivated team from Display Arts. This cultural overhaul was essential for fostering an environment conducive to growth and innovation.

Notable Quote:

Adam Rao [60:02]: "I inherited some very difficult people... but we ended up keeping most of the folks from Display Arts."

10. Achieving Success as Triple 20: Metrics and Growth

By early 2024, the merged entity, Triple 20, achieved significant milestones, including:

• Revenue Growth: From $0 to $6.4 million in three years.
• EBITDA Improvement: Reached $700,000, surpassing initial goals.
• B Corp Certification: Solidifying their commitment to social and environmental impact.
• Team Expansion: Maintaining a stable and motivated workforce from Display Arts.

Notable Quote:

Adam Rao [73:24]: "Our first six months are looking really, really good... We're on our way to becoming a million-dollar EBITDA company."

11. Future Vision: Expanding Impact Through HoldCo Strategy

Looking ahead, Adam and Silas are exploring the creation of a holding company structure to acquire and build additional impact-focused businesses. Their vision aims to integrate ETA with the impact company movement, leveraging their proven success to scale socially and environmentally responsible enterprises.

Notable Quote:

Adam Rao [76:28]: "We have an obligation and a responsibility to utilize what we've learned to create new impact companies that can be in that top 20% using acquisition as a strategy."

12. Commitment to B Corp Principles

Triple 20's operations are deeply embedded in B Corp principles, focusing on environmental sustainability, career development, and community engagement. The company prioritizes:

• Environmental Initiatives: Reducing waste in an industry known for high environmental impact.
• Talent Development: Partnering with educational institutions to foster career growth.
• Inclusive Practices: Ensuring all employees receive living wages and access to healthcare.

Notable Quote:

Adam Rao [78:07]: "Everyone in our company is paid a living wage. Everyone has access to health care."

Conclusion: Lessons Learned and Strategic Takeaways

Adam Rao and Silas Morgan’s journey underscores the importance of strategic financial structuring, cultural transformation, and maintaining a clear vision aligned with social impact. Their success with Triple 20 serves as a compelling case study for integrating impact into the ETA model, demonstrating that businesses can achieve substantial financial growth while adhering to principles of social and environmental responsibility.

Final Notable Quote:

Adam Rao [75:37]: "We want to be the first place that world-changing brands look to create the worlds in which their customers are going to walk into on a trade show floor and experience their products and their brands."

Key Takeaways:

• Impact Integration: Balancing financial objectives with social and environmental responsibilities can differentiate a business in a fragmented market.
• Flexible Financing: Utilizing seller financing and SBA loans can mitigate personal financial risk during acquisitions.
• Cultural Overhaul: Transforming company culture is pivotal for revitalizing a stagnant business.
• Strategic Acquisitions: Merging with similar businesses can stabilize operations and accelerate growth.
• B Corp Certification: Enhances brand reputation and aligns business practices with impactful goals.

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