Podcast Summary: Acquiring Minds

Episode: Timing is Everything: Buying a $30m Tutoring Business

Host: Will Smith
Guests: Jared Leonard (CEO, Buyer) & Dave Surowitz (Founder, Seller), Grade Potential Tutoring
Date: November 3, 2025

Overview

In this episode, Will Smith explores the rarely-heard perspective of a seller in business acquisition by hosting both sides of a major tutoring business transaction: buyer Jared Leonard and seller Dave Surowitz. The conversation traces their backgrounds, how the deal came together, their motivations and challenges, the mechanics of a competitive sale process, the transition experience, and what it truly takes to buy and lead a $30 million in-person tutoring company in the evolving education market.

Key Discussion Points & Insights

1. Meet the Guests: Backgrounds and Paths to Acquisition

• Jared Leonard:

  • South Florida native, UChicago undergrad, with a background in trading and finance.
  • Life-changing bike accident led to business school at UVA Darden.
  • Discovered the search fund model at Darden; attracted to entrepreneurship through acquisition.
  • Chose Search Fund Accelerator (SFA) model for close investor alignment and operational support.
    “If you look at the traditional model, right, they're backing 30, 40 people a year... As the asset, as the searcher, it was very clear to me the incentive alignment with SFA is second to none.” — Jared (13:45)

• Dave Surowitz:

  • Founded the company in 2002, inspired by his own frustrations finding a tutor in college.
  • Built Grade Potential into the largest in-person tutoring agency in the U.S. — now across 40+ states, $30M+ revenue.
  • Began considering a sale not for retirement, but to focus energy on new ventures after nearly two decades (“I was ready to work on new problems.”)
    “I started focusing more of my efforts and my day on the other business... just ready to move on.” — Dave (20:15)

2. The Seller’s Perspective and Emotional Journey

• Dave did not grow up expecting to sell his business; most in his family ran their companies for decades (19:04).
• Initial exploration of sale was prompted more by personal drivers than industry norms, such as engagement level and desire for new challenges.
• Early conversations with searchers were for “practice” and revealed his own unpreparedness around “business sales talk” and lack of formal financial training (27:47).
• The COVID-19 pandemic was a major inflection point; the business lost 85% of leads overnight but survived and later thrived, further influencing the timing of potential sale (21:09).
• Dave's openness and candor about the non-glamorous, gritty reality of selling and letting go:
  “Just a harder kick in the nuts every day, man.” — Dave, on running a $30M business (89:42)
  “You solve a problem, you just bump up against the next higher order problem... I never felt like, fantastic, we're just cruising now.” (91:48)

3. The Buyer's Search — Evolution and Lessons

• Jared began his search focused on utility vegetation management, utility services, and specialized B2B niches, then pivoted as he discovered his “searcher-company fit.”
• An important insight: start with what you can bring to the table as a replacement for the founder — skills, temperament, and vision.
  “You're stepping into the heartbeat and the smartest person in the business... survivor bias here: all the Daves who aren't brilliant went out of business.” — Jared (35:20)
• Realized his quantitative, financial, and digital acquisition skills matched the needs of the tutoring sector.
• Multiple attempts, timing, and perseverance were key. Jared emailed Dave five times before getting a response (40:06, 55:08).

4. The Sale Process: Challenges, Surprises, and "Positive Intent"

• Dave’s early sale process was messy due to self-designed financials, lack of standardization — required significant work to explain “the nuance” (45:41).
• Hired a specialized investment bank to prepare and mediate; found it invaluable for structuring, quality of earnings, and translation of business “gut knowledge” into buyer-ready form (44:34).
• The process was highly competitive:
  • 150+ possible buyers, 30+ calls, about 8 IOIs, including strategics, PE, and only one other searcher (56:04).
• Collaborative and open negotiations mattered. Jared leaned heavily into listening to what Dave wanted (“quick transition but orderly, significant equity rollover”), leading to a structure that worked for both (59:28).
• A memorable practice: “Assume positive intent.” They agreed to always talk directly if things got sticky—particularly as lawyers became involved:
  “If your lawyers say he's being an unreasonable jerk, call me and we'll talk about it.” — Jared (63:55)
  "It's not like you need to make their potential buyer assume positive intent... you need to, like, decide, can we in good faith both choose to have positive intent with this?" — Dave (64:16)

5. Motivation & Deal Structure

• Dave sought “enough money that if [everything went to hell], lifestyle wouldn't change,” but was equally motivated by speed, orderly transition, and meaningful equity rollover for a “second bite” (69:04–70:12).
• Private equity wanted a much longer handoff (“five years”); a searcher offered a faster, aligned transition (52:21).
• Genuine trust and good faith—especially as Dave was not a retiring seller—was key for Jared to get comfortable (“buy your business from someone incapable of lying”) (72:42).
• Jared bought trusting Dave’s character, even though all the "check-the-box" conventional search criteria weren't present (74:14).

6. The Business & Market: Why Grade Potential?

• Grade Potential is the largest in-person tutor matching business in the U.S.; reaches students from K to trades and professional exams (78:07, 86:51).
• Market tailwinds: post-COVID demand for in-person education, learning loss, and parental prioritization of tutoring (“mortgage, cheap dinner, tutoring, then everything else”).
• Company was growing 20-30% annually for three years after COVID (“every piece of evidence pointed to this business has been growing at an unbelievable clip”) (77:21).
• Many large competitors retreated into online; Grade Potential saw a Blue Ocean in the in-person space (85:01).

7. Post-Acquisition Transition & The Role of Skills

• Jared’s data-driven background informed changes in customer acquisition and yield optimization—building models for PPC, customer LTV, and pricing/leads (80:17).
• Early months were about “de-risking” (compliance, technology, new CFO, cleaning up legacy risks)—sometimes boring but vital (105:22).
• Dave rolled significant equity, remained on the board, and supported the business as it grew (“hopefully one plus one is more than two”) (105:56).
• Unexpected hurdles: bookkeeper quit suddenly during first month of closing books under new ownership (109:23).
• Broad support from SFA, including an active board and peer CEO community, proved invaluable to Jared’s leadership (111:25).

8. Seller’s Emotional and Ethical Burden

• Dave felt more anxiety about ensuring Jared’s and investors' post-sale success than about his own financial reward:

  “Now that other people’s money and other people’s futures were involved, that like, really feels, not heavy in a bad way, but feels like a lot of gravity with that. And, like, I felt, and still feel, significant responsibility to make sure I was giving Jared the most solid foundation I could.” (92:20).

• Discussion on seller fraud: Dave offered nuanced reflection on the line between highlighting vs. concealing downsides; Jared echoed the importance of character and transparency (96:33).

9. Notable Quotes & Moments

• On Seller Motivation:
  “I wanted to stop riding two horses with one ass... grade potential deserved more and I was not doing it justice.” — Dave (49:36, paraphrased)

• On the Value of Skill-Fit:
  “Start with what you can bring to a company... you have to replace the smartest person at the company probably, and the heartbeat of the business.” — Jared (35:20)

• On AI & The Human Element:
  “If you think what I call ChatGPTutor is not coming, you are dumb, liar, or both... In person matters, and it’s the 20% better that a human being is at tutoring your kid that matters to parents.” — Jared (82:23)

• On Ownership and Responsibility:
  “You solve a problem, you just bump up against the next higher order problem. Great, we solve that problem. Ah, we're getting here now. We're getting... yeah. So it's like I never felt like, fantastic, we're cruising now.” — Dave (91:48)

• On Passing the Baton:
  “My wife got me a literal baton that says ‘Grade Potential’ on it… Passing the baton, the closing picture is of me shaking hands with Dave, passing the baton.” — Jared (99:09)

Important Timestamps by Theme

• Jared’s Backstory & Accident: 6:16–7:58
• Dave’s Inspiration & Start: 8:10–9:53
• Decision to Sell / Seller Motivation: 19:04–20:15, 49:36–51:39
• COVID Impact: 21:06–22:50
• First Interactions with Searchers & Seller Skepticism: 23:30–27:05
• Preparation and Financials Complexity: 45:41–46:21
• The Investment Banker's Role: 44:34, 59:43
• Negotiation, Positive Intent: 59:28–68:25
• Why Not Retiring? Buyer’s Comfort with Non-Retirement Seller: 71:37–72:42
• Business Description & Market Fit: 75:03–78:07, 86:51–87:39
• Skill Fit & Optimization: 80:17–81:38
• AI’s Role and Future: 82:06–85:51
• Transition, Team, 'De-risking': 105:05–108:22
• Emotional Aftermath and Financial Relief: 91:38–94:21
• On Seller Fraud in the Industry: 94:55–98:29
• Closing Story & Passing the Baton: 99:00–99:43
• Post-Sale Board Relationship, SFA Support: 111:25–112:57
• Final Reflections / It’s Harder Than It Looks: 113:20–115:03

Memorable Moments

• “Deleted Email” That Launched the Deal:
  Dave almost deleted Jared’s persistent emails before signing on; a moment of mere politeness turned into a sale (55:08).
• Assume Positive Intent:
  Their explicit agreement to communicate openly if lawyers caused friction meaningfully “saved the deal two or three times” (63:33).
• Passing the Baton & UFC Belt:
  To mark the sale, Dave’s wife gave him a championship belt and a baton for Jared—a rare, light-hearted gesture (99:00).
• Seller Emotional Honesty:
  Dave’s open anxiety about post-sale responsibility and ethical ambiguity around disclosure in small business sales (92:20, 96:03).
• Seller on “Making It”:
  “People would ask me, 'When did you feel like you were making it?' I'm like, I'll let you know if and when…” (92:20)

Conclusion

This episode is a masterclass in the human dynamics of buying and selling a business—highlighting timing, alignment of motives, financial structures, post-close challenges, and the irreplaceable role of transparency and trust. Both guests reveal the pitfalls and exhilarations of acquisition entrepreneurship, culminating in practical advice:

• Align incentives and communication
• “Assume positive intent” and communicate directly during negotiations
• Know your “searcher-company fit” for post-acquisition success
• Prepare for a long, unpredictable journey—hiring, finance, and crises included
• Celebrate the wins, but recognize every summit leads to a new hill

“Running a company is really difficult. But is it worth it? Yeah, it’s awesome.” — Jared (115:03)

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