Acquiring Minds Podcast Summary

Episode: When a $2.8m Acquisition Is More Like Zero-to-One

Date: November 26, 2025
Host: Will Smith
Guest: Dave Gilbert, Owner of Proven

Overview

This episode explores the journey of Dave Gilbert, who purchased a fractional CFO business, Proven, for $2.8 million and found himself dealing with undisclosed risks, an unexpected turnaround situation, and a business model that was structurally flawed. Unlike many acquisition horror stories rooted in fraud or misrepresentation, Dave’s experience deals with less obvious but equally challenging pitfalls: hidden customer concentration, a deeply entrenched family business, and a need to completely rethink operations and staffing. After two grueling years, Dave stabilized Proven, maintained revenue and EBITDA, and emerged with new views on SBA-backed business acquisitions—offering listeners a candid, insightful look at the realities of ETA (entrepreneurship through acquisition).

Key Discussion Points & Insights

Dave’s Background and Motivation (03:18–07:07)

• Dave’s tech background: Built a credit risk analytics company and worked in global cybersecurity.
• Why acquisition over startups: Not attracted to "growth at all costs;" prefers working for profitability and with “everyday people.”
  • “Why try and build what they [big startup founders] got lucky doing? ... Instead, skip straight to cash flowing businesses.” – Dave (07:00)
• Desire for privacy and meaningful, less high-profile work.
• Attraction to deal flow in ETA: Accounting/accounting-adjacent businesses prime for ongoing deal opportunities.

Search Process & Finding Proven (09:42–17:39)

• Reached out to ~120 owners over 1.5 years, focusing on personal, direct networking (13:30).
• Initially passed on Proven due to red flags (family involvement).
• Eventually reconsidered: “All deals have hair. ... You’ll never find the perfect business.” – Dave (17:39)

Deal Structure & Closing (18:34–24:44)

• Purchase price: $2.8M
• EBITDA: Expected $750K (turned out to be half)
• Revenue: $2.1M
• Financing: ~$500K equity raise (primarily through Twitter contacts), 15% seller note, SBA loan, $300K working capital buffer.
• “If you find a good deal, capital is easy to raise.” – Dave (21:51)
• Importance of working with multiple banks for better loan terms (19:29).

The Ugly Truth Post-Acquisition (25:46–38:01)

• EBITDA shortfall: First financials after closing showed negative profitability.
  • “We are $20,000 in the hole... EBITDA was about half of what we thought.” – Dave (25:48)
• Root causes:
  • Addbacks involved family being paid for actual work, not “excess” to remove.
  • Variable comp structure changed after closing—hard to diligence.
  • Badly hidden customer concentration: two “clients” were actually a single PE/family office relationship (about 23% of revenue lost quickly).
• High staff churn and need to completely rebuild operations, including letting go of almost all legacy staff (family included): “We had about 20 employees when we bought the company... We have two that are left.” – Dave (37:37)
• Restructuring challenges: Change was difficult for staff, especially family and those resistant to new processes.

Business Model Flaws & Operational Turnaround (39:02–51:51)

• Sellers’ vision: train up bookkeepers to become CFOs—unrealistic, as real client value is created by highly experienced execs.
• Dave rebuilt the company, focusing on hiring true “A player” fractional executives with 20+ years’ experience.
• Broadened services beyond fractional CFO: accounting, HR, deal and debt sourcing, quality of earnings.

Reflections on ETA, Due Diligence, and Family Businesses (52:09–56:51)

• No intentional fraud—just a business run for and by a family, with processes and models that were not scalable.
• Due diligence tips: Extra care needed when family is deeply involved and when team “credentials” might be overstated.
  • “Would I buy another company with a lot of family involved? Not sure I would.” – Dave (31:04)
• Look carefully at actual customer concentration, even when “on paper” concentration percentages seem fine.

Zero-to-One vs. ETA: The Unexpected Turnaround (56:51–61:29)

• The experience ended up being more “zero-to-one” (building from scratch) than buying a proven, cash-flowing business.
• Turnaround was harder than a startup in some ways—fewer support networks and more at risk with debt.
• Despite sleepless nights and heavy lifts, Dave stabilized revenue and EBITDA at pre-acquisition levels.
  • “Not genius—just luck and grinding through it.” – Dave (59:04)

SBA vs. Independent Sponsor Route (62:30–68:58)

• Post-experience, Dave now favors the independent sponsor (larger deals, more support, less personal risk) over SBA self-funded deals.
  • “With the extra equity you get comes the extra risk... The SBA is going to come for [your collateral] if you fail.” – Dave (67:18)
• SBA is more suitable for those early in life, with less to lose; bigger companies bring more stability and capacity to absorb mistakes.
• Tradeoff discussed: owning more but facing more risk (SBA), versus owning less of a bigger, safer business (independent sponsor).

Reevaluation of Blue-Collar vs. White-Collar Target Businesses (68:58–71:02)

• Dave is more open to blue-collar businesses now: operational skills are somewhat transferable.
• “Building one business doesn’t always translate to another... had to re-learn how value is created in this context.” – Dave (70:57)

The “Deal Flow” Thesis: Did It Pan Out? (71:05–72:12)

• Original goal was deal flow—accounting firm as a hub for future finds. Some evidence this works, but hasn’t led to actual completed follow-on acquisitions yet.

Final Thoughts, Lessons, and Positivity (72:12–73:51)

• Over-capitalizing on working capital was a crucial buffer.
• Despite setbacks, process was valuable for learning, resilience, and future deal evaluation.
  • “Just listening to a podcast or reading a book... you have to go through some of these on your own and come out the other side.” – Dave (73:10)

Notable Quotes & Memorable Moments

• On expectations and reality of buying “for cash flow”:
  • “A turnaround is a little bit harder... There’s so much you have to get right for it to be successful.” – Dave (56:51)
• On deal flaws:
  • “All deals have hair. It’s how much you can deal with.” – Dave (17:39)
• On due diligence:
  • “Diligencing every member of the team is... a lift, but the point is taken.” – Will (48:03)
• On leadership and tough decisions:
  • “You can either let that person go, or they’re going to drag down your five best people.” – Dave (59:49)
• On risk and SBA deals:
  • “With an independent sponsor, you’re not going to go bankrupt. With an SBA loan, you can lose everything.” – Dave (65:47)
• On working capital:
  • “I’d rather have it and not need it than want it and not get it.” – Dave (73:08)
• On lessons learned:
  • “Building one business doesn’t always translate into building another... had to re-learn how value is created in this context.” – Dave (70:57)

Timestamps for Key Segments

| Time | Topic | |----------|--------------------------------------------------------------------------------------| | 03:18 | Dave’s background and attraction to ETA | | 09:42 | Search strategy and narrowing focus to accounting | | 16:20 | Discovering and (eventually) buying Proven | | 18:34 | Acquisition price, deal structure, and fundraising | | 25:46 | Reality post-close: EBITDA shortfall, family add-backs, compensation mess | | 32:42 | Customer concentration risk and operational weaknesses | | 37:37 | Challenges of restructuring a family/staff-heavy business | | 39:02 | Rebuilding: Vision, operations, and tier-one hiring | | 52:09 | Due diligence reflections; family involvement red flags | | 56:51 | “Turnaround” vs. true ETA—harder than a startup? | | 61:29 | Tactics for retaining EBITDA/revenue: expense and revenue levers | | 62:30 | Rethinking SBA deals, independent sponsor route pros and cons | | 68:58 | Do blue-collar vs. white-collar skills transfer? | | 71:05 | Deal flow thesis—has it worked? | | 72:41 | Final reflections, working capital, and resilience |

Conclusion

Dave’s brutally honest journey from buying what seemed a “plain vanilla” cash-flowing business, only to end up in an extended zero-to-one turnaround, is packed with lessons for searchers and acquisition entrepreneurs. Key takeaways: due diligence—especially on family businesses and “add backs”—requires uncommon skepticism; company culture and talent are everything in people-intensive services; and the risk calculus of SBA deals vs. sponsor-led acquisitions may shift once you’ve “been through the wars.” Dave’s candor—and ultimate success in stabilizing Proven—offers both caution and inspiration for would-be ETA entrepreneurs.

Resources

• Proven: proven.co
• Contact Dave: dave@proven.co
• LinkedIn: Dave Gilbert
• Acquiring Minds Podcast: Website
• YouTube: Acquiring Minds Channel