Oak Valley Capital

We are excited to announce our most recent acquisition - Stout Irragation & Landscape Lighting, headquartered in Atlanta GA, and serving the entire Atlanta metro for over 21 years. This opportunity was sourced by way of referral. By collaborating closely with the previous owners, we were able to successfully complete our due diligence quickly and with prudence - structuring a deal that aligned with the interests of both the previous owners and our investors. From start to finish, this sales process took 2.5 months. We sincerely appreciate the trust the previous owners placed in our team throughout the process, and we look forward to continuing our partnership with them. They will remain involved in operations for the next four months to ensure a smooth transition. If you’re interested in small business acquisitions or investing in an upcoming deal, please message us directly to learn more about our pipeline. Forrest Schwartz Joseph Luca

Today is day 75 of our “90 day work-up” in our most recent acquisition of GE Home Services. In efforts to provide a 10k foot view to those of you pursuing ownership and operation in the Home Service Industry, here are a few insights to consider post acquisition: The implementation of new systems and processes post-acquisition inevitably lead to short-term turbulence. Customer and employee attrition is a natural consequence of new ownership, not only due to new operational standards, but also due to a change of customer-technician-facing relationships. It's important to recognize that some customers and employees will resist new operational methods. Exercise discernment in deciding which customers and employees are worth the effort to integrate into the new way of operations - it’s unwise to jeopardize the majority to save a few. For every customer lost, there's the potential to gain ten more; similarly, every disengaged employee makes room for a new hire who is aligned with the new vision. Often, it's more effective to train fresh talent than to retrain those resistant to change. Furthermore, do your best to adhere to the principal of "hire slow, fire.” Establishing new standards—whether in pricing, quality of service, or culture—requires prompt action. Stay true to the mission you've set for your company and its employees, and protect this culture at all costs. Conversely, make every effort to retain your most valuable and loyal legacy customers and employees. When you identify an "A" player, compensate them accordingly and give them as much autonomy as possible. For loyal customers, go above and beyond to demonstrate respect through exceptional service, as with all customers. Even further, in-person meetings with these customers post-acquisition is necessary to retain their business. Trust is earned in drops and lost in buckets. Exercise prudence in this, as in all things. If you’re interested in small business acquisitions or investing in an upcoming deal, please message Joseph Luca to learn more about our pipeline.

Within every facet of private equity, managers and operators seek value-add opportunities; this is “Investing 101” — What can we do to increase revenues and decrease expenses/COGS? How one achieves this goal requires a high level of investment management and operational experience. The aim for operators should be to add value strategically and promptly. However, disruptions to this process are inevitable. Once a potential investment is identified you then move to the due diligence stage of the acquisition process. This is often where value-add opportunities specific to any given asset is found by way of financial analysis, market research, and due diligence questions posed to in-place business owner(s). When executed properly, this process assists in laying the groundwork to mapping out a unique value-add blueprint specific to the asset slated for acquisition. While this principle holds true for most investment endeavors, the following also holds true and is something all managers/operators must consider… The short-term aftermath of an acquisition often causes value erosion rather than value creation. In other words, in order to create value in any given asset, significant time and money must be invested into said asset with little to no returns for some time. (This sparks the topic of the importance of working capital. A topic for a later date). This brings us to the first 90 days post acquisition — a pivotal time in operations — it is imperative during these initial three months to have a broad to hyper-specific blueprint of SOPs for every role, process and overarching goals, supported by an adequately skilled team to execute on these implementations. The trajectory of the investment hinges on your team's ability to execute on this blueprint. So which value-add strategies take precedence in business acquisitions? It’s not uncommon to see operators having a narrow view of how to force appreciation. But, as previously mentioned, before pursuing “low hanging fruit” like customer acquisitions there are a number of operational strategies to standardize before said business can sustain such growth. Workforce restructuring, price adjustments, vendor relationships, and system implementations are just a few areas you can refine and fortify to add and support future value. Just keep in mind, opportunity cost applies to time, money, effort, and even emotional well-being — weighing the value of each strategy against its potential profits demands careful consideration. The OVC Team diligently assesses these strategies on a daily basis, implementing them with the primary objective of securing sustainable, long-term equity growth for our investors. If you are interested in small business acquisitions or investing in an upcoming deal, please message us directly to learn more about our pipeline.

We are excited to announce our latest acquisition: GE Home Services, an HVAC (heating, ventilation, and air conditioning) company headquartered in Phoenix, Arizona, and serving the entire Metropolitan area for over a decade! The OVC Team discovered this opportunity through direct marketing to the sellers. By collaborating closely with the previous owners, we were able to successfully complete our due diligence quickly and with prudence. This involved creatively structuring a deal that aligned with the interests of both the previous owners and our investors; from start to finish this process took 2.5 months. We sincerely appreciate the trust the previous owners placed in the OVC Team throughout the sale process and look forward to our continued partnership with them as they continue to run operations for the next 12 months to assist with a smooth transition of business. Lastly, we are excited to keep the GE Home Services legacy alive by serving it's loyal customers and growing its impeccable reputation for years to come. Congratulations to the sellers! If you are interested in small business acquisitions or investing in an upcoming deal, please message us directly to learn more about our pipeline.

There is an estimated 11,200 Baby Boomers per day turning 65 in 2024. By 2030, the entire Baby Boomer generation—one of the largest generational cohorts in the country’s history—will be at or beyond retirement age. According to the US Census Bureau, 51% (or approximately 16.25 million) small businesses are owned by Baby Boomers. Of these 16.25 million baby boomer business owners, approximately 1/3 (or 5.42 million) do not have an exit plan for when they retire. So what are the options for these retiring business owners? Sell, liquidate, or dissolve. Reality of Selling: It's the best option to secure the most value and stack retirement funds away well. Reality of Liquidating: Second to selling, but will only be able to secure a fraction of the business's value. Reality of Dissolving: The least favored of the three but unfortunately the most prevalent according to the SBA, with an estimated 1 in 12-15 small businesses never selling. OVC is in a fortunate position to provide value to these retiring baby boomers by acquiring the businesses they worked so hard to build over the last 30 years. These owners have been the backbone of our economy for the last 30 years, and now it's time for us to return the favor. We're in the business of buying small businesses! Please keep us in mind if you know someone who is considering selling their business. Lastly, if you're interested in small business acquisitions or investing with us in an upcoming deal, please message us directly to learn more about our pipeline.

Despite the uptick in popularity of Private Equity in recent years, it is not a new concept. This alternative investment space was pioneered by Henry Kravis, founder of KKR, in the 1970s, with notable professionals in this industry to follow such as Howard Marks at Oaktree Capital, David Rubenstein at the Carlyle Group, and Robert Smith at Vista Equity, to name a few. These firms have paved the way in identifying Main Street to Upper-Middle Market trends in every asset class imaginable, as well as inventing creative deal structures to offer the most value to the businesses they're acquiring/investing in and their shareholders. It is these men who built the industry of Private Equity and who are as active as ever before, that we stand on the shoulders of. Oak Valley Capital has a team of executives with a combined 35 years of experience in investment management and operations. Since founding OVC in January of 2023, we have acquired 3 businesses, with a 4th set to close in April 2024. We look forward to the continued teachings from these masters of PE and applying this knowledge to growing our portfolio on behalf of our investors for years to come. If you're interested in small business acquisitions or investing with us on an upcoming deal, please message us directly or visit our website to learn more about our pipeline.

Understanding the landscape of the industry you intend to invest in is a fundamental first step for any well-crafted business plan. At OVC, we employ specific tools for selecting a niche from the many industries presenting themselves as opportunities in the marketplace. Please see attached "Industry Matrix" below for insights into a few of the variables and questions we consider when determining which niche to focus our time and resources on before making any investment decisions. This Industry Matrix, while subjective, is the result of collective efforts from our team, who extensively research these industries. It assists us in narrowing our focus, ultimately guiding us to the small businesses we have been actively acquiring and growing since January 2023. What tools do you use, and what questions would you add to the matrix to help narrow down your SMB investment selection? Comment below! If you'd like a copy of our weighted "Industry Matrix" excel sheet, comment "MATRIX" below.

There’s approximately $1.3 trillion in Private Equity investor capital that needs allocating by end of 2025 or PE firms will be forced to send funds back to their investors. With so much dry powder at the ready, how is OVC competing as a small PE Firm in this competitive market? > We stay disciplined in our acquisition criteria. > We market directly to small business owners.? > Actively purchasing deals inside and outside of Arizona ( OVC headquarters). > We build trusting relationships with the business owners we purchase from. > We are consistently engaging with our immediate network?for "low-hanging fruit" opportunities. Our highly-focused acquisition criteria: > A minimum annual revenue of $5MM or a minimum SDE/EBITA of $750k. > Needs-based business model vs. wants based. > Recurring revenue vs. project-based revenue. > Industries:? *Home Services: HVAC, Electrical, Plumbing & Landscaping. > Location: AZ, GA, TX, UT, NV. Since OVC was founded in January 2023, we have successfully acquired 3 companies, with a 4th set to close in April. If you're interested in small business acquisitions or investing with us on an upcoming deal, please message us directly to learn more about our pipeline. If you would like a copy of our "Industries Matrix" excel model the OVC team developed please comment "DM me" on this post.

Story time: Over the next 20 years, as the "Baby Boomer" generation continues to retire and grow older, we will witness the effects of the largest transfer of wealth the world has ever seen, with an estimated 50% of the nations $156 trillion in assets being held by this generation. With respect to the small businesses "Baby Boomers" own, totaling a value of $7.9 trillion - What will happen to all of their businesses and attached value? SBA research shows "Baby Boomer" business owners without succession plans (an estimated 60%) are left with two likely scenarios to choose from when considering how and when they retire: Liquidate or Dissolve Using the most recent stats from the SBA, only 7% of the 32.5MM-33.3MM small businesses in the U.S. are generating only $1MM in revenue. This means most small businesses are not producing enough revenue to grab the attention of buyers wanting to step in as the new owner/operators. Consequently, only 1 out of every 12 small business owners considering selling actually end up selling. In other words, 11 out of 12 small business owners are left to either liquidate or dissolve, essentially erasing their life's hard work and what could have been additional retirement funds. The Silver Lining:? OVC is in a fortunate position to provide value to the market by acquiring these businesses "Baby Boomers" worked so diligently to build over the last 30 years. These owners have been the back-bone of our economy for the last 30 years, and now it's time for us to return the favor. We're in the business of buying small businesses! Please keep us in mind if you know someone who is considering selling their business. Lastly, if you're interested in small business acquisitions or investing with us in an upcoming deal, please message us directly to learn more about our pipeline.

We are in the business of buying small businesses. According to the SBA, as of 2021, there are 32.5 million small businesses (500 employees or less) in the US. This large pool of small businesses seems like plenty to choose from. However, of the 32.5 million small businesses in the U.S.: ? Only 7% (2,275,000) achieve $1 million in revenue. ? Only 17% of the 7% (380,500) achieve $5 million in revenue. ? And only 4% of the 7% (91,000) achieve $10 million in revenue. These stats put in perspective the number of viable businesses there are available to potentially acquire. What limits us at OVC even more is our very focused acquisition criteria. What size businesses do we at OVC focus on? ? A minimum annual revenue of $5MM or a minimum SDE/EBITDA of $750k. ? Needs-based business model vs. wants based. ? Recurring revenue vs. project-based revenue. ? Industries: ?* Home Services: HVAC, Electrical, Plumbing & Landscaping ? Location: GA, NC, SC, FL, AZ, TX, UT, NV. Since OVC was founded in January 2023, we have successfully acquired three companies within our wheelhouse. If you're interested in small business acquisitions or investing with us on an upcoming deal, please message us directly to learn more about our pipeline.