Buy it. Build it. Back it.™
The weekly guide for professionals who want to own something, with or without quitting the day job.
Hi Future Owner,
If you have a job, or recently left one, you have three ways to own something: buy a business, build one, or back someone else’s. This week is about the second door.
IN THIS ISSUE
Key points this week
How a refinery job and a fishing boat paid for the first Raising Cane’s.
More Americans are filing to start businesses, but SBA lenders are writing fewer, larger loans.
International search funds outnumbered new U.S. and Canadian funds for the first time.
Which Door First?
Buy it: Acquire an established business with existing customers and revenue. Best for people with management experience and capital/network who want to own and run their own company.
Build it: Build a business from scratch. Best for people who have identified and demonstrated customer demand that solves a problem and are willing and want to do everything themselves.
Back it: Invest in a business(s) acquired or operated by someone else. Best for people who want ownership without managing daily operations, or signing PG, or leaving your job.
This week: Build it.
BIG STORY
The $20 billion business that got the worst grade
At Louisiana State University, Todd Graves wrote a business plan for a restaurant that would sell only chicken fingers. It got the lowest grade in his class. His professor told him it would never work, and the bankers and investors he approached agreed.
Raising the money
He took a job as a boilermaker at an oil refinery in Los Angeles and put in 90-hour weeks.
When another boilermaker told him commercial fishing paid better, he headed to Bristol Bay, Alaska, and spent 20-hour days catching sockeye salmon.
He came home with his fishing money and paired it with an SBA loan.
The first restaurant
With his partner, Craig Silvey, he spent about $150,000 turning an old bike shop near the North Gates of LSU into a restaurant.
Friends and a few contractors helped with the work.
Raising Cane’s, named after his Labrador, opened on Aug. 28, 1996. Business was strong enough to keep the doors open until 3:30 a.m.
Where it is now
The menu stayed small, and the company kept nearly all of its restaurants in-house.
In 2025, Raising Cane’s had 913 U.S. restaurants, 891 of them company-owned, and $5.49 billion in U.S. sales, about $6.58 million per restaurant.
Forbes estimated in 2025 that Graves owns about 91% of the business.
The thing I keep coming back to: Graves started under the conditions I look for.
People already bought chicken fingers.
He knew the college town market inside and out.
He put in his own sweat and savings before he asked a lender for a dime.
He kept the first test cheap, with one location his friends helped him build.
I’ve started 5 businesses and acquired 29, and buying has worked out far more often for me. But when you have real product-market fit, you know the market cold, you have someone who can execute, and it won’t cost much to build, starting can be the right door.
KEY TAKEAWAYS
Start with a product people already buy, so you aren't spending your savings teaching the market.
Put your own money and time into the test before you ask a bank or an investor.
Keep the offer simple, because a short menu is much easier to repeat in a second location.
A steady paycheck is a good way to fund your first business.
The Best Place to Put $100,000 to Work
Here’s how $100,000 grows with annual compounding. Deal returns are based on a June 2026 Institute for Private Capital study covering 697 independent sponsor deals. The final column assumes a 20% stock market decline in the first year, followed by 6% annual returns.
After a 20% loss in the first year, the stock investor doesn't recover the original $100,000 until year five. Twenty years out, that one year still costs him about $79,000.
Note: Per the study, Deal returns are gross, not net. 23.5% of deals lost money. Selection and quality are important. The 10- and 20-year columns assume winnings go back into new deals at the same rate. The avg is much higher than the median because it includes outliers that also drive the returns, so to be in that group, diversification is important (i.e., power law ).
PLEASE - this is information, Not investment advice.
TOP 3 THIS WEEK
More people are filing to start businesses, but startup loans are harder to get.
Americans filed 147,331 high-propensity business applications in September, up 1.3% from August.
SBA 7(a) approvals for the fiscal year that ended Sept. 30 fell 28.1% to 56,130 loans, while dollar volume fell 13% to $32.43 billion. Lenders are writing fewer, larger loans, which tends to favor established businesses over startups.
SBA loans between $50,000 and $250,000 are capped at Prime plus 6 points. With WSJ Prime at 7.00%, that puts the ceiling at 13%, and you’ll need at least a 10% equity injection of your own.
International search funds outnumbered new U.S. and Canadian funds for the first time
IESE Business School’s latest study found 46 international acquisitions in 2025 and a record 96 new funds launched in 2024, across 48 countries.
Investor returns rose from 2.0x to 2.8x invested capital, and IRR rose from 18% to 30%. Search Funds in the USA have been a great return over the past 20 years. More on this in future newsletters.
73% of completed international searches ended in an acquisition, compared with 58% in the U.S. and Canada.
Searchers are confident they'll acquire a business. Yale will track the outcomes
A new Yale study follows 83 aspiring search fund entrepreneurs who plan to begin their searches in 2026.
On average, they put their odds of buying a company at 78%, with a median of 80%.
Researchers will follow up every quarter for two years to see whether participants' confidence translates into completed acquisitions as they navigate sellers, financing, and negotiations.
Historically, from the Stanford studies, it has been a success rate of appx 70%. And the growth in fundless or independent search is growing exponentially. More on that in the future, because this is where I live.
PERMANENT EQUITY PODCAST
I host a weekly show with people who:
left their jobs to buy a company, whether it worked or not
started one from scratch
stayed in their jobs and invested in someone else's deal
run funds in the ETA space that readers can invest in
Know someone with a story? Hit reply and tell me. Find me on Apple, Spotify, YouTube, or wherever you get your podcasts.
COMMUNITY SPOTLIGHT
Todd Graves worked in oil refineries and fished in Alaska to finance his first Raising Cane's
Todd Graves opened the first Raising Cane’s with little money, no management experience, and no collateral. He spent two years raising the initial capital, then used debt to finance expansion while retaining control of the company. Today, Graves estimates Raising Cane’s is worth more than $20 billion, and he still owns and controls it.
The search for cash: After banks turned him down, Graves flew to Anchorage, took a floatplane to King Salmon, hitchhiked to Naknek, and lived in a tent for a month while looking for work on a fishing crew.
The first round: He secured a $90,000 SBA loan and about $60,000 from early shareholders. He also did much of the restaurant renovation himself, including plumbing.
The growth: To expand without selling more shares, he took subordinated loans from private investors, including a $200,000 loan at 15% interest. Banks treated these loans as equity, allowing him to borrow more. Raising Cane’s grew from two restaurants to eight, opening five in five months.
The franchise test: Graves tried franchising but decided outside operators couldn't maintain company standards. He eventually bought back the franchised locations.
Today: Graves has turned down offers to sell the company. In his words, “If you create and do, you never want to stop creating and doing.”
"Majority equity is majority work."
RESOURCES & EVENTS
3 Things I Check Before Putting a Dollar Into Any Business (Michael Crow)
I examine three factors that influence success when acquiring or operating a business: selecting the right people, aligning incentives, and maintaining consistent processes. He draws on experience in real estate, plumbing, and HVAC businesses to show how poor leadership decisions can lead to financial losses. He also discusses evaluating partners under financial pressure, tracking three performance metrics per team, and maintaining sufficient cash reserves to withstand consecutive difficult months.
Small Business Expo Phoenix (Phoenix, Arizona - November 18, 2026)
The Phoenix Small Business Expo brings together small business owners, entrepreneurs, and service providers for a one-day conference at the Phoenix Convention Center. The event features workshops on marketing, financial management, and business growth, alongside an exhibitor hall and networking sessions. Attendees can meet potential partners, explore business services, and learn practical strategies for running and growing a small business.
Harvard Business School ETA Conference (Boston, Massachusetts - November 14, 2026)
Harvard Business School will host its 12th annual Entrepreneurship Through Acquisition Conference, bringing together nearly 1,000 searchers, operators, investors, advisors, and MBA students. Sessions will examine identifying and evaluating acquisition targets, raising capital, negotiating transactions, and managing businesses after closing. A networking reception is scheduled for November 13, followed by the main conference on November 14.
What's really stopping you from owning something?
INSIGHT OF THE WEEK
Michael Crow shares how his Harvard Business School experience shaped his approach to business ownership
I reflect on joining Harvard Business School’s three-year Owner/President Management program in 2001, when I was in my 30s. I already had experience in accounting, banking, consulting, and had closed over 12 acquisitions, with 9 wins, including 3 IPOS, and had 3 losses. I found that roughly 120 case studies with the top HBS professors over three years, while I was living in a dorm room and having small forum teams meeting every night, helped me better understand business outcomes, coming back to the original decisions that I had made without a real process. I am now using this experience as an alumnus at HBS, with my 30 years in YPO, to build the Owners Room, which will have a community of people with Forums and Networks, all dedicated to one of the 3 ways to own small businesses.
QUOTE OF THE WEEK
“Bear in mind that the measure of a man is the worth of the things he cares about.” - Marcus Aurelius
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