A $260k Down Payment on an SBA Loan Turned Into an Eight-Figure Exit
Jerod Pierce financed his way through Harvard Business School after a childhood spent in foster care, and it was there he first learned about buying an existing business instead of starting one. In November 2017, he acted on it.
The financing structure
As detailed on the podcast, Pierce bought Mercurios, an HVAC business doing $3.5 million in revenue and $500,000 in seller's discretionary earnings, for $1.75 million. The capital stack was almost entirely debt and personal cash: 75% SBA financing, 10% seller note, and 15% equity, about $260,000 of his own money, raised by selling a house he'd been renting out rooms in.
He deliberately skipped outside investors. His reasoning: raising equity for a self-funded search is expensive, since it costs you ownership on every dollar for the life of the deal, not just at closing.
What actually drove the outcome
Over five years, Mercurios grew from $3.5 million to $35 million in revenue, and its EBITDA went from $500,000 to over $6 million. Pierce attributes this to three specific things he did personally, not to market conditions alone:
He brought marketing in-house instead of paying an agency, so the full budget (which grew from $38,000 a year to $1.4 million) went directly to ads rather than management fees. He learned to sell by shadowing the previous owner on client calls for 60 days before running sales calls himself. And he was physically present in the business constantly, describing himself as one of the first in and one of the last out, most days, for years.
In October 2022, near the peak of private-equity interest in HVAC roll-ups, he sold the business in a deal that landed close to $95 million, taking 80% in cash and rolling 20% into equity, and shared more than $2 million of the proceeds with his employees.
Pierce is candid that timing helped: he bought HVAC before private equity discovered the space. But he's just as clear that a $6 million EBITDA business was always going to produce an eight-figure exit, tailwind or not.
Lessons for the buyer
- A modest personal check plus SBA debt can fund a real acquisition. Pierce's entire equity contribution was $260,000, financed almost entirely with an SBA loan and a seller note, not outside capital.
- Skipping outside equity has a real cost-benefit tradeoff. It's slower to assemble and puts more personal risk on you, but every dollar of growth stays yours instead of being shared with investors from day one.
- The specific skills you personally bring in matter more than the deal terms. Marketing and sales were the two capabilities Pierce prioritized learning himself, deliberately choosing the highest-leverage, lowest-technical-barrier skills rather than trying to become an HVAC technician.
- Owner presence is not optional in the first years. Pierce is explicit that a later acquisition of his stalled specifically because he wasn't as present, the same discipline that built Mercurios wasn't there the second time.