Every managed services owner has a folder, real or mental, full of acquisition emails. They arrive at a rate of several a month, they are addressed to a first name pulled from a list, and they all say a version of the same thing: we would like to talk about your company. The reasonable response to a form letter is to ignore it, and most owners do. What gets lost in that reflex is that the emails are identical while the people behind them are not, and the difference between them matters enormously to an owner who will eventually need one of them to say yes. Some are institutional funds assembling a platform out of five companies at once. Some are strategic acquirers in an adjacent market. And some are a single person who has spent two years looking for one business to buy and run for the next fifteen. Telling them apart is not a courtesy you extend to a stranger. It is the same work as knowing your numbers before you decide to sell, scale, or pivot, because the buyer type determines what your company is worth, what happens to your people, and which weaknesses will surface in diligence. An owner who has never separated what a business is worth from what it earns is going to be surprised by that conversation, and an owner whose company still depends entirely on them is going to be surprised twice.
The more useful frame is that a buyer is a reader. Whatever else an acquisition process is, it is an outside party spending sixty to ninety days forming an opinion about how well your business has been run, and then pricing that opinion. The version of that opinion you would like them to reach is not produced during diligence. It is produced over years, in the ordinary decisions about whether to write the procedure down, whether to hire the person who insists on standards, whether to let a client ride at ninety days, whether to build a management layer that can operate without you. This is why exit readiness is a poor thing to treat as a project. It is not a phase that begins when you decide to sell. It is the accumulated residue of how the company was operated, and the buyer is simply the first person with a financial incentive to read it honestly. The owners who get a good outcome are almost never the ones who prepared well. They are the ones who ran the business in a way that happened to survive being read.
Josh Peterson put the number at dozens a month, and said the flattery wore off about eight or nine years ago. That is the honest state of inbound acquisition interest in managed services. An owner who once forwarded the first such email to their spouse now deletes them in a batch without opening one, and the deletion is rational, because the sender bought a list and the message was written to survive being sent to four thousand people. The problem is that this filter has no resolution. It removes the noise and the signal together, and it leaves the owner with a single undifferentiated picture of who might one day buy their company. That picture is almost always the institutional one: a fund somewhere assembling a platform, stripping overhead, indifferent to the people.
That buyer exists. Mitch Pulver, who is himself backed by a private equity fund, agreed without hesitation that the version Josh described is real, and located it precisely: capital has flooded the space, there are not enough mature large assets to absorb it, so a fund with a deployment schedule buys five companies and welds them into something big enough to justify the check. What he objected to was the assumption that this describes the whole market. The spectrum runs from that all the way down to a single operator with one investor behind him, and the two ends want opposite things from the same company. Treating them as one category is not caution. It is a failure of information that costs the owner leverage in the only transaction that will ever matter more than a year of profit.
Mitch spent two and a half years looking. He had a shot clock, originally two years, and no guaranteed job at the fund if it expired without a deal. The structure behind him was one primary investor plus friends and family, rather than the ten or more individual investors a textbook search fund carries. When he found the company, he moved his family to a town where they knew nobody and had no relatives, and settled in for what he described as the next five, ten, fifteen years. He told Josh the search was the hard part and the operating would be easy, and then said he could not have been more wrong.
Strip away the vocabulary and a search fund is a succession mechanism wearing financial clothing. It exists because a generation of founders is aging out of businesses their children do not want and their management teams cannot finance, and someone has to stand in that gap. The practical consequence for an owner is that this buyer's incentives are inverted relative to the institutional one. He is not buying a slice of a platform; he is buying his own job and his family's next decade. He cannot synergize your overhead away because your overhead is about to be his only overhead. He cannot be indifferent to your people because he will be standing in front of them on Monday. None of this makes him a better buyer by default, and an owner should test it rather than assume it. But it does make him a different buyer, and it explains why his email was written by a person and yours was written by software.
Mitch described the investment committee's purpose in one sentence: its goal is to poke holes in the deal. Not to approve it, not to celebrate it, not to confirm that the searcher had good instincts. To attack the thesis, because the worst available outcome was that he acquired a poor business and spent years running ragged to fix it for no gain. He had to appear in front of that committee twice, once to preview the opportunity and once to get the equity check signed off, and in between sat a sixty to ninety day diligence period whose entire function was to find what was wrong.
Owners tend to prepare for an acquisition process as though it were a sales presentation, and it is closer to a hostile audit conducted by people who want to like you. That distinction matters because the two require opposite preparation. A pitch rewards a good story about the future. An adversarial review rewards a business whose past holds up under someone actively looking for the seam. Every question you cannot answer becomes either a price reduction, an earnout, or a walk. And the questions are rarely exotic. They are about client concentration, agreement quality, whether gross profit is what you say it is, whether the owner is load-bearing, whether the numbers reconcile to something other than the owner's memory. None of that can be assembled in ninety days, which is the whole point. The committee is not testing the deal. It is testing how the company was run when nobody was watching.
The MSP Mitch acquired lacked operating procedures and, in his words, some of the accountability aspects of a well run shop. He came from an environment where a hull technician climbs into a ship's sewage system in a protective suit because there is no plumber to call in the middle of the ocean, and the only thing standing between that sailor and improvisation is a documented procedure someone wrote before the problem occurred. Arriving at a company where that documentation simply did not exist, he could not begin standardizing anything, because there was nothing written down to standardize. The work started a layer below where he expected it to start.
The instructive part is what he did not do next. He had every incentive to impose the discipline immediately and a team member with a government background who wanted exactly that, and he deliberately slowed down. He described a delicate balance, the need to get buy-in rather than compliance, and the specific recognition that there is a negative effect to going too hard too fast. This is the leadership judgment most operational turnarounds get wrong in both directions. Owners who discover documentation late tend either to anchor down and burn the team out, or to agree it is a great idea and never do it. The disciplined middle path is slower than it looks from outside and faster than doing it twice. It also happens to be the difference between a company a buyer can price confidently and one where the operating knowledge lives in a few heads and quietly caps the business.
Asked where the market is heading, Mitch gave the plainest answer in the conversation. Money is moving upmarket. To make their numbers work, the larger funds have to buy larger companies, which means the regional MSPs assembled over the last few years will themselves be combined into national players. In that dynamic, he said, it does not make sense for any of those buyers to acquire a three, five, or ten million dollar MSP. It is not worth their time or energy. They need larger add-ons to move the needle. His conclusion was specific about who this hurts: a genuinely strong, healthy MSP with good metrics and good cash flow conversion will still find a buyer. The ones that will not are the smaller subscale businesses doing okay, but not great.
That sentence deserves to sit uncomfortably, because "doing okay but not great" is a description most owners would privately accept about their own company, and until recently it carried no penalty. During the consolidation wave, adequate was liquid. A merely fine MSP could be sold because someone needed volume and was not being picky. What is closing is not the exit door in general but the exit door for adequacy, and the buyers left standing at that size are operators like Mitch who have to live inside the result. The strategic implication runs backward from the exit into the present. If the market will only reliably clear businesses that are actually good, then maximizing value in the exit phase is not something to take up in the final two years. The work that makes a company sellable and the work that makes it worth owning have converged into the same work, which is the most useful thing an owner can learn from a buyer.
A search fund is a vehicle in which investors back an individual to spend a fixed period, typically around two years, finding a single business to acquire and then personally operate. The searcher raises capital before knowing what they will buy, works through a shot clock, and moves into the operator seat after closing. A classic search fund carries ten or more individual investors. Variants exist, including the model Mitch Pulver used, where one private equity fund was the primary investor alongside friends and family.
The difference is what the buyer is purchasing. A traditional institutional fund buys a position in a portfolio, often combining several companies into a platform large enough to justify its capital deployment, and manages from a distance. A search fund buys one company that the buyer will personally run, usually relocating to do it. Both are private capital, and a search fund is frequently backed by a private equity firm, so the label matters less than the structure underneath it and the buyer's intended holding period.
Smaller MSPs are closer to the natural range for a search-fund operator than for an institutional roll-up, because a single operator does not need the deal to be large enough to justify a fund's deployment schedule. The binding constraint at the small end is quality rather than size. Mitch Pulver's own read is that a healthy business with strong metrics and good cash flow conversion will find a buyer, while subscale companies performing adequately rather than well are the ones facing a thinning market.
In this conversation the metrics named directly were cash flow and cash flow conversion, alongside the general strength and health of the business. Diligence typically also examines client concentration, agreement structure and gross profit quality, how dependent operations are on the owner, and whether documented procedures exist. The investment committee's stated role was to poke holes in the thesis, so an owner should expect scrutiny aimed at finding weakness rather than confirming strengths.
Mitch's position was that nobody is ever talked into selling a business they were not already considering, so outreach is largely a timing exercise. He offered an open invitation to MSP owners to have a conversation with no intent to transact, specifically to get a buyer's read on where the business currently stands. The practical value of such a conversation is information about how an outside party would price the company, which is useful whether or not a sale ever follows.
Email data has been commoditized, so buying a list and sending volume no longer distinguishes a serious buyer from an unserious one. Mitch described treating the search as a multi-channel sales process instead, combining cold calls and emails with a network of well-connected people in the MSP space he referred to as river guides, who could provide third-party validation or a warm introduction. The differentiator he identified was the human element rather than the channel.
Mitch Pulver is the CEO of Quality Network Solutions, a managed services provider supporting more than 200 K-12 school districts across Illinois and Missouri from offices in Champaign, Mount Vernon, Sullivan and Chillicothe. A graduate of the United States Naval Academy, he served as a surface warfare officer aboard the guided missile destroyer USS Decatur, first as an engineering officer and then as navigator, with deployments to the Persian Gulf and the South China Sea, before returning to Annapolis to teach seamanship and navigation to midshipmen. He holds an MBA from the University of Chicago Booth School of Business. Backed by NextGen Growth Partners, he spent two and a half years searching for a company to acquire and operate before buying Quality Network Solutions, and has completed additional acquisitions since. He remains an active buyer and offers a buyer's perspective to MSP owners whether or not they intend to sell.
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Josh Peterson is the CEO of Bering McKinley and host of The BMK Vision Podcast. Since 2004, Josh has worked with hundreds of MSP owners to build operationally sound, profitable businesses through consulting, peer teams, and direct coaching.
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If the work that makes an MSP sellable is the same work that makes it worth owning, then the operating agenda and the exit agenda are one agenda. That is the premise the BMK Vision Operating System is built on: a strategic plan, monthly accountability, and numbers that keep score, so the business holds up whether it is read by a buyer or simply run for another decade.