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Tim Ludwig
@tsludwig
Owner of and investor in exceptional small businesses. Tweet about PE, small business (SMB), search funds, management.
San Diego, CA
lettersofintent.substack.com
Joined March 2009
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    Tim Ludwig
    @tsludwig
    Jan 12, 2020
    A few guiding principles for a new CEO’s 1st year at an acquired company: 1. Do no harm. You (or the investors) bought a good business. Don’t mess it up. 2. Look for low-hanging fruit, especially things that will make a positive impact on team morale. Can be as simple as...
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    Tim Ludwig
    @tsludwig
    Mar 2, 2020
    A CEO's role changes as a company grows. Directionally, like this: * Startup: driver, fixer * Emerging: team builder, coach, process architect * Scaling: allocator, leadership developer, culture protector * Established: strategist, chief communicator, accountability creator
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    Tim Ludwig
    @tsludwig
    May 14, 2022
    In a NYT article today about the 0.1% of highest earners in the US (>$1.6mm/yr), three conclusions were drawn: 1) Rich people own equity 2) They own equity in boring businesses 3) Those SMBs often have a moat that allows them to avoid competing solely on price
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    Tim Ludwig
    @tsludwig
    Oct 3, 2020
    I spent about 6 years working in real estate before becoming an investor/owner of small companies. I've been asked which I liked more and, for me, the answer is small company ownership, but not because it is more lucrative or a better path to wealth. Let's compare the two... /1
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    Tim Ludwig
    @tsludwig
    Aug 8, 2020
    I just learned about Spielberg's deal with Universal Parks: "[for consulting], he receives 2% of all park ticket revenue and a portion of park concession receipts...in perpetuity...up to $30-50M/yr; [he can also trigger an] exit deal and collect a lump sum pmt of up to $535M"
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    Tim Ludwig
    @tsludwig
    Jun 23, 2020
    Operating most SMBs isn't glamorous. 97% of the time, it's about being consistent and fighting inertia by making small improvements to a never-ending list of issues. Those that do this well survive; the rest die or stagnate. The very best earn the chance to become larger firms.
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    Tim Ludwig
    @tsludwig
    May 18, 2021
    1/ One of the ways SMB operators increase their equity value and reduce risk is by professionalizing operations. Most sub-$1mm (or even <$2mm) EBITDA SMBs lack core elements of a scalable, less risky company. Here are some examples...
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    Tim Ludwig
    @tsludwig
    Apr 12, 2020
    When buying a business, you want actual cash flows to tie to the reported financials of the company. If the actual flows of cash differ materially from the reported numbers, you'll want to dig in. One exercise to evaluate this uses a tool called a 'cash proof template'
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    Tim Ludwig
    @tsludwig
    May 10, 2020
    Buying a business, especially a good one, is hard. But not impossible. And not without risks. Reducing those risks takes a good process, emotional control, discipline, savvy advisors, and relentless hard work. Though just about anyone can do it.
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    Tim Ludwig
    @tsludwig
    Jul 9, 2020
    I was curious to estimate how many SMB PE/CEO-types are active on Twitter, so I started to make a list. Thought others would like to see (and maybe add to) it. So, here goes: 1 @BrentBeshore 2 @LongvueMatt 3 @rudman_ben 4 @mgirdley 5 @awilkinson 6 @MatthewGHinson /1
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    Tim Ludwig
    @tsludwig
    Sep 1, 2020
    Most people who buy a business, and nearly all who buy more than 1 company, will need to raise capital. There is a lot of advice available about how to effectively raise funds, how to set terms, etc., but the best capital raisers that I know do a few things really well:
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    Tim Ludwig
    @tsludwig
    Dec 27, 2023
    Hey, parents! One skill I recommend you teach your high school and college age children who are preparing to enter the workforce: cold outbound outreach. My daughter is a freshman in college and beginning to think about summer internships. Most of her classmates are waiting
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    Tim Ludwig
    @tsludwig
    Jan 21, 2020
    My first PE investment resulted in a total loss. I'd invested almost 10% of my available capital. The education was costly, but has made me a lot of money in future deals by not repeating the same mistakes. What I learned:
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    Tim Ludwig
    @tsludwig
    Feb 1, 2022
    Required for launching a new fund: ☑️ The right partner (@JustinEBurris) ☑️ Funding - Millions of $ from leading business families ☑️ Compelling strategy - Search fund-like model w/ no PG, full $ support, long-term holds 🔲 8-10 top operators who want to buy & grow a SMB