How We Left PE, Bought a $5M Business and Scaled To $21M in 2 Years (M&A and Organic) | Johannes Hock Interview

Johannes Hock, a former private equity associate left his high-paying job to build wealth through acquisition. In 2022, Johannes and his partner acquired DFW Turf, a fast-growing artificial turf installation business.After leaving a prestigious private equity firm, he went on to review over 200 deals in just a few months, submitted 10 LOIs, signed 3, and ultimately closed on one.In just two years, they scaled the business from $5M to over $21M in revenue—leveraging both organic growth and strategic acquisitions.In Today’s Episode We Discuss:00:00:00 - Intro00:00:31 - Where it all started00:02:09 - Being an associate at a PE firm and quitting — best decision ever00:05:18 - Why the 10-10-10 model in private equity wasn’t attractive enough00:07:31 - Underestimating the actual risk of acquiring a company00:09:25 - Johannes’s financial position before quitting his private equity job00:10:32 - First acquisition details (looked at 200–300 deals in 2–3 months)00:12:26 - Chasing the perfect deal vs. getting something done00:15:18 - The conversation with the lender that closed the acquisition00:18:15 - Why recurring revenue is overrated (and how to create equity value)00:21:51 - Why cash controls are the #1 focus post-acquisition00:25:29 - Only one person wasn’t a good fit post-acquisition00:27:31 - One regret: not adding more cash to the balance sheet00:29:00 - Cap table structure and the importance of raising smart money00:33:42 - Organic growth and hiring 30 people00:37:56 - Risks of buying a company growing 40–50% per year00:40:54 - Reinvesting in growth while staying profitable00:41:57 - The story of the first add-on acquisition in 202400:44:19 - The thought process behind add-ons (51% to 100%, with flexibility)00:47:29 - How they finance future acquisitions00:51:18 - Trucks break down, people don’t show up, customers get angry — Johannes has seen it all00:54:37 - The plan: open 3 new locations and do 1–2 acquisitions per year00:59:31 - Industry is growing 50% annually (with 20% growth, it would’ve been a different story)01:00:40 - The happiness of pursuit----------------------------------------------Follow Mikk/PrivatEquityGuy on Twitter: ⁠⁠https://x.com/PrivatEquityGuy⁠⁠Johannes on X: https://x.com/HockJohannesThis podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.