Brady:

Y'all, we are so excited about today's guest. Today’s guest is Scott Weavil, and Scott is an expert in M&A in the lower middle market. To clarify, we’re talking about companies with revenues between $5 million and $100 million—privately owned enterprises looking to either execute an M&A strategy by acquiring businesses, or they're looking to sell, exit, or transition their business. Scott is an absolute expert in this space, and we are so excited.

I just wanted to give a heads-up to our audience that this episode was recorded under our old podcast name, Accelerating Lower Middle Market Value. We’ve since rebranded to Brewing Business with Brady, so you might hear a few references to the old name. But, nonetheless, this episode is packed with valuable advice, and we hope you enjoy it!

Scott, again, thanks so much for being here with us.

Scott:

Yeah, absolutely. Happy to be here, and thanks so much for the warm welcome!

Brady:

Awesome. Scott, I think it’s really great that you understand what lower middle market value truly means. We’ve interviewed a lot of business owners in the lower middle market, and they don’t always realize they fall into that category. It’s great to talk with someone who understands what that means. I’d love for our audience to hear about your journey from being an M&A attorney to founding Sierra Pacific Partners. Can you share your origin story?

Scott:

For sure. I always thought that moving toward the finance side or investment banking would be interesting. When I started on Wall Street in 2008, a common path was working for a large law firm for a few years before transitioning to a bulge-bracket bank. But, after 2008, that opportunity dried up.

I spent years as an M&A lawyer, and a few years ago, I had a client who was looking to sell his business but couldn’t find a banker or broker he liked. There were a number of reasons for this, including his unrealistic expectations. I ran a sell-side process for him—not the financial aspects, but things like reaching out to buyers, getting them under NDA, and helping with negotiations. We were close to a $40 million deal, but it fell apart at the end, as deals sometimes do. Even though it didn’t close, I enjoyed being more central to the process. That’s what made me think about starting my own firm—Sierra Pacific Partners—where I could wear a different hat.

Brady:

That’s really great. I’ve been part of M&A processes, and they’re such unique, dynamic processes. Managing different party expectations and navigating the negotiations can be tough. It’s clear why you were drawn to it—there’s something exciting about the challenge.

So, how does Sierra Pacific Partners differentiate itself in the lower middle market M&A advisory space?

Scott:

There are several things that set us apart. I’ve been in M&A for over 15 years, including at the highest levels. It’s not just about sophisticated financial analysis or document reviews—it’s about responsiveness and professionalism. We pride ourselves on delivering that to our clients.

We also use a success-fee-driven pricing model for committed sellers. If someone isn’t serious about selling, we probably won’t take on the engagement. But for those who are serious, we focus on success-based compensation, rather than monthly retainers or milestone fees. We want to make sure we’re incentivized to close deals, but only if it makes sense for the seller.

Brady:

Got it. Let’s take a step back—how would you define the lower middle market for our audience? What are the key characteristics?

Scott:

Quantitatively, we’re talking about companies with $5 million to $150 million in revenue, or $5 million to $100 million in purchase price. But that range encompasses very different types of companies. What makes the lower middle market unique is that it’s a blend of Main Street businesses and the true middle market.

We don’t typically see the day-to-day owner dependence that you’d find in smaller companies, but we also don’t see a complete separation between ownership and management like you would in larger companies. The CEO is usually still an owner, and decisions are not always driven solely by economics. Owners in the lower middle market care about legacy, employees, and other factors beyond just the purchase price.

Brady:

That’s a great point. I always tell people that just because a company has $5 million in revenue doesn’t mean they’re truly a lower middle market business—it depends on their operating characteristics. You mentioned some success stories earlier. Can you share a recent example of a successful exit you helped facilitate?

Scott:

Absolutely. We sold a SaaS company earlier this year. It wasn’t high-growth, but it had steady ARR (Annual Recurring Revenue). The kicker was that the owner was only working about four to five hours a week, so it was a mostly passive business. He had a high opinion of its value because the opportunity cost of keeping it was low.

We found him a great exit after some patience. He provided information quickly, which helped keep the deal moving forward. One thing sellers need to understand is that you’re not selling a business out of a vending machine—it takes work. Providing timely information is crucial to keep momentum going and prevent buyers from walking away.

Brady:

Yeah, I’ve been on the buyer side, and when you have to wait weeks for financial reports, it doesn’t leave a good impression. You start questioning their internal processes and whether there are skeletons in the closet. It’s all about keeping things professional and moving.

Scott:

Exactly. Delays can kill deals, and when financials aren’t clear or there are multiple errors, buyers start wondering if they can trust anything.

Brady:

Absolutely. Scott, what excites you about working in the lower middle market versus larger companies?

Scott:

It’s an interesting space because it’s a bit of a gap between smaller SBA-driven deals and large corporate transactions. There aren’t many advisors specifically focused on the lower middle market, and I enjoy working with founder-owners who are deeply involved in their businesses. It’s rewarding to help them navigate the complexities of selling.

Brady:

What are some common misconceptions that business owners have about selling their companies?

Scott:

One big mistake is receiving an unsolicited offer and not running a process. By running a competitive process, you’re more likely to get better terms, even from the original bidder. Entering exclusivity too early can also be a mistake, as it reduces your leverage. Other common issues include confidentiality breaches—often from the seller’s side—and unrealistic valuation expectations.

Brady:

Great insights, Scott. Thank you for sharing your expertise today!

Scott:

Thanks for having me, Brady!