Tom Johnell

Introducing Cassette Capital, a new Independent Sponsor

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Hi everyone,

I took a nice break and now I’m ready to hop back on the saddle. My previous saddle was a well-worn tech leadership seat. It had a rich patina, and although a little uncomfortable at times, it was a fun ride. I’m now trying out a new saddle. It’s a strange one that looks eerily similar to what someone in private equity might ride. It’s fashioned out of navy suits, oxford shoes, and across the sides it’s embroidered with words like enduring, synergies, and professionalization.

If you’ve read this far, maybe you’re interested in hearing more about my journey. It started out very simple. Watching YouTube and stumbling upon a video called “Couple leaves jobs and sells everything to buy $1.6 million campground.” It’s only a four minute video, but it planted a seed of entrepreneurship I had never considered. Having been in the tech industry for so long - it never occurred to me that you could become an entrepreneur in ways that did not involve the VC fund-raising grind. You can just buy a small, profitable business!

What I’m talking about has been coined "entrepreneurship through acquisition” or ETA - and it’s becoming an increasingly popular avenue for folks who want to make a big bet on themselves. I’m not going to go into too much detail here, but if you’re interested in learning more, go read the bible of ETA: “Buy then Build” by Walker Deibel.

Investigating ETA led me down a path where I discovered a local entrepreneur’s blog post titled “No Sunk Costs”. It was written by my (now) business partner Thomas Farmer who left his technical role at Dow Inc to buy a pizzeria here in Destin, FL. Thomas is wickedly smart - he has already grown his business over 50% since acquiring it in 2024. Absolutely stoked that there was a local who went down the ETA path, I reached out to Thomas to learn about his journey.

Since then, our friendship and partnership has grown tremendously. I’m extremely grateful for Thomas’ mentorship within this realm of business & entrepreneurship. What should be clear at this point is that we’ve decided to partner together for future acquisitions! Our ideal target has a long history of generating 3-7 million of EBITDA with stable recurring or reoccuring demand in an industry that aligns with our prior expertise and backgrounds. At this size range, we cannot follow the search playbook described in the ETA bible linked above. Acquisitions of this size are financed and operated differently from search investments, but professional investors exist in this space and the early feedback we have received from them has been very positive. So we will acquire businesses with the intention of shepherding them through the transition, defining and implementing growth plans, and managing the business to generate a financial return for ourselves and our investors.

What I’m describing is effectively how private equity works, but what will be different for Thomas and myself, is we will not raise a fund before finding a company to buy. Instead, we will find a company, get them under exclusivity for a particular price, and then go raise the capital. This, historically, has been called a fundless search, and more recently has been referred to as an independent sponsor deal.

Thomas and I have created a management company for our search that we’ve called Cassette Capital. You can check out our website at https://cassettecapital.co. Right now, Thomas and I are in the very early stages. We’re setting up the back-office, attending conferences, and methodically building our network. Soon, we will be aggressively searching for a company, ideally one that is aligned with our expertise. Namely, chemical & software engineering.

Thank you for taking the time to catch up on what I’m doing, and if anything I said above sounds at all interesting to you, I would genuinely be delighted to have a call with you and tell you more. I will be in the Dallas area on October 14-15 for the McGuireWoods Independent Sponsor conference. If you’re in the area or you know someone who will be attending that you think I should talk to, let’s please connect!

Call to Action

There are 3 groups of people we would love to hear from.

  1. We would love introductions to business owners or executives at companies in our target industries that have an ownership transition on the horizon. I am also interested in talking shop with anyone from my software engineering network that has thoughts or ideas about target industries or businesses. These inquiries should go to me directly at tom@cassetecapital.co
  2. If you are an accredited investor that can write a 100k+ check into an illiquid (5+ year timeline) investment and want to hear about future opportunities, let us know at invest@cassettecapital.co.
  3. If you are interested in working at one of our portfolio companies, please reach out to me directly at tom@cassettecapital.co. We are building out a bench of potential board members and executives while we look for our next business. We would love to discuss opportunities with any experienced operators in our target industries.

Also, check out Thomas’ announcement to hear his perspective!

Best, Tom

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#career #cassette-capital #independent-sponsor #private-equity