Five Sectors Where We Buy.
Each sector was chosen because it fits the model: durable customer demand, realistic management transfer, and financing logic that holds under stress.
Why Sector Focus Matters
Our sector focus reflects where the model actually works. The right sectors share durable customer demand, realistic management transfer, and financing logic that holds under stress. These are not aspirational categories. They are the sectors where the operating and capital logic has a genuine basis.
IT Services: Vertical MSP / MSSP
The better MSP and MSSP businesses combine recurring revenue, high switching costs, compliance or workflow dependence, and genuine customer stickiness. Vertical specialization typically produces stronger retention, better pricing, cleaner documentation, and less commodity competition.
| What We Look For | What Gives Us Pause |
|---|---|
| Contracted monthly recurring revenue | Revenue tied to project work or one-time engagements |
| Vertical specialization in a defined industry | Generic IT support with no sector focus |
| Customers who stay because switching is genuinely costly | Relationships that follow the founder personally |
| Documentation and compliance workflows embedded in client operations | Informal service arrangements with no contracts |
Metal Finishing & Surface Treatment
Special-process finishing businesses — anodizing, plating, coating, heat treatment — where certifications, customer approvals, and repeat work create a defensible position that institutional buyers overlook. NADCAP, AS9100, and customer-specific approvals are genuine moats.
| What We Look For | What Gives Us Pause |
|---|---|
| NADCAP, AS9100, or customer-specific process certifications | No certifications or approvals in place |
| Repeat purchase orders from aerospace, defense, or medical customers | Commodity work with no differentiation |
| Process knowledge distributed across the operation | One indispensable process engineer |
| Financeability and transferability both present | Strong certifications, weak management depth |
Niche Staffing & Recruiting
Specialized staffing models — skilled trades, healthcare, engineering, legal — fit the model when branch-level process and repeat employer demand drive the revenue, not founder relationships. The better firms hold specific placement expertise that customers return to because the quality of the match is consistently better than the alternative.
| What We Look For | What Gives Us Pause |
|---|---|
| Defined technical or professional niche | Generic labor pool with no specialty |
| Repeat employer demand driven by branch process | Revenue dependent on founder relationships |
| Branch economics that hold at the individual level | Strong aggregate numbers, shallow per-branch performance |
| Recruiters who follow a repeatable workflow | Key-person dependence among individual recruiters |
Energy Services: Utility / Electrical / Grid Support
Utility construction, electrical testing, commissioning, grid support, and required infrastructure maintenance fit the model when recurring maintenance contracts, inspection requirements, or infrastructure dependence support repeat demand. The work is close to non-discretionary, which matters in a downturn.
| What We Look For | What Gives Us Pause |
|---|---|
| Recurring maintenance contracts or required inspection work | Project-based revenue with no repeat component |
| Defined service territory with long-standing utility relationships | Broad geographic footprint with no dominant market |
| Qualified field supervisor structure that can operate independently | Safety record issues or unresolved compliance exposure |
| Capital structure that supports working capital requirements | Cyclical revenue with no downside cushion |
Outsourced B2B Services
Recurring outsourced services tied to finance, compliance, HR, records management, or back-office operations fit the model when the service is embedded in the client's actual operating process — not a discretionary spend item that gets cut in a slow quarter. Embeddedness produces strong retention and real transferability.
| What We Look For | What Gives Us Pause |
|---|---|
| Service embedded in client's monthly operating process | Discretionary service that can be cut without disruption |
| Strong retention driven by structural switching costs | Long tenure with no underlying contract or switching barrier |
| Process depth that transfers to an outside operator | Institutional knowledge concentrated in one person |
| Customer quality that supports the retention story | Churn concealed by strong recent growth numbers |
What This Means in Plain Terms
If you own a business in one of these five sectors, we are open to a direct conversation. If the business fits, we evaluate it seriously. If it does not fit, we say so early.