Kevin Bibelhausen·June 5, 2023

Raise $800k to Buy an $8m Business | Kevin Bibelhausen Interview

Kevin Bibelhausen, a former healthcare IT executive who survived COVID-induced heart failure at age 30, used his near-death experience as a catalyst to pursue business ownership in earnest. With no finance or PE background and no personal capital to deploy, he self-funded his search through SMB Twitter connections and the Sam Rosati boot camp community. He closed Heritage Fabrics — a ~$8m textile design and import company in Concord, NC with ~$10m revenue and $1.7m SDE — in January 2023, after his original equity capital provider dropped out three days before LOI signing. Kevin scrambled to raise $800k from ~200+ individual investors off a public Google Sheet of SMB investors, collecting mostly $50k checks over five holiday-season weeks, ultimately oversubscribing the round and putting in no personal equity. Heritage Fabrics designs proprietary fabric lines in North Carolina, sources manufacturing from overseas mills, and sells to interior design jobbers and hospitality clients (e.g., Four Seasons, Marriott) through a long, seasonal sales cycle. The business has strong 45-50% gross margins but is highly working-capital intensive, and Kevin entered undercapitalized after the bank failed to deliver a promised line of credit at close. His key early challenges are cash management, breaking a fear-based staff culture from the prior founder, and executing the first major trade show in seven years — which drew an exceptional response. Kevin has also joined Fruition Capital as a GP to provide institutional equity to other searchers.

Deal facts

purchase price: ~$8m (referenced as 'eight million dollar deal' for round numbers)
sde ebitda: SDE $1.7m (at time of acquisition, last couple years)
revenue: ~$10m (approaching $10 million)
financing structure: SBA loan + $800k equity raise from individual investors (preferred equity with step-up of ~1.5x-2.5x); buyer contributed no personal equity (common stock only, oversubscribed raise)
notes: Buyer closed January 13, 2023. Capital provider dropped out 3 days before LOI signing; buyer scrambled to raise $800k independently in ~5 weeks over the holidays. Line of credit promised at term sheet did not materialize at close; still fighting with bank/SBA for LOC at time of recording. Business: Heritage Fabrics, Concord NC (just north of Charlotte). Seller had reviewed/audited financials every year — unusual for private SMB. Seller insisted business stay independent and staff be protected.

Why this business

Kevin was industry-agnostic — he just wanted to get into the game. He'd been looking at healthcare IT and technology companies but found multiples inflated by COVID banner years and heavy PE competition. Textiles was 'a little sleepy' and he was able to buy at a reasonable multiple. Critically, he trusted the owner: 'I bought this business because I trusted the owner — honest as the day is long.' The seller had audited financials every year, everything flushed out in QoE, and the bones of the business were good with a long-tenured team. The business was stagnant from aging ownership, which Kevin saw as a growth opportunity.

What's working

Strong gross margins of 45-50% on a design/import model with no domestic manufacturing
Long-tenured team with deep industry expertise (some staff with 20+ years in textiles)
Seller set up strong customer relationships and reputation for maintaining stock — Heritage is a critical supplier to major interior design jobbers nationwide
Hospitality segment recovering post-COVID with pent-up demand for hotel refreshes (5-7 year refresh cycles delayed during COVID now breaking loose)
First High Point trade show in 7 years got an 'unbelievable response'
Seller provided transition support including corporate apartment near the office
Proprietary designs created in-house by designers collaborating with overseas mills give differentiated product
Oversubscribed capital raise gave Kevin a built-in investor network for future deals

What's hard

Extremely working-capital intensive: orders placed months in advance, long payment terms (60-90 days buy and sell side), revenue on new collections not realized for ~1 year after product release
Business was 'paycheck to paycheck' for first few months due to undercapitalization — the bank did not deliver the promised line of credit at close
Long, uncertain sales cycle: product shown at trade show -> samples sent -> books produced -> books distributed to designers -> orders placed — spanning multiple seasons
Inventory risk: design bets must be made 12+ months in advance and not all products will sell; dead inventory must be liquidated through alternative channels
Capital raise process: original equity provider dropped out 3 days before LOI signing, forcing Kevin to cold-raise $800k in ~5 weeks during the holiday season from a standing start with no pre-existing investor network
Staff culture reset: previous founder ran the business with an 'iron fist' and staff lived in fear; Kevin had to rebuild trust and shift culture toward transparency and growth
Textile industry is multi-generational and relationship-driven; customers were skeptical of an outsider in his 30s with no textile background

Notable quotes

I bought this business because I trusted the owner — honest as the day is long, you know, look across the table, you look him in the eye, you know he's for real. And you know that's backed up by the fact that when we did QoE everything flushed out pretty darn close.

I started thinking like I could be excited about anything, right, even if I ran a plumbing company I could be excited about that product. I don't care what Jersey I wear, I just want to play the game.

I raised a good eight hundred thousand dollars from only 300 Twitter followers.

If you have a good deal the capital will be there — it may take a little bit longer than you think.