Sam Rosati·November 14, 2024

How to Become an Independent Sponsor | Sam Rosati Interview

Sam Rosati is a Tampa-based attorney-turned-entrepreneur who took an indirect path through accounting (PwC), big-law M&A practice, and self-funded search before evolving into an independent sponsor model. After buying and selling two SBA-funded businesses — Alpha Dumpsters (a rolloff dumpster brokerage) and a patio screen door manufacturer — during COVID with modest gains, he pivoted fully to the IS model, partnering with an industry veteran and two young operators to majority-recapitalize West Florida Fence, a commercial fence installation business in Tampa. The platform grew rapidly through organic expansion (doubling revenue in 18 months before any M&A), then executed five additional acquisitions across Florida (Orlando), Georgia (Atlanta), and Arizona (two in Phoenix), becoming the largest commercial fencing contractor in the Sunbelt. Rosati structured the platform conservatively on debt, avoided PE-style pressure, and leaned into a first-mover advantage in a fragmented industry not yet crowded with financial sponsors. The platform recently recapitalized with Bertram Capital, a San Francisco PE firm with $3.5B AUM, to fund a Phase 2 build-out. A significant portion of the episode is devoted to explaining the independent sponsor model — how it differs from self-funded search and traditional search funds — and Rosati's broader role in the ETA community through SMB Bash, SMB Boot Camp, and SMB Law.

Deal facts

financing structure: Conservative conventional debt (not SBA); structured to remain low-leverage to enable future acquisitions
notes: Platform: majority recapitalization of West Florida Fence (Tampa, FL), a family-owned commercial fencing contractor. Five subsequent acquisitions made including deals in Orlando suburbs, Atlanta, and two in Phoenix. Most recently recapitalized by Bertram Capital (San Francisco PE firm, ~$3.5B AUM, Fund V at $1.5B). Prior businesses: Alpha Dumpsters (rolloff dumpster brokerage, SBA deal, sold ~18 months in) and a patio screen door manufacturing business acquired 39 days later, also sold during COVID for a small gain.

Why this business

Rosati met a former CEO of a fencing hardware business in Tampa and saw an opportunity to consolidate commercial fence installation — a fragmented market with limited private equity competition, strong demographic tailwinds in the Southeast, and a clear bifurcation from the less-defensible residential side. He was drawn by the visibility into contracted revenue, the higher barriers to entry for commercial/government work, and the ability to structure a platform where he could focus on dealmaking rather than day-to-day operations.

What's working

Partnering with young, hungry operators (the original West Florida Fence management team) who grew the platform organically — doubling revenue in the first 18 months before any acquisitions were added
Being an early mover in commercial fencing consolidation before private equity arrived, enabling acquisitions at favorable multiples with limited competition
Conservative leverage strategy: keeping debt low allowed the platform to use balance-sheet capacity for accretive acquisitions without raising fresh equity
Repeat customer relationships with general contractors and property owners that reduce customer acquisition cost and provide revenue visibility in a project-based business
Expanding into higher-margin, recurring-revenue-adjacent services: gate fabrication, gate automation/access control, and temporary fence rental
Geographic focus on Southeast markets with long-term demographic construction tailwinds, later expanding into Phoenix which shared similar characteristics
Bifurcating operational leadership from deal origination — Rosati handled transactions and strategic oversight while dedicated operators ran day-to-day

What's hard

Commercial fencing is project-based contracting, which creates revenue lumpiness and requires managing a pipeline of bids and contracts to maintain visibility
Not owning fulfillment (in the earlier dumpster brokerage) made customer satisfaction difficult — a lesson that influenced how Rosati structured the fencing platform
The independent sponsor path took Rosati an indirect, decade-long route through accounting, law, and self-funded search before he found his footing; he acknowledges he could have moved more directly to the IS model
Self-funded searchers using heavy SBA leverage are often undercapitalized and overburdened, limiting growth — Rosati sees this as a systemic challenge in the community
Finding acquisition targets requires significant time and attention; Rosati notes that dedicating near-full-time effort to deal origination was what unlocked the pace of acquisitions in the later phase

Notable quotes

deals are ultimately about people because at the end of the day like all your counterparties in a transaction are people and so the numbers can say what they want the business case the study of it can say whatever you want ultimately it's all about people

self-funded Searchers think they can go buy a business and eject from a career that maybe is not satisfying to them and maybe they're doing it hopefully for the right reasons but maybe not necessarily they're doing it to maybe own as much of the equity as they possibly can in a small company and what does that require it requires a ton of debt and I think that Dynamic is exactly what hinders companies from becoming big

if you know you want to be an independent sponsor which is to say somebody who buys businesses with capital Partners but fundamentally has operating team members running the dayto day so call it entrepreneurial private Equity then I agree just go work for somebody who's an independent sponsor and learn from them

the key characteristic that allowed the platform to work as well as it did is the day-to-day team running the business grew the business tremendously in the first 18 months organically