Jed Morris·March 20, 2025

Lessons from 24 Acquisition Nightmares | Jed Morris Interview

Jed Morris is a 10-year Air Force veteran and MBA (NYU Stern) who worked at Microsoft and HP before leaving tech to buy a small residential landscape construction business in the Southwest US for ~$400k (2.5x SDE, ~$1.2m revenue), financed with one-third cash from friends and family and a two-thirds personally guaranteed seller note. Before buying, he spent roughly nine months doing a paid quasi-internship inside the business, successfully proving out CRM and digital-ad theories under a pre-agreed option price — a diligence approach he considers his best decision. Five weeks after closing, he acquired a second landscaping business (commercial HOA maintenance, similar size) with dreams of building a regional roll-up, but moved far too quickly: integration was harder than expected, cash conversion cycle surprises consumed working capital, and undisclosed seller issues (details sealed by NDA/settlement) led to insolvency. Jed lost approximately $750k in personal cash, his home, and most assets, and relocated his family cross-country. Now focused on writing a book — 'Buyer Beware' — drawing lessons from 24 failed acquisitions he has documented, he found that seller misalignment (including outright fraud) drove 65% of failures, followed by cash conversion cycle mismanagement and market black-swan events. He remains bullish on ETA but cautions first-time buyers against over-leveraging and under-diligencing.

Deal facts

purchase price: ~$400k (first business); second business similar size acquired ~5 weeks later
multiple: 2.5x SDE
sde ebitda: SDE ~$160-170k (estimated; books were imprecise)
revenue: ~$1.2m per business; combined ~$2.4-2.5m
financing structure: 1/3 cash (raised from friends, family, Air Force contacts), 2/3 seller note (personally guaranteed, amortized over 10 years with balloon at month 61); no SBA used
notes: First business: project-based residential landscape construction (~$1.2m revenue). Second business: commercial HOA maintenance landscaping, acquired ~5 weeks after first. Jed spent ~9 months prior to purchase working informally in the first business under a signed option agreement fixing the price. Total personal financial loss estimated at ~$750k cash plus several hundred thousand in remaining debt.

Why this business

Jed initially targeted defense-tech and IT-enabled services because of his Air Force background and Microsoft experience, but couldn't find deals the right size or region. He pivoted into landscaping almost by accident after befriending owners in the space, recognizing it as a highly fragmented industry with PE roll-up precedent (Bright View). He chose the specific business after a ~9-month quasi-internship that let him validate his digital marketing and CRM theories before committing, and was drawn by 40+ years of operating history, strong Google reviews, and what he saw as substantial low-hanging-fruit improvements.

What's working

Digital marketing and CRM implementation: activating Google Local Service Ads produced a 34% increase in inbound sales calls; a HubSpot CRM built from 36 months of paper invoices generated 7 immediate sales from a single email campaign
Cross-selling thesis between the two businesses proved out: commercial HOA clients provided year-round work for project construction crews, smoothing seasonal cash flow gaps
Network effects upon acquisition: being a recognized buyer in a small local industry led to four additional owners proactively reaching out within weeks, creating deal flow
The internship/option structure de-risked the deal significantly — Jed had full book access, bank account visibility, and real operational experience before signing

What's hard

Moved too fast into a second acquisition: bought business #2 just five weeks into ownership of business #1, without truly stabilizing the first; manufactured urgency replaced rational pacing
Pivoting from a debt-free business to one carrying acquisition debt fundamentally changes the operating model — cash conversion cycle, insurance costs (up 30% immediately), payroll timing, and AR collection all create pressures the previous owner never faced
Misalignment with seller(s): Jed's research across 24 failed acquisitions found this was the #1 cause of failure in 65% of cases, with more than half involving outright material misrepresentation; the NDA/settlement structure prevents him from disclosing specifics of his own case
Digital payment transformation was far harder than expected: customers who paid by cash or check for decades resisted switching, requiring individual phone calls; property management companies on the HOA side had their own entrenched payment processes
Tech job market deteriorated: the safety net Jed had modeled (top-secret clearance, MBA, coding skills) did not produce job offers after failure — eight months of searching, multiple final rounds, no offer
Total financial loss ~$750k in cash (home equity, liquidated assets, capital put into the business) plus hundreds of thousands in remaining personal guarantee debt; family moved across the country to stay with his brother

Notable quotes

A business is the direct reflection of its owner every single time. That person has built the business, they've hired the employees, they've built systems or not built systems. They have created an entity that is a reflection of themselves. And so the idea that the owner is simply going to step away and then you're going to step in and you're not going to be responsible for however they built that business is irresponsible.

I spent a million dollars learning how to do it the wrong way and the right way. You know, it would be foolish to throw away all that knowledge.

The people that I see who are willing to sign three- and four-million-dollar loans but aren't willing to spend $40,000 on the quality of earnings — your aspect of risk is flawed. It is wrong. And if your answer is, 'Oh, I just don't have the cash for that,' then I would argue that you're not ready to buy a business.

There is no debtor's prison in America. You're going to — there is going to be a resolution to this matter. As long as you don't break the law, you're not in any real issues here.