with Kevin Bibelhausen · Heritage Fabrics
LenderHawk analysis. Not affiliated with or endorsed by Search Funded: The ETA Podcast.
Heritage Fabrics fit a self-funded path because it was a small-business acquisition in the lower middle market where a motivated operator could own the asset outright and build value through hands-on management. Kevin also saw the business as a way to create wealth while leading a team and participating in a local community as a long-term owner.
The business was closed on January 13, 2023. The episode does not provide operating results after closing.
Self-funded search can close faster when the buyer uses brokered deals instead of waiting for proprietary seller conversations to mature.
A searcher without a large personal balance sheet can still raise meaningful equity by leaning on social media, referrals, and persistent outreach.
A cap table with more than 10 direct investors creates more complexity than a fund-based raise and can be a reason to build an anchor-investor model.
Small-business acquisition fundraising improves when the searcher starts investor relationships before the LOI, even if the first deal is not yet identified.
Deals die most often on debt capacity and unverifiable add-backs, so early screening should focus on bankability and quality of earnings risk.
A traditional search’s salary safety net changes behavior materially, while a self-funded search forces tighter urgency and more willingness to grind evenings and weekends.
The best self-funded searchers seem to choose ownership and community impact first, with financial upside as a secondary benefit.
A fund that writes a large initial check can reduce searcher stress enough to let the operator focus on closing, due diligence, and post-close execution.
Kevin raised $800,000 in five weeks between Thanksgiving and Christmas of 2022.
He used social media and direct outreach to build most of the investor base for Heritage Fabrics.
Heritage Fabrics closed on Friday the 13th, January 13, 2023.
Kevin says the acquisition missed his original year-end target by only two weeks.
He submitted two or three LOIs in 2022 before getting Heritage through the first hurdles.
The early search process was used as practice for future deals.
His minimum check size for the Heritage raise was $50,000.
That helped explain why the cap table still ended up with more than 10 investors.
Fruition Capital closed its first fund at $5 million and said it was oversubscribed.
Kevin described that first fund as a launch point for a larger $20 million raise planned for August.
Fruition wants to back self-funded companies in the $1 million to $2 million EBITDA range.
Kevin called this range a sweet spot between mom-and-pop deals and larger private equity competition.
Kevin said the self-funded model can support a 25% IRR for passive LPs.
He used that return target while positioning Fruition to alternative asset investors.
Build investor relationships before you need the money, not after the LOI lands.
Why: The highest-conviction capital is easier to raise when the investor already knows your style and can track your process over time.
Use smaller, newer investors as practice before pitching famous names.
Why: The same questions repeat, and a few reps sharpen your answers before you face investors who talk to one another closely.
Look at brokered deals if speed matters.
Why: The broker has already moved the seller farther along, which shortens the path from initial review to LOI and close.
Screen for bankability and clean add-backs before getting emotionally attached to a deal.
Why: Most of Kevin’s failed processes broke on debt capacity or unverifiable financial adjustments.
Set a recurring LOI goal, such as one per month, to create at-bats.
Why: Repeated LOIs build negotiating skill and improve judgment even when the first few targets do not close.
Treat self-funded search like an owner-first commitment and be willing to grind nights and weekends.
Why: Without a funded salary, progress depends on persistent execution rather than waiting for perfect conditions.
While working at a hospital system during the pandemic, Kevin contracted COVID, developed heart complications, and was told he might need a transplant. After a year of treatment and recovery, the experience made him decide to stop delaying and go buy a business.
Lesson: A major life event can convert abstract ambition into urgent action and shorten the path from intent to execution.
Kevin got very close to closing a small acquisition in 2018, only to have the lender suddenly require roughly double the equity he had planned to inject. He walked away, returned to corporate work, and later used that failure as a lesson in financing realism.
Lesson: Many deals fail not because the target is bad, but because the capital structure was underwritten too optimistically.
Kevin points to a searcher who bought a towing company and wanted to drive the tow truck in the town parade as a sign of the right mindset. He uses that example to distinguish community-first ownership from spreadsheet-only buying.
Lesson: The best small-business owners often care about belonging and stewardship, not just return multiples.