Ep. 232 — Kevin McArdle: My Vanity Metric Is Cash Flow

6 min read

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Episode Summary

You’re going to sell your business once. Maybe. The buyer on the other side of the table has done it 38 times, and that asymmetry is the entire game. It’s why most owners walk away from the closing table with the wrong deal or, worse, with the right price and the wrong home for the business they spent a decade building. Kevin McArdle is the co-founder and CEO of SureSwift Capital, a holding company that acquires bootstrapped SaaS businesses from independent founders and runs them for the long haul. He left a 15-year career at Cerner to do this, started by buying a $50K website with his co-founder’s own cash, and five years later has closed 38 acquisitions and raised SureSwift’s first outside fund. Kevin and I got into how he thinks about deal structure, why buy-and-hold is a strategy and not a religion, the founder fit screen that catches the deals that quietly blow up, why flat businesses are flat for a reason, and how he reinvests cash flow into the next acquisition instead of stripping it out. The line that stuck with me: you stay tied to your business for the rest of your life whether you own it or not. So sell it to someone you’d actually be proud to see on your LinkedIn.

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## Top 10 Takeaways
  1. Your cash flow is the only vanity metric that compounds. Everything else is just noise around it.
  2. Buy and hold is a strategy, not a religion. If the offer fits the asset, take it.
  3. You stay tied to your business for the rest of your life. Squeeze every dollar at closing and you poison the legacy.
  4. Founder fit comes before financial fit. If the operator feels off, the business is usually wired the same way.
  5. Flat businesses are flat for a reason. Turnarounds are harder than buying something that’s already growing.
  6. The cheapest growth lever you’ll find post-close is buying a business that’s growing 50% to 100% year over year.
  7. Your largest expense is people, so reinvest cash into team capacity, not assets you don’t need.
  8. Multiple arbitrage is real: buy at 3-5x profit, exit at 5-7x revenue once scale shifts the buyer pool.
  9. Run a quarterly portfolio review and label each business: invest, harvest, or sell.
  10. Selling price is one of a hundred things that matter at exit. The other 99 are just as important.

Sound Bites

“My vanity metric is cash flow. Is that a vanity metric if it’s the only thing that matters? I don’t know.” (@TBD) — Kevin McArdle

“Buy and hold is a strategy for us. It’s not a religion. If somebody makes us an offer we can’t refuse, we’re going to do that deal.” (@TBD) — Kevin McArdle

“As a seller, you’re going to be tied to your business for the rest of your life, whether you own it or you don’t. If it’s on your LinkedIn profile, as you’re introducing yourself in a business setting, you might be like, oh, I’m so-and-so, I just sold this business.” (@TBD) — Kevin McArdle

“Businesses take on the personality of their founder for better and for worse. If there’s something off about that founder, there’s probably something off about their business.” (@TBD) — Kevin McArdle

“We’re all just like dumb cave people wandering around in the wilderness trying to figure shit out. And I’m one of those people.” (@TBD) — Kevin McArdle

About This Episode

Kevin McArdle is the co-founder and CEO of SureSwift Capital, a holding company that acquires bootstrapped SaaS businesses from independent founders. Before SureSwift, Kevin spent 15 years at Cerner Corporation, eventually becoming one of the youngest VPs in the company’s 35-year history. He left corporate America on July 4th, 2015, started SureSwift with his original co-founder later that year, and at the time of recording had closed 38 acquisitions in five years and was finalizing SureSwift’s first outside fund. What makes Kevin worth listening to is the rare combination of buyer fluency and seller respect: he treats the people he buys from as long-term partners, not transactions, and he’s transparent about how the math actually works.

Resources Mentioned

  • SureSwift Capital — Kevin’s holding company; sign up for monthly valuation webinars. — sureswiftcapital.com
  • Kevin on Twitter — Best place to reach Kevin directly. — @Kevin_McArdle
  • Brent Beshore / Permanent Equity — Referenced for the permanent equity model and as a mentor to Kevin on fund structure.
  • Quiet Light Brokerage (Mark Daoust) — One of the brokers Kevin learned the SaaS M&A market through.
  • FE International (Thomas Smale) — Another broker Kevin bought businesses from early on.
  • Digital Exits — Third broker Kevin used to source deals in the early years.
  • King of Capital — Steve Schwarzman / Blackstone story — Referenced for the scale of mistakes even the best PE firms make.
  • Constellation Software — The closest public comp to what SureSwift does in SaaS roll-ups.
  • Roper Technologies — Referenced as another public comparable for the acquisition holding model.
  • Vista Equity / Robert Smith — 110 Standard Operating Procedures — The playbook Kevin tried to steal early on for systematizing portfolio operations.
  • Arvid Kahl — Sold his business (with co-founder Danielle) to SureSwift; previous Intentional Growth guest.

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