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Episode Summary
You want out clean, you want the name on the door to stay, and you want the cash up front. Most exit paths make you pick two of three. Sell to a competitor and the money shows up, but the name and most of the team often don’t. Take the PE check and there’s a clock ticking toward a re-sale you don’t control. Run an ESOP and the legacy holds, but you’re sticking around. Trish Higgins co-founded Chenmark in 2015 with her husband and her brother-in-law after the three of them walked away from hedge funds and currency desks to buy boring, cash-flowing small businesses with no fund, no end date, and no obligation to ever sell. We got into how their C-corp holdco recycles cash from one company up to the parent and back down into the next acquisition, why they underwrite to a 25% free cash flow yield instead of an EBITDA multiple, and the two constraints that actually cap their growth: cash from operations and the right CEOs to run what they buy. Nine platform companies, thirty-plus acquisitions, and a structure built to never have to sell.
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## Top 10 Takeaways- Most exit paths force trade-offs between cash, legacy, and speed. A long-term holding company can thread all three.
- A C-corp holdco only makes sense if your highest priority is compounding capital, not distributing yield to yourself.
- Boring cash-flowing businesses are the backbone of the real economy, and they get ignored at every cocktail party.
- Recurring revenue is nice. Reoccurring demand (a tourist town, a weekly grocery store PO) can be just as durable.
- Your business needs working capital, and then it needs emotional capital. Know the difference before you sweep cash up.
- EBITDA can lie if capex eats half of it. Free Cash Flow is the number that funds the next acquisition.
- Most owners can’t read their cash flow statement. That’s why positive net income still runs you out of cash.
- Deploy excess capital inside the company you already own first. Capex, then tuck-ins, then a new platform.
- Define what success looks like before you take the meeting. The right buyer depends on what you actually want.
- The two real constraints on a holding company: cash from operations and CEOs ready to run what you buy.
Sound Bites
“Our highest priority is long-term compounding of capital. We wanted a structure where any profit, any capital essentially stays in the company.” (@TBD) — Trish Higgins
“Business owners are going to be the most successful in their sale if they first define what success looks like to them.” (@TBD) — Trish Higgins
“We have worked the best with owners who could sell to a competitor but don’t really want to. They care about their business in a different way.” (@TBD) — Trish Higgins
“You make a million of EBITDA but you have to spend five hundred thousand dollars in capex every year. That’s not on the income statement. You only have five hundred thousand dollars of cash flow.” (@TBD) — Trish Higgins
“How are you running your damn business if you’re not running your damn business?” (@TBD) — Ryan Tansom
About This Episode
Trish Higgins is the co-founder of Chenmark, a Maine-based holding company she started in 2015 with her husband James and her brother-in-law Palmer. All three left careers in traditional finance (Trish came from a macro hedge fund, James from currency trading, Palmer from equity research) to buy and hold small, cash-flowing businesses for the long term. By the time of this conversation, Chenmark owned nine platform companies and had closed more than 30 acquisitions across landscaping, snow removal, food manufacturing, tourism, and other industries most investors overlook. No fund. No end date. A pure compounder.
Resources Mentioned
- Chenmark — Trish’s holding company. — chenmark.com
- AQR Capital Management — The quantitative asset management firm Trish worked at after business school.
- Permanent Equity / Brent Beshore — Referenced as another long-hold buyer in the space.
- Section 1202 — Tax code provision providing capital gains benefits on qualified small business stock.
- The Snowball by Alice Schroeder — Ryan’s favorite Buffett biography, referenced in the close.
Connections
Phase + Module:
- Module 3 — Owner’s Playbook — Exit options and the personal definition of success that drives the right buyer choice
- Module 4 — Sustainable Financials — Cash flow statement literacy and free cash flow underwriting
Milestones:
- Milestone 10 — Three-Statement Model — The closed loop Trish underwrites against, not just the P&L
- Milestone 13 — Strategic Plan — Long-term capital allocation across a portfolio of cash-flowing businesses
Concepts referenced:
- Free Cash Flow — The 25% yield Chenmark underwrites to, not an EBITDA multiple
- Normalized EBITDA — Why it overstates cash in capex-heavy businesses
- Three-Statement Model — The cash flow statement most owners never look at
- Capital Allocator — Trish’s actual job inside Chenmark, separate from operating any one company
- Three Lenses of Value — Different buyers see your business differently, and the right one depends on what you want