💎 1 woman. 50 fake IDs. And an egg business.

This is one of my favorite stories of all time.

It’s about a woman who bought an old-school “egg carton” business that does $20M+ a year (with no money down).

Our Hero: Sarah Moore

• Under 30 years old

• Had no money, no experience, and her biggest asset was her car (a RAV4)

• Spent 1 year hunting through 20,000+ businesses to find ONE to buy

• Bought a $20M+ business called EggCartons.com

• Bought it with all debt aka zero $ down

I tried doing research, but there’s no interviews about this online.

Only a small blurb, but no podcasts, no interviews, no newspaper articles.

So I did the next best thing - I created a google doc with a bunch of questions, and emailed it to her, asking if she’d fill it out.

…to my surprise - she did.

I loved her answers, so I’m going to share her answers word-for-word below:

You bought eggcartons.com (alone? Or as part of a PE firm?)

Alone-ish. I started a PE firm alone specifically to buy a business, but this wasn’t your typical PE firm.

My “office” was my undergrad library and there was no fund (deliberately)

I had a lot of help – over 50 unpaid interns most of which came from craigslist. We had to sift through and reach out to over 400,000 private companies for 1.5 years to find eggcartons.com

Why the heck did you buy it (aka what about the business made you want to buy it. E.g. great name, high customer retention etc.)

My goal was to buy a business with all debt so that I could retain 100% ownership. I had no collateral except for my 2012 RAV4 though.

I was hoping to find an undeniably stable business so that I could pitch to a bank that the real “collateral” = the historical cash flows of the business.

This business fit the bill because:

It had been profitable since it started in 2001

High barrier to entry given the domain name and 100+other similar domain names (eggcartins.com, eggcarton.com, etc) that the founder strategically purchased

Simple enough that someone with zero operational experience and average intelligence could operate if they tried hard enough

I live in silicon valley and talk to people who are obsessed with crypto, artificial intelligence etc…They would underestimate eggcartons.com, can you give us a sense of the scale of the business (eg. revenue north of $10M+)

I’m in the midst of something that precludes me from sharing figures publicly. All I can say is that our revenue is less than 50 million.

How did the negotiation/deal go down to buy it

There’s a lot of context which I’m not sure you want to hear.

In sum, I harassed this owner until he replied. We hit it off. Came up with a valuation together. I then contacted over 100 banks (most of which told me to F off) until 1 of them threw me a bone and agreed to an uncollateralized loan. Final deal was 75% bank debt and a 25% seller’s note.

Before buying the business, I overpaid an accountant to check my work and do an audit because I had no idea what I was doing. His fees were rolled into the deal.

Any other fun tidbits or anecdotes about it that I could share on the pod that would amuse people?

• I participated in several research studies to make money while searching for a business. I went legally blind from a deodorant study for a bit so I had to take a break from work until I could read things again.

• Our response rate was awful. I started doing borderline insane things to get a reply. At one point, I took a photo of myself wearing a sweatshirt that said “I want to buy your business” with a massive grin and faxed it out to thousands of businesses. To this day, I run into owners who recognize me from those faxes. One of those owners is now my neighbor.

• The library we worked out of during my search required a school ID to enter. Most of my interns didn’t go to that school so we had to get fake IDs for all of my interns...to get into a library. Every time we hired there was a lag because we needed time to get more ID’s.

• Before covid, I used to have to fly to China and India to examine egg cartons. On my first trip to India, I got held by Indian customs and interrogated for hours because they didn’t believe that I was coming to India alone for the sole purpose of examining egg cartons.

• Related to India - I almost got killed there. I rejected a shipment from a vendor in Northern India. The owner’s entire family was there. He was furious and started chasing after me. My hotel had to put me in incognito mode for my safety. If my driver hadn’t been right at the door that I ran out of, I’d probably still be there, 12 feet under.

• When I bought this business, I considered it an “egg company” ,but I now think of it as specialty packaging. 40% of our business comes from things entirely unrelated to eggs. You would be very surprised by our customer base – Think Boeing, SpaceX, Disney, Madison Square Garden, Crayola, Magnolia Bakery, EOS, etc. Anything that requires protection and separation is fair game.

- shaan

P.S. Remember, no small boy stuff today.

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