Juncture Capital - Capital at the inflection

There's a growing market for small, profitable infrastructure businesses. $250K-$5M in annual revenue. Clean code. Loyal customers. Room to improve through operational excellence rather than aggressive growth.

Most acquirers don't understand these businesses. Strategic buyers want to bolt them onto existing products. Financial buyers want to extract cash flow and flip them. Neither approach works for infrastructure.

Infrastructure businesses need operator-owners who understand the technical systems and can improve them over time.

This is the playbook we use. It's designed for operators who want to acquire and run infrastructure businesses, not flip them.

Finding Businesses to Acquire

The best infrastructure businesses aren't listed on marketplaces. They're quietly profitable, run by technical founders who are ready to move on but don't want to shut down something customers depend on.

Where to Look

• Indie Hackers (profitable side projects)

• MicroConf community (bootstrapped SaaS)

• Twitter/X #buildinpublic (transparent founders)

• Acquire.com (curated marketplace)

• Direct outreach to infrastructure companies

• Developer communities (GitHub, Stack Overflow)

What to Look For

Ideal Acquisition Profile

Revenue

$250K-$5M ARR, growing or stable

Profitability

Profitable or clear path within 6 months

Margins

60%+ gross margins

Churn

Low (customers find it essential)

Technical Foundation

Clean code, documented, maintainable

Valuation Framework

Micro-acquisitions typically trade at 2-5x annual profit (EBITDA or seller's discretionary earnings). The multiple depends on growth, margins, and technical quality.

Valuation Multiples by Profile

2-3x Multiple

Stable revenue, good margins, some technical debt, requires work

3-4x Multiple

Growing revenue, strong margins, clean code, low churn

4-5x Multiple

Fast growth, excellent margins, technical moat, strategic value

Calculate profit conservatively. Add back founder salary if they're working full-time. Subtract costs you'll incur (hosting, tools, support). The goal is to understand true cash flow.

Example Valuation:

Annual Revenue: $500K

Gross Margin: 70% = $350K

Operating Expenses: $150K

Profit: $200K

Multiple: 3x

Valuation: $600K

Due Diligence Checklist

Due diligence for infrastructure businesses is different from SaaS. You need to evaluate technical systems, not just financials.

Financial Due Diligence

• 12-24 months of revenue data (Stripe, bank statements)

• Customer cohort analysis (retention, expansion)

• Unit economics breakdown

• Churn analysis by customer segment

• Outstanding liabilities or debts

Technical Due Diligence

• Code review (architecture, quality, technical debt)

• Infrastructure audit (costs, scalability, security)

• Documentation review (setup, deployment, operations)

• Dependency audit (third-party services, APIs)

• Security posture (vulnerabilities, compliance)

• Uptime history and incident logs

Customer Due Diligence

• Top 10 customers (concentration risk)

• Customer interviews (satisfaction, pain points)

• Support ticket analysis (common issues)

• Contract terms (cancellation clauses, commitments)

• Integration depth (how hard to switch)

Legal Due Diligence

• Terms of service and privacy policy

• Intellectual property ownership

• Compliance requirements (SOC 2, GDPR, etc.)

• Pending litigation or disputes

• Vendor contracts and commitments

Spend more time on technical due diligence than financial. The code and infrastructure determine long-term value.

Deal Structure

Keep deals simple. Complicated earnouts and clawbacks create friction and misaligned incentives.

Recommended Structure

80% cash at close

Clean, simple, founder gets most value upfront

20% holdback for 3-6 months

Covers any undisclosed issues, released after transition

30-90 day transition period

Founder helps with handoff, paid separately

Avoid earnouts tied to future performance. They create misaligned incentives and complicate the relationship. Pay fair value upfront based on current performance.

The First 90 Days

The transition period determines success. Move deliberately. Don't change everything at once.

Days 1-30: Learn

• Shadow the founder (watch how they operate)

• Document everything (processes, decisions, tribal knowledge)

• Talk to customers (understand their needs and pain points)

• Review all systems (code, infrastructure, tools)

• Identify quick wins (low-effort, high-impact improvements)

Days 31-60: Stabilize

• Take over operations (support, monitoring, deployments)

• Improve monitoring and alerting

• Document runbooks for common issues

• Set up proper backups and disaster recovery

• Communicate with customers (introduce yourself, reassure)

Days 61-90: Improve

• Implement quick wins identified in first 30 days

• Optimize infrastructure costs

• Improve documentation and onboarding

• Plan larger improvements (technical debt, new features)

• Establish regular communication with customers

Operational Improvements

The value in micro-acquisitions comes from operational improvements, not aggressive growth. Focus on making the business better, not bigger.

Infrastructure Optimization

Most small businesses overpay for infrastructure. Right-size servers. Implement caching. Optimize database queries. Use reserved instances. These improvements can reduce costs by 30-50%.

Margin Expansion

Improve margins through efficiency, not price increases. Better infrastructure utilization. Automated operations. Reduced support burden through better documentation. Each improvement compounds.

Customer Retention

Small improvements in retention have huge impact. Better uptime. Faster support response. Proactive communication. Regular feature updates. These keep customers happy and reduce churn.

Technical Debt Reduction

Pay down technical debt systematically. Not all at once, but continuously. Each improvement makes the system more maintainable, more reliable, more valuable.

When to Grow vs. When to Optimize

Not every acquisition should focus on growth. Some businesses are better optimized than scaled.

Optimize When:

• Margins are below 60%

• Infrastructure costs are high

• Technical debt is significant

• Support burden is heavy

• Churn is above 5% monthly

Grow When:

• Margins are healthy (>70%)

• Technical foundation is solid

• Churn is low (<3% monthly)

• Market opportunity is clear

• Unit economics support growth

Most micro-acquisitions should focus on optimization first, growth second. Get the foundation right, then scale.

Building a Portfolio

The real leverage comes from acquiring multiple infrastructure businesses. Operational knowledge compounds. Infrastructure can be shared. Customer relationships create cross-sell opportunities.

Each business you acquire makes you better at acquiring and running the next one.

Start with one. Learn the playbook. Improve operations. Then acquire the next. Build a portfolio of profitable infrastructure businesses that compound value over time.

This is how you build wealth as an operator. Not through one big exit, but through multiple small acquisitions that compound quietly over decades.

If you're considering selling an infrastructure business or want to learn more about micro-acquisitions, let's talk.

Jarred Taylor

Capital at the inflection.

The Micro-Acquisition Playbook