By: Bella Carrington
Private equity deals often conjure visions of mega-funds and high-risk equity plays, but Jeremy Tomes is rewriting that script. He’s built a capital strategy that sidesteps the need for massive outside equity while retaining control, protecting downside, and still scaling fast. His secret? A sophisticated but disciplined debt-driven acquisition model, explicitly crafted for “boring” service businesses that print cash. While other investors raise capital through LP commitments or dilute through complex equity structures, Tomes leverages a stacked approach: senior bank debt, seller notes, working capital lines, and strategic reinvestment. The result? Efficient closings, aligned sellers, and durable businesses that don’t rely on risky valuations or unrealistic growth projections.
Let’s go inside the stack.
Layer 1: Senior Lending as the Foundation
The majority of Jeremy Tomes’ transactions start with senior bank financing—typically conventional or SBA 7(a) loans for qualified targets.
Why this route?
- Fixed amortization
- Reasonable interest rates
- Long-term horizons (7–10 years)
- No equity dilution
- Strong cash-flow lending framework
Tomes works closely with regional lenders who understand small business fundamentals and know how to move quickly on real assets like trucks, land, inventory, or equipment. This senior layer typically covers 50%–70% of the purchase price, creating a stable, predictable financing floor.
Layer 2: Seller Financing to Align Interests
Next comes the seller’s note, a Tomes signature.
Instead of insisting on all-cash deals, Jeremy invites sellers to leave money in the business, typically 10%–30% of the total purchase price, paid out monthly or quarterly over 3–5 years.
Why it may work:
- It lowers upfront cash needs
- It keeps sellers emotionally and strategically engaged
- It rewards sellers for strong post-sale performance
- It serves as “skin in the game” without requiring board seats or voting rights
Seller notes often include zero to low interest and are subordinated to senior lenders, making the bank happy and the seller incentivized. In some cases, the note is paired with a consulting agreement or performance-based earnout, ensuring continuity during the first 12–24 months of transition.
Layer 3: Working Capital Lines to Fund Growth
Tomes doesn’t just buy and sit; he scales. And that requires working capital.
To fund inventory, receivables, equipment, and operational upgrades, he secures lines of credit or asset-based facilities that allow his companies to:
- Take on larger jobs
- Shorten accounts payable gaps
- Prepay vendors for discounts
- Purchase trucks, trailers, or inventory in bulk
This flexible third layer allows his portfolio companies to expand without choking cash flow or begging for more investor capital. It also preserves margin because he can negotiate better terms with vendors, offer tighter lead times, and win larger RFPs.
Layer 4: Strategic Equity, Not Institutional Dilution
Jeremy Tomes rarely brings in outside equity, and when he does, it’s not traditional LPs. Instead, he builds strategic partnerships:
- Co-investors who bring customer relationships
- Minority owners who offer operational leverage
- Team members are rewarded with phantom equity or bonuses tied to EBITDA
This avoids the bureaucratic drag of multi-layered governance while still giving key stakeholders upside. It also means his acquisitions remain nimble. There’s no fund pressure to exit on a clock. Deals are built to endure, not just “flip.”
What Makes Tomes’ Capital Stack Work?
- He Acquires Cash-Flowing Businesses. These aren’t pre-revenue startups. They’re established operators with:
- 10+ years of history
- Real customers
- Physical infrastructure
- Predictable margins
This makes lenders comfortable and allows the debt to be serviced through ongoing operations, not financial gymnastics.
- He Avoids Over-Leverage. Unlike some PE firms that stretch debt into dangerous territory, Tomes caps leverage around 2.5–3.5x EBITDA, ensuring businesses stay healthy and flexible post-close.
- He Doesn’t Chase Multiple Arbitrage Tomes is focused on real value creation—margin expansion, operational improvement, and procurement leverage—not speculative exit multiples.
Risk Mitigation Through Structure
Because Tomes builds redundancy into every deal, downside risk is managed from day one:
- Conservative debt service ratios
- Flexible repayment terms on seller notes
- Embedded cash flow forecasting
- Operational reserve buffers
- Lean but functional back-office automation
He also builds in transition support: often requiring sellers to provide 3–6 months of training, ensuring handoff continuity and customer retention.
The Big Advantage: Control Without Dilution
Perhaps the greatest strength of Jeremy Tomes’ capital stack is this: he keeps control.
Without equity dilution, he maintains:
- Strategic direction
- Flexibility to pivot without board votes
- Autonomy to reinvest profits in growth
- The ability to hold long-term or recapitalize when he chooses
That autonomy is rare in today’s PE landscape, and it’s part of why sellers and partners trust him.
Conclusion
Jeremy Tomes isn’t just acquiring businesses. He’s designing deals that are built to last, deals that minimize dilution, maximize alignment, and prioritize long-term sustainability over short-term spectacle. Jeremy Tomes has built a private equity platform known for its durability and efficiency.
To learn more about Jeremy Tomes and his deal structure philosophy, visit https://biglawcapitalist.com/jeremy-tomes/
Disclaimer: The content presented in this article is for informational purposes only and does not constitute financial or investment advice. The views and strategies expressed herein represent the personal opinions and methods of Jeremy Tomes and may not be suitable for all individuals or entities. Readers should consult with professional financial advisors, accountants, or legal counsel before making any investment or business decisions. Any investment involves risks, including the potential loss of principal. The strategies discussed are based on specific scenarios and may not be applicable to other situations. Past performance is not indicative of future results.
