Entrepreneurship Through Acquisition: Key Lessons From Dan Hennessey

In this episode of The Transaction Abstract Podcast, Joe Hellman sits down with Dan Hennessey, the newly appointed CEO of Sam Schwartz Pedestrian Traffic Management Services, Inc. Dan is a former M&A professional who successfully completed his own Entrepreneurship Through Acquisition (ETA) search. Drawing from years of deal experience on both the banking and private equity side, and now as an operator, Dan shares practical insights on everything from sourcing a business and building credibility to navigating financing and preparing yourself to step into ownership.

Why Choose Entrepreneurship Through Acquisition?

For Dan Hennessey, the path didn’t begin in the boardroom; it started years earlier with advice from his father and grandfather about the freedom and fulfillment that come from owning a business. After a decade in finance, investment banking, and private equity, Dan reached a crossroads: continue pursuing the traditional PE track, or take a more entrepreneurial route to build a career and a life on his own terms.

He found himself asking, “Do you continue to go down the finance path, where you try to rise the ranks of a pretty difficult world of private equity and investment banking? Or, do you go down the other route, where you have something more fulfilling? Maybe with a little less upside, but a higher likelihood of a positive outcome, controlling your own destiny with your personal life?”

Seeing peers achieve both meaningful family time and financial success through business ownership gave Dan the confidence to explore ETA. He chose a path where the likelihood of a positive outcome felt higher, even if the upside looked different.

Finding the Right Business

Rather than searching broadly, Dan used his background, deal experience, and time working with an independent sponsor to guide his approach. That exposure prepared him to navigate the entire process, from sourcing opportunities to evaluating founder-led companies, and ultimately, closing on the right business.

Dan explains that the ETA world offers plenty of opportunity, especially in the lower-middle market, where businesses in the $5–15 million range are transitioning out of baby boomer ownership. He emphasizes one thing above all else: credibility. People need to believe you can actually close. Whether the seller is a founder or a family, trust drives everything.

How Do You Build Credibility as a First-Time Buyer?

For Dan, credibility came from two places:

1. Leveraging past M&A experience. Working with an independent sponsor created a natural “front door” that helped establish legitimacy with brokers and sellers.
2. Not searching alone. He brought his brother-in-law, a partner in a PE firm, into early meetings. Simply having a second experienced voice in the room shifted seller perception immediately. “If you have two people who walk into the room versus one, it makes a tremendous difference,” Dan explains.

Many searchers underestimate how important this is. Sellers want to know you’re capable, serious, and supported.

The Challenge of Financing Your First Deal

Even after finding the right business, securing financing isn’t straightforward. Dan describes it as a classic chicken-and-egg problem:

• You need investor commitment to present a strong offer.
• But investors want to see real information before they commit cash.

Searchers often have to run both tracks in parallel, giving sellers confidence you’re “good for the money” while also assembling capital quietly behind the scenes. Strong lender relationships matter as well. Being able to bring a financing partner to the table who is willing to fund 30–60% of the deal sends a powerful signal to a seller.

Running a One-Person Process

Unlike private equity teams with full diligence staff, searchers often juggle sourcing, analysis, financing, diligence, and negotiation themselves. Dan solved this by intentionally pulling in trusted partners early, both to accelerate the process and to avoid blind spots.

He also learned how to keep multiple tracks moving at once, from sourcing deals and securing lender relationships to lining up potential investors well before he signed an LOI. Managing these pieces in parallel, rather than sequentially, gave him a real edge in staying credible and competitive.

None of this came together overnight. His approach was years in the making. “It was the culmination of 10–15 years of experience,” he shares, the result of doing deals, learning operations, and gaining the confidence to lead a company.

When to Start Spending Real Money

Every searcher hits a moment when belief turns into commitment. For Dan, this came after signing an LOI and going exclusive in a competitive process.

Diligence expenses, from QofE to legal, hit much harder for an individual than for an institutional buyer. That’s why he front-loaded his red-flag testing with Joe Hellman from Redpath early on. Before paying large fees, he wanted to be confident the business was real, the numbers were reliable, and the seller was aligned.

Advice for New Searchers

Dan offers a grounded perspective for MBA students and future ETA operators:

• Know your skill set. Be honest about what value you bring post-close. If you're not strong in sales, operations, or finance, make sure the business doesn’t rely heavily on the skill you lack, or be prepared to fill the gap quickly.
• Understand what the business needs once you own it. Many searchers come from finance backgrounds, but running a company requires a different muscle: revenue, people, and daily execution.
• Build strong relationship equity early. Sellers, brokers, and lenders all want and need to trust you. Credibility is the currency that moves a deal forward.
• Prepare for a long journey. A thoughtful, experience-based process takes time, often years.

Key Takeaways

• ETA is a compelling path for those seeking ownership, autonomy, and fulfillment.
• Credibility is the single most important factor in sourcing and winning deals.
• Build a small, trusted team early. Don’t search alone.
• Financing requires running investor and lender conversations in parallel.
• Don’t spend heavily on diligence until you’re confident the deal is viable.
• Success post-close depends on knowing your strengths and filling the operational gaps within the business you buy.

Listen to the full episode of The Transaction Abstract Podcast to hear more of Dan Hennessey’s firsthand experience, lessons learned, and advice for future ETA entrepreneurs.