Tripling Revenue After a Self-Funded SBA Search | Chris Williams, System Six

Folks, we're in for a really special treat this morning. I'm incredibly excited to introduce you to Chris Williams. Chris is the CEO of System Six, a tech-enabled remote accounting and finance firm serving over 300 small and medium-sized businesses. Before acquiring System Six in 2021 through search, Chris worked in private equity at TPG, one of the world's largest private equity firms, where he did real estate transit acquisitions. He earned his MBA from Stanford GSB, where he was introduced to the ETA model. Rather than raising a traditional search fund, which many GSB folks do, Chris self-funded his 10-month search while still working with investors from day one, and used an SBA loan to acquire System Six, retaining over 70% equity in the deal. Since acquisition, Chris has more than tripled revenue by vertically specializing in serving acquisition entrepreneurs like himself, and expanding deeper into controllership and tax services. He's grown System Six into a fully remote operation in over 25 states and three countries. In 2025, they made the Inc. 5000 list. Chris is also a returning SMBash speaker this year, so welcome back to the SMBash stage.

Chris: I actually found my SMBash socks from 2022 in my suitcase. Should've worn them today. Excited to be back. When you lay it all out like that, it's crazy. Time flies. I had a daughter a year and a half ago, and last year coming here was the first time I had traveled, and I can't believe that was a year ago. Buying a small business, the rollercoaster that it is, is incredibly energizing and incredibly fun. It's also incredibly hard and stressful. You will not ever, in this ecosystem, feel bored.

Interviewer: I've never told you this, but you did an episode of Acquiring Minds back in 2021. I remember listening to it at the time. I was newer to ETA and getting into the community. I was working for a large real estate private equity firm, and I had previously worked with SMB accounting firms. I thought, what an opportunity this guy has. Over the past couple of years, it's been great to get to know you.

Chris: That's indicative of how welcoming this community is. Even if we're competing for deals and service providers, it's a really loving place. Patrick from Apple Tree is in the room and has personally helped me in a lot of ways. There's a ton of small businesses out there, so it really feels like there's room for everybody. I've been in other business communities, private equity, et cetera. This feels much more friendly and collaborative, especially when you're stepping into something new. I'd never run a business before. It's important to be in an ecosystem where people will help you.

Interviewer: Take us back to when you were in PE. What put this crazy idea in your head to go buy a small business?

Chris: Buying a small business wasn't as well-known then as it is now. The first thing was, the last couple of months before I went to business school, I spent three to four months every other week at a company we had bought in Denver. They had never done financial reporting before for investors, so I spent a lot of my time helping stand up that monthly cadence. I just realized I liked being closer to the action. I looked at my bosses, who I enjoyed working with. I'm not someone who thought PE was a miserable experience. But I felt that as you get more senior in your investing career, you get pulled away from the day-to-day. You're sitting on boards. You're doing thematic stuff. After spending a few months really working inside of a 100-person company, I enjoyed how quickly you could feel like you got stuff done.

When I went to business school, I was going to explore that. I discovered search at Stanford. It's a big part of the ecosystem there, and I spent my whole two years exploring the entire ecosystem. One useful piece of career advice I got going into grad school is to pay attention to what energizes you. Even here, there's a bunch of different flavors of buying a small business. I just got fired up listening to people talk about their stories, their highs and the lows. That's ultimately why I decided to go do it.

Interviewer: Tell me your thought process in eventually going self-funded instead of traditional search.

Chris: I'm not here to knock traditional search. I have a lot of friends who have done it and been super successful. Everything in life has pros and cons. For me, it was two main things. One, you can knock traditional search for maybe a lack of creativity. You go on the websites of 10 traditional searchers and they all look the same. They have many of the same investors, some of whom ultimately invested in my business, some of whom we work with because we serve their portfolio companies. It felt like a lot of people were doing the same thing.

Second, when you do a traditional search, you narrow what you can buy. Investors have a more defined box of what they want to invest in, and for the math to work, you need to buy a bigger business. That's getting harder as more private equity comes down into the lower market. I also had geographic constraints. My wife was in grad school. We're very much Northern California life. We have siblings and parents around, so I knew I wasn't going to move across the country. Self-funding allowed me to look at smaller businesses, gave me more opportunities to find something, and allowed me to focus geographically.

At the end of the day, you get more optionality. There's danger in that. I definitely spent some time chasing shiny objects I never should have looked at. In a traditional search, investors won't let you spend time on that. If you can self-fund, you give yourself more options, but make sure you don't use that to look at stuff you should never touch. Time's the most important thing you have, especially in self-funded search.

There are five or six proven models where you can find case studies of people who have absolutely crushed it and people who have failed. You have to figure out what resonates with you. The last thing I'll say: I think it's great to self-fund, but don't be afraid to buy a bigger business if you find it, even if that means you'll own less. That's not what I did. I did the SBA. I own a lot of it. But if you find two and a half million of earnings that you can only own 25 to 40% of, at least think about it. There are benefits to buying a bigger business.

Interviewer: You retained over 70% equity. How important was that in hindsight?

Chris: It creates some safety once you get past the fact that you have a massive personally guaranteed loan. Doing a self-funded deal using an SBA 7(a) is personally riskier than a traditional search because you're taking out a personally guaranteed SBA loan. I have a lien on our house. If things go bad, there's real risk. But once you get past that, owning more of your business takes a little pressure off in terms of how much you need to grow. In traditional search, you own less, so there's more pressure to grow to create the equity value you want. In self-funded search, when you own more, you also have more control, and that's nice.

Interviewer: You were still very active with investors from day one. What was your strategy?

Chris: I had two investors I had met in school, and I was basically talking to them once a month. I'd send them a summary of what I was looking at. I was a 28-year-old kid who didn't really know what he was doing. Why would I not want professional people who have seen hundreds of small businesses around me? It was about trying to protect myself from making a bad decision. Once you get a deal under LOI, there's a ton of investors you can go to, but I wanted to make sure I was looking at good industries and sourcing effectively.

Interviewer: You sourced proprietary, which a lot of self-funded searchers want to do and probably shouldn't.

Chris: That came from two things. In traditional search, most people are doing direct outreach to find the business they buy. That's the ecosystem I knew. All my friends searching were on a monthly Zoom call doing outreach, so I was doing that. I did spend about 20% of my time looking at deals through the broker channel. Jackie's in the house. There are great brokers out there. Brokers were a great way to learn different industries and get exposure.

In professional services, where I ended up buying, trust with the seller is the second most important thing. Buy from a good person. When you do a direct deal, you have more time to build that trust. I spent a ton of time with my seller before we even signed an LOI. It's definitely riskier because doing direct outreach is lower volume. I bought System Six after 10 or 11 months, but if I hadn't bought System Six, I was back to absolutely zero. The pipeline dries up really quickly when you're doing direct outreach. It's a great way to do things, but it decreases your chance of getting a deal done.

Interviewer: You've said you can change everything about a business, but you can't change the industry that it's in. How did that guide your search?

Chris: Industry and who you buy from. Most of us in this room have never bought and run a business before, so you're probably going to come in and not be the world's best owner/CEO. Given that dynamic, and that you're buying a small business, which is exposed more than a medium or big business to industry waves, it's incredibly beneficial to be in an industry that's growing, that has momentum. You want recurring revenue and not a ton of customer concentration too. For me, it was, I want to buy a business where I think it's not going to be incredibly hard to grow.

When I was searching, investors' content was dogmatic: you have to buy in a good industry, you have to have recurring revenue, you have to have low CapEx. You can't have everything, but being in a good industry, investors pound the table about that, and I think they're right. You cannot change the industry you're in.

Interviewer: Those are known attractive industries where multiples aren't as attractive. How do you reconcile that?

Chris: There are two paths. You can play, hey, I want to buy a business with a low multiple and own more, but know you're signing up for more of a knife fight. For me, I wanted to feel like I could grow something significantly and build a team. I paid north of five times earnings for System Six. Different interest rate environment, harder to do that now, but I absolutely paid more. I own 70%, not 85 or 90%. I paid more to be in a growing industry, and I would do that trade all day long. I also didn't use max leverage.

Interviewer: You passed on System Six the first time you saw it.

Chris: Probably could have paid a little less if I'd bought it the first time. Two things were a turnoff. One, it was small. $2.5 million revenue business, 18 people. I was three months into search and still thought I was going to find perfect. You're not going to find perfect. In hindsight, I got more comfortable with buying small. Also, bookkeeping businesses have churn. Once you add tax, that goes away, but there was customer turnover. I was looking for 95% customer retention, the box investors talk about. After looking at more deals, I realized it was actually pretty good. The other lesson is I stayed in touch. I felt a connection with the seller, Jeremy. We traded a few emails in between, and that kept it warm.

Interviewer: Take me through the first 90 days, the first year. Was it all you expected?

Chris: A benefit of doing direct outreach: everybody in the company knew the deal was happening. I had met a lot of the leaders a couple of months before close. We've done two more acquisitions since, and one was a different experience. In System Six, there wasn't the shock and awe of, hey, I just sold the business, here's the new guy.

I still had surprises. Even with trust with the seller, we've done three acquisitions, and every single time, the seller is doing more than I thought pre-acquisition. I wouldn't call that misrepresentation. The things they're doing in half an hour take me much longer to make a decision. Plan for that.

Two months in was the first time we had someone put in their notice. I was like, oh my God, this is going to break the business. Sleepless nights. You pretty quickly learn these things are more resilient than your gut feels. The first time you get punched, don't brush it away, but recognize you're probably reacting more severely than reality.

Try to deliver when people are skeptical of you. I definitely got some shade from a couple folks internally out of the gate. Everybody says don't make changes early. I agree. Don't make significant changes or change something just because somebody asks for it. But go find things really quickly that you can do that will improve the business and try to get wins on the board. I went out and started talking to clients really fast and selling really fast. Bringing in new customers quickly created momentum and trust with the team.

Interviewer: Sometimes you have to move on from people, and sometimes people move on from you. How do you manage that while keeping culture intact?

Chris: Christian, my coach, has called me out on needing to be willing to move on from people once they've shown you the signs quickly. That can be uncomfortable. They may feel it's really unfair, but you can look yourself in the mirror. We're going through this right now, talking about extending healthcare severance for a couple extra months. There are ways to fire people humanely. Our head of HR is involved, and I want her to see how we treat people. We've turned over more than half our team as we've grown. Some of it has been people not wanting to do what the new business is doing. Treat your people the right way, but what the business needs is ultimately most important.

Interviewer: System Six was fully remote when you acquired it. Talk about how that shaped your early days.

Chris: If you run a remote business, you can't try to treat it like an in-person one. We do a monthly all-hands on Zoom, but we don't do a ton of forced awkward Zoom happy hours. A lot of our team wants to work in a remote business. A lot work 30 to 35 hours so they can pick up their kid from practice. We don't force certain hours. Recognize that remote culture is different. You do need to track it. We have weekly metrics at every level. At times, people have abused the remote component, and we can catch that within a couple of weeks because we have productivity metrics, not screen button clicking, but how much revenue should you be managing for your position?

We do a ton of internal surveys. In an office you can tell someone's frustrated. It's harder to pick that up remotely. We ask for a ton of feedback in different ways so we can bubble stuff up before someone puts in their notice. Sometimes people get annoyed by how many surveys we send, but it's important.

Interviewer: You weren't an accountant. How did you familiarize yourself with the accounting work?

Chris: Try to buy a business where you have some tangential experience. I wasn't an accountant, but I spent a lot of time in Excel and P&L statements, so my learning curve was less steep. If you have to buy a business where you'll be in delivery a lot as the owner and it's something you know nothing about, ask yourself if that's the right business. If I had to be doing accounting 40 hours a week out of the gate, that says something about how scaled the business is.

Once you get in, you hear people say, in home services, go ride in the truck. You can do the same in our business. I went through a customer onboarding with a new client and Zoom shadowed people doing different parts of the job. Talk to customers and understand what they value.

Interviewer: How do you build trust as you're shadowing people?

Chris: Super transparent. I told people, I'm not an accountant. I'm not here to tell you how to do your job or use QuickBooks better. I'd love to shadow you on this project so I can understand how you spend your time and find ways to improve your experience. Our number one mission is making this a better work environment. Our people are really the product, so how can we serve them better?

Interviewer: Was there a moment where you thought, what did I get myself into?

Chris: Modern remote accounting firm, that's what I thought I bought. We were still sending out proposals in Microsoft Word, converting to PDFs, getting clients to type their bank information into the PDF and send it back through a secured file share. The scarier thing was when the first person quit, I realized we had much more one-client-to-one-person than I thought. The seller had talked about a team-based service model. We had some of that, but a lot of one-to-one. You lose a team member, and in theory they've documented stuff, but not everybody does. That creates customer risk quickly in a professional services business. Now all our clients have two to three people working on them at different levels, even small ones, for redundancy and knowledge share. Margins are lower, but I'm less scared about team transition.

Interviewer: How do you grapple with AI and technology?

Chris: I'm worried about it if I'm being 100% honest. It's moving incredibly quickly. I diligenced AI risk when I bought System Six and talked to board members of big bookkeeping AI companies like Pilot. It wasn't a huge risk then. Obviously ChatGPT and Claude have changed things over the last six to nine months. It's a huge opportunity in the short to medium term. We're starting to use things internally. We're hiring soon for a professional AI builder inside our professional services business.

Five years from now, accounting isn't going away. Small business owners are always going to want to talk to someone, not a robot. But 50 to 80% of our work might be able to be done by technology, and that's going to mean change. What does that do to pricing? What does that do to exit multiples? Accounting has more risk than home services. I feel more pressure now than nine months ago to build faster and get to scale faster. When I bought System Six, I thought I'd own it for 20 years. I have to be realistic.

Interviewer: You've tripled revenue since acquiring. What are the biggest levers for growth?

Chris: We've grown revenue. We have not grown profitability a ton because we've spent to grow revenue. One, find a market where your services resonate, and flood that market. If you want to grow, get aggressive. After I bought System Six, I realized a lot of folks buying small businesses are going to need help with accounting post-close. Often the owner or owner's spouse is doing accounting, or a local CPA or bookkeeper who will go away with the transaction. The new buyer has higher expectations, needs better financial reporting. There's a need for better accounting in these rooms. I went to a ton of conferences, advertised on a podcast. Figure out your niche and throw a lot of resources at it.

You meet a lot of business owners proud they don't have sales and marketing spend. Oh, I grew 10% last year and didn't spend a dollar on marketing. Well, what if you spent $100,000 on marketing? You have to be willing to cut margin and not over-lever so you have the ability to do that.

Interviewer: You've also added services.

Chris: When I bought System Six, we were primarily serving $2 to $5 million revenue businesses doing bookkeeping, processing payroll, paying bills. That's still our core today. Two things happened. Through the search ecosystem, we had clients outgrow us or buy bigger businesses we couldn't serve. So we launched a mid-market service line about a year ago with controllership services, serving NetSuite businesses with a bigger offshore component. We were turning away business.

We bought a tax business about six or seven months ago. We were losing customers and prospects to all-in-one bookkeeping and tax. We responded by launching tax through acquisition. That service line was negative gross margin for the first couple months because we had to hire a team. You have to be willing to cut profit to go after new service lines, and have the structure and not too much leverage to do that.

Interviewer: Build versus buy for new service lines?

Chris: Organic growth is always the cheapest way, but it takes longer. With tax, average revenue per customer is smaller, so building to million-dollar scale would have taken much longer than buying. Acquisitions are more expensive, but you get to scale faster. How quickly are you trying to move? How much additional risk are you willing to take?

I came from private equity. I was in love with deals. I still have deal fever. We've done two acquisitions. One has been awesome. One has been a little mixed, even with buying stuff with the exact same tech stack. Putting people together is hard. The biggest thing about acquisitions: you can't hire the people you're getting. There are probably people you're going to buy that you wouldn't hire, and that creates challenges.

Interviewer: You sign off every email with keep building. What does that mean?

Chris: One of the most important things you can do is elevate the standard and ambition of the business. I talk all the time about getting 1% better every day. We have to have a growth mindset. That's one of our core values. I want people to understand in every communication that there's energy and emotion at System Six, that we're striving and pushing. How can you instill cultural ambition? I want us to be a group trying to build, move, and grow. When we get punched in the face, we had a tumultuous thing happen a couple weeks ago, I've been impressed with how some people responded: okay, let's deal with it, how can we make this better? That comes from perpetually laying the groundwork. I was tired of signing emails warmly or best. What does that mean?

Interviewer: If you could talk to 2021 Chris before acquiring, what would you tell him?

Chris: Don't chase shiny objects once you've bought the business. Really understand what you're buying, and based on what you're buying, what the first couple of years are going to look like. I bought a small business, so the first couple of years meant being in the weeds and not growing as quickly as friends doing roll-ups. The path you've signed up for is to grow this organically, really aggressively for a couple years, be in the business, hire better, focus. I spent some time looking at acquisitions in the first couple years that were much bigger than us. Waste of time. I'd love to have that month back. People with pretty aggressive focus move the ball quicker.

Audience Q&A

Q: What are examples of things you do to make employees' lives better?

Chris: Once we got over the nervousness of, hey, there's a new owner, it became clear the previous owner had been a little checked out, not growing the business as ambitiously. Good people want to grow and want opportunity. We started growing and investing, which removed frustration for people who had felt, where's my job going to go? There are benefits to scale. We have fewer individual-to-client setups, so people feel they can take vacation more securely. We've added pieces of technology. The biggest difference is people feel our culture has stayed the same, we're trying to give you a good work experience, but we've added the opportunity to grow.

Q: Can you talk about your equity stack and where you raised capital?

Chris: Pretty traditional self-funded structure. Outside investors, a couple folks I knew through the traditional search fund world who were also open to investing in self-funded search. This is a good ecosystem to invest in, so you don't need to go to a search fund investor. There are a lot of people interested in putting money behind this. The equity we raised was an 8% preferred return with a two-times step-up. We put in about 15% cash, so investors own about 30% of the common equity. There's an 8% preferred return compounding. We haven't been doing distributions because all dollars after debt service are going onto the balance sheet for future acquisitions and growth. The equity split is 70/30 once we get into common. I put in about 30 to 40% of the cash personally. Not required at all, you could put in a lot less. I had savings from before school.

Q: On buying people you wouldn't hire, can you diligence that?

Chris: Every business reflects the owner. If you buy from a bad owner, you're probably going to have people you don't want on your team. So don't buy it. Other than that, we now know what productivity metrics should look like with good team members, so we can do that during diligence. How many customers is this person working on? You can never do 100% of it. It may not even be that they're a bad team member. They may be a good employee at that company, but in acquisitions where you're not keeping the brand and bringing them into System Six, there are things we do differently that they may not be able or want to do. There's always going to be some risk, which is why M&A isn't a slam dunk versus organic growth.

Q: If you were mentoring a first-time acquirer choosing between a better industry where they have no experience versus a worse industry where they do have experience, what would you advise?

Chris: Unless that better industry is super operationally intense and complicated, I'd recommend going into that industry. I feel very strongly that a rising tide lifts all boats. The search fund model over the last 30 years, traditional and self-funded, has proven that if you're a capable person, an A player, you can figure out being in an industry you don't have a ton of experience in. Is it going to be harder? Yes. But because it's a better industry, you have more opportunity to make mistakes, which you will. Once you get on the other side of that, I'd be in a better industry 10 out of 10 times.