Chandra Rao built a 5-business holdco to $3M EBITDA on credit card debt and scar tissue

The Setup Chandra Rao did not start with a thesis deck or a search fund LP list. He started with a friend selling a small SaaS business and a stack of zero-interest credit card offers. The price was $60,000. The financing was plastic. The bet was that owning cash flow, even a sliver of it, would teach him more than any salary job. That first deal worked well enough to convince him the model was real. It also introduced him to the operational whiplash of buying small businesses, where the seller's narrative and the post-close reality rarely line up. He brought in Colin as a partner, and the two of them set out to turn one accidental acquisition into a holdco. The Deal (or Deals) Five acquisitions over roughly ten years. Miller Companies now aggregates to $12M in revenue and $3M in EBITDA, a roughly 25% EBITDA margin that suggests the portfolio skews toward software and services rather than asset-heavy trades. Two of the five sellers were, in Chandra's words, brazenly dishonest. Not the usual add-back gymnastics or optimistic pipeline slides. Actual misrepresentation. The partners closed anyway or discovered it after. They kept going. The through-line on structure: bias for action over exhaustive diligence. They would rather be wrong fast on a small deal than be right slowly on a perfect one. That philosophy cost them real money twice. It also got them to five closings while more cautious searchers were still on their first LOI. First 100 Days (and the Payroll Crisis) Inside the first year of their initial acquisition together, cash ran out. Payroll was due. The seller's working capital assumptions had been wrong, revenue came in softer than pro forma, and the bank balance went negative faster than they could reforecast. They liquidated their remaining personal financial assets to cover payroll. Not a line of credit draw. Not a friends-and-family round. Personal accounts emptied into the operating account so employees got paid on Friday. This is the part of holdco origin stories that gets sanitized on LinkedIn. Chandra tells it straight because it explains the rest of the decade. Once you have written that check, every subsequent decision is calibrated against a real memory of what the downside looks like. Operating Lessons - Cheap leverage beats clever leverage when the deal is small. Zero-interest credit cards funded a $60K acquisition that a bank would have laughed at. Match the financing instrument to the check size. - A partner is not a luxury in small holdco land. The episode explicitly contrasts Chandra and Colin's trajectory with solo operators who cracked under the same pressure. Splitting equity is cheaper than splitting a nervous breakdown. - Diligence has diminishing returns on sub-$1M deals. You will not out-lawyer a seller who is determined to lie. You will catch the honest mistakes and miss the dishonest ones either way. Price the risk, size the check accordingly, move. - Working capital is the silent killer of year-one holdco deals. Whatever the seller tells...