It’s really not for the faint of heart’: This 29-year-old CEO became a business owner, doubled revenue in 3 years, and learned…

Not all of the lessons in the Walker Deibel playbook fit between its covers. One of the first bolt-on acquisitions Lucas Philips tried to close was a tiny shop in rural Oregon — a guy who had spent decades fabricating custom interiors for Porsches. Philips flew to Portland, grabbed a brand-new convertible Mustang on a free upgrade from his shiny new Hertz President’s Circle card, and spent three-and-a-half hours driving south through “the most beautiful” Oregon landscape toward the seller’s property. The owner had originally quoted $40,000 for the operation. Two days later, after watching Philips pull up in a gleaming convertible and spend time on site, he decided the price should be more like $320,000.

“I regret that so much to this day,” Philips said. “I should have just taken the Camry.”

Lucas Philips grew up watching his father do something increasingly rare among his generation: own a small business outright and still make it home in time for school drop-offs and hockey practice. At 26, he decided to do the same — acquiring a niche manufacturer of custom automotive interiors in Newark, N.J. Now 29, Philips told Fortune that he’s glad he did it, but “it’s really not for the faint of heart.”

Since acquiring Newark Auto, Philips has pushed annual revenue from “a little over a million” at purchase to more than $3 million this year, in roughly five years of operating time. He’s done it with bolt-on acquisitions, long commutes, and a roster of hourly workers who have never seen the perks of startup life — Philips jokes about the proverbial ping-pong table in the office — but he’s also learned that in the world of small business, the smallest details can derail a deal.

Like: don’t rent a convertible when you’re making a business trip to try to acquire a new subsidiary.

From dorm-room startup to “buy then build”

Philips traces his entrepreneurial drive to something older than Northwestern. His family immigrated to New York in the Ellis Island era a little over 100 years ago and, frankly, nobody wanted to hire them. He’s from several generations of Jewish small business owners, so it was only natural for him to think this way, he said.

The list of businesses is somewhat endless. One grandfather sold paper goods — boxes, plastic wrap — to the Jewish bakeries of New York. His father sold sunglasses imported from China before anyone was importing anything from China, then hair accessories, then bought a high-end custom furniture business that now has a showroom in the B&B building on Madison Avenue and a factory in Christiansburg, Virginia.

As an undergraduate at Northwestern, Philips launched a coffee concept and raised “millions of dollars in outside capital” before graduating, only to find that the reality of reporting to investors and fighting with an MBA cofounder was not the life he wanted. He described leaving that venture disillusioned with the equity-funded startup model and looking for a path that would give him more control, even if it meant more personal risk.

A friend from Kellogg introduced him to the idea of entrepreneurship through acquisition (ETA) and pointed him toward Walker Deibel’s book Buy Then Build . Philips said reading it “clicked” in a way that academic guides failed to, making clear that he could “buy a business with debt” instead of raising another equity round or bootstrapping from zero. At age 23 in 2021, he joined the Acquisition Lab, which works to provide exits for small business owners and entries for ETA aspirants like Philips. Within 10 weeks of completing the lab, he had a letter of intent to buy Newark Auto, and closed another two months later.

A personal guarantee and “burning the boats”

What distinguishes Philips’s path from the MBA search-fund world is both the capital stack and the incentive structure. The search fund model — popularized at Stanford and Harvard — lets MBAs eventually own 20%–25% of a business, with institutional equity and no personal guarantee on the debt. They can be fired. The SBA model Philips used is different: 10% down, a personally guaranteed note on the remaining 90%, and 100% ownership. He frames the difference in terms borrowed from Noam Wasserman’s The Founder’s Dilemmas : the “king outcome” versus the “rich outcome.” He wanted to be king.

“Once you buy the business, it is your business and no matter what skeletons are buried in the closet, you’re stuck with the thing,” he said, joking that it’s not like you can go to some “customer service counter” and return it if you don’t like what you find post-closing. That’s not the way venture capital works, he clarified, where investors expect a high failure rate and simply write off the capital if an idea doesn’t work. He described the SBA loan approach as something like “burning the boats” in warfare, or “taking out a mortgage on your own career.” You are on the hook for whatever happens next.

Philips insisted that no one should make that kind of bet without formal training. He tells younger would-be acquirers to read Buy Then Build , sit through the lab’s modules on search and diligence, and then reconsider whether they still want to proceed. “Getting training on how to do that right is so important,” he says.

Waking up at 4:30 a.m. to run a blue-collar business

If his startup years were defined by pitch decks and investor updates, Philips’ life now is defined by alarms and factory floors. He lives on the Upper West Side of Manhattan — on the same block where he grew up — commuting daily to Newark to oversee a manufacturing operation whose workers are on the line at 7:30 a.m.

“I wake up between 4:30 and 5:30, and I’m in the of...