Everyone loves a good startup story, but Ace Chapman would rather go shopping where businesses already exist.
"Nobody talks about the fact that you can buy an existing business, and that's compounded by the fact that baby boomers haven't been taught how to sell a business," says Chapman, 39, who has spent almost two decades buying, growing and selling businesses. "There will be nearly a trillion dollars in wealth transfers in the next decade and, meanwhile, the millennials are all starting something from scratch."
Chapman got his start in the Scenic City, growing up in East Chattanooga where his father, the late Al Chapman, focused his ministry. The younger Chapman bought his first business at 19 years old, and has owned everything from tanning salons and mortgage companies to a 3D animation studio and high-end clothing resale shops. He now owns about 40 businesses, and is always looking for deals.
"For every dozen businesses I've bought, I've probably looked at 300," Chapman says.
For the last five years, Chapman has lived and worked internationally, but he's setting up shop in his hometown in 2020. Chattanooga is close to family, close to business partners in both Nashville and Atlanta, and there's a wave of opportunity coming, he predicts.
"A lot of baby boomer business owners are going to need to sell and will be not only looking for a potential buyer, but someone who can help them get the business sale-ready," Chapman says.
Sharing what he has learned about buying and selling businesses has become an important focus of his work, Chapman says. His website and social media channels are largely dedicated to showing other people how to do what he does.
"I need more people who have this knowledge," he says. "The cool thing about this space is that everybody can win."
Chapman's first glimpse of the career he would build came when he landed a spot as a student at the McCallie School.
"I was able to get a scholarship there, and that was life-changing for me," Chapman says. "A friend of mine, on my first day at McCallie, asked me what my dad did and I said he was in ministry. I asked him about his dad, and he said, 'He owns some banks.' I thought, people can own those?"
As a freshman at Colgate University in New York, Chapman's fascination with business and financial markets led him to dabble in an online virtual stock trading website called CoolWallStreet.com.
"It's 1999, I'm using this just for fun, but it's always crashing, so as my summer came I reached out to see if they wanted to have me as an intern," Chapman says. But the owner wasn't interested in internships. He wanted to sell, and he wondered if Chapman knew anyone who might want to buy.
"I'm 19, I just asked you to be an intern, I don't know anybody that wants to buy a business," he says. "It's an idea that had never crossed my mind."
Once the idea was planted, though, it took root. The owner wanted $70,000 and was willing to finance half. Chapman didn't know much about valuation, but he thought a small, profitable business might be a good way to build a financial foundation. So he got creative.
Chapman had $3,000. He found a friend who wanted to invest $15,000. That left him with a $17,000 hole to fill. He visited the student center.
"Back in the day they had those tables on campus where credit card companies would come in and give you a credit card — I mean, it was so predatory — so I go to one of those and I figure out how to do the cash back," Chapman says. "I got the down payment by pulling $17,000 from multiple cards.
"People ask me, weren't you afraid the business wasn't going to work? When I think back to that time, my biggest worry was one of those credit card statements being mailed to my parents instead of my dorm. I would have been dead."
Chapman went home for the summer and began spending all his time building up CoolWallStreet.com. But it was early enough in the dot-com days that his father wasn't convinced.
"We had advertisers that were paying us, but the whole summer he was like 'You have to get a job.'"
The site attracted investors and did well enough that his family eventually relented, and Chapman took time away from school to build the business. But the 2001 dot-com crash ended all of that.
"Our clients went out of business, we went out of business, I was absolutely devastated," Chapman says. "Looking back now, I bought it for $70,000 and it was making $150,000 for a few years — that's an amazing return on the initial $70,000."
Chapman went to work writing mortgages for a bank, but his entrepreneurial inclinations wouldn't leave him alone.
"I started thinking, I wonder if I could buy a mortgage company," Chapman says.
After initially investing in real estate and mortgage lenders, Chapman decided to see if he could make a business out of buying, growing and selling small businesses rather than property. He started shopping and spent the first years in buy-grow-sell mode. Now he is far more focused on buying and holding onto businesses — and on buying businesses that complement each other, he said.
"I never want to sell anymore; I always want to buy," he says. "You get into a system where you use cashflow from one business to buy more businesses. "
* Age: 39
* Business: Chapman buys and sells existing small businesses, connects buyers and sellers, and helps sellers get their businesses sale-ready. He got his start as a college student 20 years ago, and has bought and sold more than 100 businesses over the years.
* Online: AceChapman.com