How We Added $5.9M in Revenue With "Zero Dollars Down"

In 2024, Onfolio closed three acquisitions: RevenueZen, DDSRank, and Eastern Standard. Together, they added approximately $5.9 million in annual revenue and approximately $1 million in annual EBITDA to the portfolio.

Onfolio Holdings, the parent company, didn’t put up a dollar of cash for any of them.

This is the acquisition model we’ve built over the past two years, and it directly addresses the most common concern investors raise about acquisitive micro-cap companies.

Three Deals, Zero Parent Company Cash

Each of the three 2024 acquisitions was funded through a combination of co-investor capital, non-convertible preferred shares, and seller notes. Here’s how each one was structured.

DDSRank

DDSRank is a digital marketing agency acquired for $600,000. The business generates approximately $200,000 per year in EBITDA, making it a 3.0x acquisition multiple.

A special purpose vehicle (SPV) funded about a third of the purchase price, roughly $200,000. The SPV is a co-investment vehicle where accredited investors invest alongside Onfolio in specific deals. The remainder was covered by preferred shares issued to the seller and a seller note.

Cash from Onfolio Holdings: zero.

Eastern Standard

Eastern Standard, a larger agency acquisition, cost $2.16 million for 90% ownership. The business generates approximately $630,000 per year in EBITDA, a 3.8x multiple.

The SPV contributed about 30% of the purchase price, roughly $500,000. Preferred shares and seller notes covered the rest.

Cash from Onfolio Holdings: zero.

RevenueZen

RevenueZen was the first acquisition of 2024, closed in January. The business had $1.4 million in annual revenue and $227,000 in net profit. It was funded through a combination of promissory notes, preferred shares, and seller notes.

What the SPV Model Is and Why It Matters

The SPV model, launched in March 2024, lets accredited investors co-invest alongside Onfolio in specific acquisitions.

From the co-investor’s perspective, they get direct exposure to a cash-flowing business at a known acquisition multiple, without having to source, negotiate, or manage the deal themselves.

From Onfolio’s perspective, the SPV provides acquisition capital without diluting common shareholders. The parent company gets operational control and the portfolio benefits (cross-selling, shared resources, consolidated management), while outside investors share the acquisition cost.

This is a capital discipline mechanism. Rather than issuing common equity to fund acquisitions, which dilutes existing shareholders and is the typical pattern investors worry about, we brought in co-investors at the deal level.

Why “Non-Convertible” Matters

The preferred shares issued in these transactions are not convertible into common stock. This is the first thing sophisticated micro-cap investors check, and it deserves emphasis.

Since 2022, Onfolio has issued approximately $4.5 million in preferred shares. About $1.5 million was raised through preferred share financing. About $3 million was issued directly as part of acquisition purchase prices. None of these convert into common stock.

The preferred shares pay a dividend, which shows up in the parent company’s cash expenses. But they don’t create new common shares. The ownership structure of the common stock is not affected.

The Acquisition Math

Across all of Onfolio’s acquisitions, the blended multiple is approximately 3.5x EBITDA.

At a 3.5x multiple, each acquired business generates enough EBITDA to “pay for itself” in roughly three years. Everything beyond that is return on the invested capital.

The 2024 deals specifically:

DDSRank: 3.0x ($600K for $200K EBITDA)

Eastern Standard: 3.8x ($2.16M for $630K EBITDA)

RevenueZen: $1.4M revenue, $227K net profit

Combined, these added $5.9 million in annual revenue and approximately $1 million in annual EBITDA. The portfolio is now generating $575,000 per quarter in operating profit, up from $50,000 per quarter in Q1 2023.

Why Creative Financing Matters

As you’ve seen with our previous posts, our goal is to increase cashflow from the portfolio, such that it can fund parent company overheads. This means growing the portfolio organically, or through acquisitions. Acquisitions move the needle the most, but with limited cash, we have had to look for other ways to fund these purchases.

In 2024 we made significant progress thanks for the “zero dollars down” deals we did. Long term, we’ll look to more traditional financing methods, as they become available.

The math behind why deals like this compound differently than higher-multiple acquisitions is in a free guide on the math of serial acquisition.

How We Added $5.9M in Revenue With “Zero Dollars Down”