The Green Sheet Online Edition
November 9, 2026 • 26:11:01
The obliviously obvious
I received a call the other week from a sales professional I had never spoken with before. He was seeking advice on an offer to purchase a portion of his merchant portfolio. He believed he was being offered a 60 multiple.
The offer behind the multiple
The terms were unique. The buyer was purchasing the revenue stream, not the merchants themselves. He would retain certain servicing responsibilities and have limited attrition liability for three years, after which that liability would be extinguished.
Through discussion, I learned he was a friend of a friend. I did not engage with him professionally. I am not a mergers and acquisitions (M&A) specialist. M&A is a specialized business, and firms such as Wellesley Hills Financial and MAPP Advisors have experienced and dedicated M&A teams. They have relationships with buyers and sellers and extensive experience structuring transactions for both sides.
I do, however, understand payment companies, portfolio valuations and the attributes that make a payments company or asset more or less valuable.
Once we worked through the additional deal points and his ongoing servicing obligations, the 60 multiple was really a multiple in the high 40s. Still, it was an above-average offer. His processor was being acquired, creating an opportunity for his portfolio to be rolled into the larger transaction.
We then discussed his overall financial position, concentration of wealth in the business, age, lifestyle, family situation and future earnings potential. I suggested he take the deal. He wasn't selling his entire portfolio. He was receiving a higher multiple than he might ordinarily receive, and he could continue to influence the servicing and pricing of the merchants being sold.
He didn't need the money, however, and was concerned about the tax consequences and losing the monthly residual income. Ultimately, he declined the offer.
Success can obscure the problem
Around the same time, I spoke with another payments professional facing almost the opposite situation. He is wildly successful, dynamic and what I would call a big-game hunter. He pursues very large merchant relationships and develops custom integrations that help him retain those relationships for years. He also operates a merchant advance business that has historically generated extraordinary returns on his deployed capital.
But he needed a large amount of cash quickly. His need was significant enough that he was willing to sell or leverage his portfolio at less than half the multiple the first individual had declined. His monthly spending was roughly four times that of the first individual. He had been successful for so long that his regular spending, combined with some poor decisions, eventually created a cash crunch.
More damaging, the problem was diverting him from what he did extraordinarily well. Instead of spending his days finding large merchants, building integrations and growing his business, he was spending his time trying to raise short-term cash and considering transactions at distressed valuations to do it.
Ironically, I could argue that the same optimism and confidence that propelled his success also contributed to his cash crunch.
Then there was a third individual. I recently met him through a mutual friend. He reminded me of The Millionaire Next Door. He lived below his means, owned a niche POS business and a small ISO portfolio, and had built a comfortable financial position. His frustration was that his business had stopped growing.
He had valuable relationships within a unique vertical and wanted advice on how to take the business to the next level in preparation for an eventual exit. Although he reached out for a consulting engagement, that's not what he needed.
He was highly experienced and already possessed most of the knowledge necessary to accomplish what he wanted. He just needed to be willing to do the work. His success had made him comfortable. Too comfortable.
What he needed wasn't another industry expert. He needed staff, accountability and people around him who would push the business forward. It was abundantly apparent. We spent about fifteen minutes walking through his assets, opportunities and options, and he was invigorated.
The value of another perspective
In each of these situations, the individual initially thought he needed an industry consultant. None of them did. They needed perspective. An empathetic palm reader probably could have told them much the same thing. Of course, it would have taken longer, and they would have had to pay the palm reader.
Their problems weren't particularly complicated. In fact, from the outside, they were almost painfully obvious. What I call "obliviously obvious."
The first individual had accumulated substantial wealth but struggled with the emotional difficulty of exchanging recurring income for liquidity. The second had tremendous earning power but allowed his spending and financial obligations to interfere with the business that created that earning power. The third had achieved enough success to become comfortable, and that comfort had become an impediment to further growth.
How many of us can relate? Maybe that's part of why industry conferences remain so valuable. I just returned from the Western States Acquirers Association conference. Like I feel upon my return from most payments conferences, I'm tired. I don't bring sleep to conferences.
The time spent connecting with other people, comparing notes, making new relationships and reconnecting with old friends is invaluable. Sometimes the greatest value of those conversations isn't learning something you didn't know; it's having someone else see clearly what was sitting right in front of you.
AI is awesome. Information has never been easier to obtain. But there is still enormous value in sitting across from another person, describing a problem and hearing them say: "You are an idiot. Buy me a drink and I'll tell you why." Conference time is irreplaceable. 
As founder of Humboldt Merchant Services, co-founder of Eureka Payments, and a former executive for such payments innovators as WePay, a division of JPMorgan Chase, Ken Musante has experience in all aspects of successful ISO building. He currently provides consulting services and expert witness testimony as founder of Napa Payments and Consulting, www.napapaymentsandconsulting.com. Contact him at kenm@napapaymentsandconsulting.com, 707-601-7656 or www.linkedin.com/in/ken-musante-us.
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