Joy of Buying an Art Gallery | Sean Moore Interview

Deal facts

purchase price

$5.31m total loan/financing (valuation $5.3m, final purchase structure $5.31m)

multiple

~3.25x SDE (ex-inventory)

sde ebitda

SDE ~$1.1-1.2m (net income ~$584k plus ~$500k of add-backs/owner comp)

revenue

$4.2m (prior year)

financing structure

No SBA loan in final deal (SBA lender fell through days before closing); final structure was 100% seller financing: $3.91m seller note at 9% starting June 1, plus a second $400k seller note at 9% starting October 1, plus a $1m self-funded equity injection (via ROBS 401k rollover) including a $100k earnest deposit; original LOI had been ~$4.9m purchase price with SBA loan + 10% ($490k) seller note at 7.5%, which was renegotiated upward to a $1m (20%) seller note at 8% before the SBA lender ultimately killed the deal over seller-note subordination language

notes

Valuation of $5.3m included $1.4m of inventory (initially offered $1m inventory, later found additional inventory and settled on $1.4m of the available ~$2m). Seller initially demanded $150k earnest money, later settled to $100k. Funded via ROBS (Rollover for Business Startups) using ~$1m+ from Sean's 401k/retirement accounts, set up through Guidant. Attorney Jeff Bachmann at AIS Law charged a flat $20k LOI-to-close fee.

Why this business

Sean had collected art on his travels for 20+ years and always dreamed of a business tied to a personal passion. After discovering ETA via a friend (who introduced him to the book Buy Then Build, the Acquiring Minds podcast, and the ROBS strategy for using retirement funds), he browsed BizBuySell and was stunned to find a large, professional, financially strong multi-parcel art gallery (Fascination Street Fine Art) in Denver's upscale Cherry Creek district. He had also considered more 'practical' Searcher-type businesses (a generator rental company, a multifamily renovation company, a home construction company) but chose the gallery because it combined a sound, profitable business with genuine personal passion, and because he preferred working with art-loving people over managing labor-intensive service crews.

What's working

• High-margin, well-capitalized brick-and-mortar gallery (6,000 sq ft, three connected parcels) in a premier, growing Denver neighborhood (Cherry Creek) with strong walk-in demographics
• Roughly 70-75% of revenue is generated through online lead generation (people Googling represented artists, inquiring via the website) followed by human sales conversion, not pure walk-in traffic
• Geographic exclusivity arrangements with 30-40 nationally recognized contemporary artists reduce local competitive overlap with other Cherry Creek galleries
• In-house frame shop (branded separately as 'Denver Custom Frames') is a fast-growing, complementary revenue line, up ~50% year over year
• Deep trust and relationship built directly with the seller (meetings outside the broker) which he credits with winning the deal over a better-capitalized competing buyor and salvaging the deal after it nearly died
• Peer support group ('pod') of three simultaneous searchers (Sean, Yan, Dan) who shared lenders, attorney, templates, and emotional support throughout their respective searches
• Planned modernization: rebuilding a dated (2004-era) website, adding short-form video/social content (TikTok, Instagram Reels) and expanding social/digital marketing as primary growth levers

What's hard

• Deal nearly died at the 11th hour when the SBA lender flagged that the seller's note would be subordinated to the SBA loan with no recourse for the seller, prompting the seller to kill the deal days before scheduled closing
• Had to abandon SBA financing altogether and restructure into two seller notes (totaling ~$4.31m) plus $1m of self-funded equity, greatly increasing reliance on and entanglement with the seller (who became his landlord, banker, and consultant simultaneously)
• Seller initially demanded an unusually large $150,000 earnest money deposit, creating prolonged, costly negotiation with attorneys over when/how that money would go 'hard'
• Anchored his seller-note interest rate too low (7.5%) early on given the rising-rate environment, which he regrets
• Inventory-heavy nature of the art gallery business (roughly $1.4m of the $5.3m valuation) made SBA lenders wary and unfamiliar with the asset class, complicating financing
• Emotional toll of the search and acquisition: loneliness, family/friends not understanding the decision, repeated panic about risking a large share of retirement savings, and about 10 days of insomnia/impostor syndrome after closing
• Had to let a framer go shortly after taking over, and is still working through post-close operational transitions (vendor/account transfers, learning the business from a team that knows more than he does)

Notable quotes

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