In this episode of Entry & Exit, Stephen Olmon and Collin Trimble walk through how they went from software and small business experiments to acquiring their first security company — and why the industry checked every box they were looking for.
They break down the real drivers behind their decision: recurring revenue, regulatory moats, fragmentation, and the opportunity to scale through acquisition. From discovering the “buy vs. build” path to finding the right deal (on the first try), this is a candid look at how their journey into security actually started — including what they got right, what they missed, and what almost killed the deal.
If you’ve ever considered buying a business — or wondered why security continues to attract serious operators — this episode gives you the full origin story.
Inside this episode:
→ Why security stood out vs. HVAC, plumbing, and other trades
→ The role of recurring revenue in making the model work
→ How regulation and licensing create a competitive moat
→ Finding and closing on their first deal (Alarm Masters)
→ Mistakes they made during diligence and legal process
→ How they financed the acquisition with an SBA loan
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Connect:
Stephen Olmon — http://x.com/stephenolmon
Collin Trimble — https://x.com/TXAlarmGuy
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How we decided to pursue buying in the security industry. Oh, like I could actually buy a quality business from a retiring owner type of concept. Regulatory environment that existed in that industry because it's life safety. All of that was music to my ears.
So we used an SBA 7A loan, which is specifically used for acquiring businesses. We did no formal diligence. And so by the grace of God, it worked out. I would not recommend that to anybody.
My friends that like the whole licensing thing and the moat around that that were doing like HVAC and plumbing, but they didn't have the recurring revenue side, but this did. And so you combine all that, I was like, okay, that's kind of hot. Welcome to Entry and Exit. My name's Steven Ullman, and this is Colin Trimble with me. And we are actually starting a bit of a side quest, you can say. Yeah. We are going to walk through our founder story. We're going to explain kind of how we got started and the entire journey kind of up to this point. And then we're going to keep adding to it as cool, important things happen, annual updates, things like that. Um, just to allow people to kind of catch up if uh they don't know our background and want to learn more. So today we're gonna kind of start out with our initial interest in the industry, kind of how we decided to pursue buying in the security industry. And um kind of everywhere from our initial interest to closing uh our first acquisition, kind of the platform that was alarm masters.
Yeah, I love that. Um I want to hear also from the listeners if they end up liking this content and they like want to hear it on some type of regular cadence, like monthly, quarterly, every six months, every year, daily. We we want to know like how often do y'all want to hear updates of what's going on in our business? So leave a comment, and while you're there, click the subscribe button, leave us a comment, give us a thumbs up, just you know, normal stuff. Uh yeah, so we're gonna do we're gonna do the uh origin of alarm masters, um, basically everything up until from inception up to close, closing on the deal and and acquiring the business. Um, which by the way, we're coming up on three years here. Yes, we are in a couple weeks. Um has gone by fast. So um I think it probably makes sense to start with the fact that I, if you don't know my story, I came from the industry. Um I worked at Brevo, which is a cloud access control platform, and is at the time was the sister company to Eagle Eye. And at that time, Brevo was the the bigger company, and Eagle Eye was just kind of getting started, and so we were selling both uh my role was selling both Brevo and Eagle Eye. And so I had gotten a lot of exposure to um channel sales where my day job was supporting integrators like Alarmmasters and probably many of you, and helping them with all the things. If you're in this industry right now, you already know exactly what this is. If you're not in the industry, there are uh manufacturers that sell technology and then they go um the the integrator us goes and installs and resells it and manages it going forward. And so that's what I did is I helped kind of add new dealers, get them enabled, help them with sales, help them with quoting, help answer questions, uh just spending a ton of time with them. And that was my first like real experience um getting exposed to the security industry. I didn't know anything about security prior to that. Um and one of the main jobs I had was building our independent dealer base. So that was the group of dealers like us that are not corporately owned, like you know, you could think of ADT or Convergent. I did spend time with them, but mostly independent. And one of the dealers that I came across was Alarm Masters and Brian Turner. And um I actually have a very vivid memory of trying to get Brian over the finish line and had to become a dealer, and he was very hesitant about selling cloud products, and he ended up coming back to me and saying, Hey, um, I, you know, have a lot of questions and I'm not sure if I'm gonna do this, but I really like you a lot. And I remember thinking to myself, this guy is super smart, he's very old school, but he's like a great sales guy. If you would just sell some modern technology, like I think you could have a ton of, you know, um new projects and whatnot. So anyway, that's how I got introduced to Alarm Masters. Alarmmasters was um, you know, a dealer of ours way back in the day. And um, fast forward, Steven and I uh have been great friends in college, met in college, and we're in a Bible study together and stayed friends after that. He was in Dallas, I was in Houston, and um we he convinced me to be an entrepreneur sometime around 2019, 2020, said, Hey, you should break out on your own. And we started a bunch of different businesses, many businesses. In fact, we owned a dumpster rental business at one time. We did dumpster trailer business. Yeah, um, we owned a ton of different companies together and had a blast building and learning some of that stuff. And there was this fateful day, and I'll let Steven kind of paint the picture here, but there was this fateful day where we were one of our businesses was consulting with security companies to help them grow their organic sales and marketing channels. Steven and I owned a growth revenue company called Bear Day, uh, which had kind of started out of another failed business. And uh I I said, Steven, let's talk.
And he can tell you kind of Yeah, I had I had spent time selling software and then went out on my own a few years prior and had started a couple other things with other partners and um start I read this book called The Messy Marketplace. Um, a really big fan of Brent B. Shore. I think if you're interested in buying or selling a business, it's a great little book to read. And um that book was kind of my initial baptism into the idea of buying a business. I didn't grow up with like parents that you know were entrepreneurs or anything like that. And so kind of had a standard corporate job, went into software sales, then went out of my own, but that was all starting businesses, and this was like a wake-up call. Oh, like I could actually buy a quality business from a retiring owner type of concept. Some people call that the silver tsunami.
Why do they call it the silver tsunami?
Well, on average, our more wise older friends hair, their hair tends to trend gray and white. Okay. You know, just you know, well, silver fox, you know, some may say. I don't know. Um, and so um, yeah. Um, anyways, so I convinced you to consider buying a business, and you're like, well, okay, I'm interested in that, but only if it's in this industry. And so then we spent time on a whiteboard, you know. I think I said I'd give you an hour, and within 15 or 20 minutes, I was pretty convinced. Um, and that was due to a lot of reasons. Like we both had come from the software world, so recurring revenue, eighth wonder of the world, yep, sign me up. Um, but also the fact that it was still fragmented enough to be able to aggregate different businesses and roll them together. That's really what I wanted to do. It's what we have done and we're still doing, frankly. And um, you know, the the reality that there was licensing and kind of a regulatory environment that existed in that industry because it's life safety, all of that was music to my ears. And it was, you know, my friends that like the whole licensing thing and the moat around that that were doing like HVAC and plumbing, but they didn't have the recurring revenue side, but this did. And so you combine all that, and I was like, okay, that's kind of hot. Yeah, it's kind of kind of hot. So I was kind of into it. Um, and then, you know, as fate would have it, you reached out to a former coworker.
Yeah, so we didn't, there's this whole thing called entrepreneurship through acquisition. We're already kind of entrepreneurs, so we weren't a perfect model for that. But there's these folks that like search for businesses all the time, they're called searchers, and we I didn't know what that was, or like how challenging that can truly be, and how people do this for years. And I didn't know that. I just knew I wanted to find a business. And even now, like knowing that Alarm Masters popped up when it did, like, pretty wild because it was exactly in our buy box. But anyway, so I called uh my my friend that were the only person I knew that sold security businesses, which was Kelly Bond. Shout out, she were yeah, shout out KB. Uh, we worked together at Brevo, and I just called her and I said, Hey, I I'm really interested in in buying a security business. Here's kind of our buy box, here's what we're looking for. And she's like, ah, I know the exact one for you because it's you're one of your old dealers, and you'll catch right up to Brian. So fast forward to get introduced to to Brian, and um, you know, we had to do a little bit of selling on ourselves of how all these two guys that had never owned anything in the security industry would be a good fit and good stewards to for their business, and they sort of took a risk on us. They could have sold it to there was a lot of people at the table. I mean, it was an attractive market and an attractive size, and um that was the only deal we looked at. Uh, we didn't look at any other deals. We had a couple phone calls with them and we issued an LOI. And at the time we didn't know how we were gonna fund it. Um, we knew we had a little bit of cash. We had ideas, yeah. We had some ideas, we weren't 100% sure. Um, and so we got under LOI. We submitted an LOI for the deal was on a multiple of RMR plus some assets, is the way that we financed the deal. Um, ironically, we did not really understand or know or know how important a holdback was, so we didn't even add a holdback into the deal, which actually we think after talking to Brian, he he indicated that that was like the thing that tipped it over the edge was they were gonna get all their cash up front. Yeah. Um, and so it was kind of a funny thing because we didn't know what we were doing, and that ended up resulting in getting us the deal. And so uh we we ended up buying alarm masters or getting under LY for Alarm Masters, and we had to figure out two things. One, are we gonna buy this business and do due diligence? And two, how are we gonna finance it? And I will say this, and Steven, we you should talk about some of the due diligence we did, but I will say I don't even think even once we were under contract, you were 100% sold. You still had some reservations, I think, about like, are we really doing this? Like, are we really gonna buy this business? Like the industry's great, like, but is this kind of is this the one we want? Like, we only looked at one company, right? Uh, and so you can kind of pick it up from there because that's yeah.
I I will say we we did end up funding it, you know, through some equity and um an SBA loan, so which is kind of a traditional, you know, like you said, searcher uh type of you know capital structure to take down a local small business. Um pretty common. And so we got that lined up, you know, during that process. Um, so he knew that we were legitimate. Um we really wanted to buy a business that was a bit larger.
Yeah.
Um, and so the business when we bought it was doing a little under two million in top line, and and we were wanting to buy something that was a little bit larger. However, there were some things that were kind of perfect about it. So it was really close to where you lived, and you were gonna kind of be El Presidente, you know, and so that was important. And then, you know, it had a nice uh mix of recurring revenue and um kind of more commercially oriented. We've bent the business to be even more commercially oriented in the last three years, but it was, you know, over 50% commercial at the time, which was important to us. Um, there was some really good tenure on the team. Um, obviously, we've had some turnover over the course of time, but there were people that had been there a long time that seemed to be dedicated to the business and had good credentials, good experience. And so all that combined, I mean, you probably have a few other things you point out, but it it did fit pretty much most of our buy box. And um, you know, I was hesitant in that I thought it was maybe a little small, and then I was hesitant because it just seemed too good to be true because I had so many friends that had tried to buy a business for two plus years and had nothing to show for it. Yeah, and so why are we the lucky ones that just on the first shot, you know, I guess maybe God was kind, uh, is the answer, and I'll just run with that. Yeah, but it was it was it was a little uh I was I was a little skeptical in a way that slightly annoyed you.
Yeah. Yeah, it it I was glad you're skeptical because it helped to really kind of vet through um some of my thinking to defend the transaction. And just to give the listeners a little bit of clarity, so we used an SBA 7A loan, um, which is specifically used for acquiring businesses. Um, they looked very heavily at kind of the um debt service ratio, um, and they have very specific, there's minimums for the SBA, but then there's also it's usually there's a higher level that the bank is going to require. We were able to pass that, and that was good, but the the diligence on the SBA was unbelievable. Like it was really tough. And I would say now that we've said that, we've been saying that for three years, but now that we've done like senior lending and some other like deals that we've raised money and stuff, that like we've realized that that actually wasn't as bad as maybe uh what we've seen since then. Yeah, but so so so the SBA did a ton of diligence. Steven Steven and I did basically no due diligence. I mean, no formal due diligence. We uh looked at the financials as best as we could. We looked at the RMR as best as we could, we looked at the sample of the contracts. The broker was kind of like, hey, y'all really need to like look at this. Here's some reports that you're gonna want. We looked at everything that came back from the the lender, uh, but we we did no formal diligence. And so by the grace of God, it worked out. I would not recommend that to anybody. We just didn't know or think it was important, like no formal diligence.
We had no outside vendor helping us do actual QV. Yeah. And uh we should have. Yeah, and you know, it's interesting. I'm glad we didn't in a way, because I think if we would have, maybe Skeptical Steven would have ruined the deal. Yeah, uh, because there's a few things that we would have found that we found three months later, but we worked it out and it was okay.
Yeah, I agree. So we didn't do any significant due diligence. Uh by the way, a Q of V is quality of earnings, and that's what you do during due diligence to like really it's that it's usually a CPA firm that like looks at all the finances and really ties it all together and kind of finds any skeletons in the closet that are there usually out of negligence, not out of verify, clarify. Yeah, exactly. So um one one thing I want to highlight two things for folks that are listening to this and they want to buy a deal. The first thing is do do do some level of due diligence for sure. Uh, number two, um, get your legal stuff started from the very beginning. Um, because if I had to, because people always ask us, like, was there anything that almost blew up the deal? And and yes, yeah, the legal process almost blew up the deal. We did not use an industry attorney. And that combined with the fact that the people that we were buying the business from also didn't use an industry attorney. We had two kind of people not really, neither of them were really transactions attorneys, and they just really weren't on the same page about communication standards and what needed to be out there, and they weren't communicating to their client, and ours wasn't really communicating to our client or to us rather.
And so there was multiple miscommunications where we had agreed to something with the sellers, didn't we thought we communicated that to the attorney, didn't really work, and then the attorney left it out, and long story short, the sellers thought we were trying to go back on our word and trying to hide it, and so there's multiple things that like almost broke the deal because they thought that we were not being truthful or honest or not honoring our word, and that was because we weren't um on the same page from a legal perspective, and so if I'm going back, I would have done that differently and used an industry-specific attorney, transaction attorney, and and just um more regular communications with the seller and maybe set like a weekly meeting, yeah, or something like that as a touch point, especially if they have you know, if you're ever trying to buy a business and they've really have no experience buying or selling businesses, well, they had bought a bunch that you know they had acquired a lot of accounts over the years, to be fair, but I just think that we could have had a more uh kind of smooth process if we just would have met more frequently to clarify things more frequently. Yeah, um, so yeah, that nearly blew up the deal. Um and then, you know, I don't know if there was any other real kind of overarching risk. It wasn't the most complicated business of all time, like it, you know. So um we we understood mostly like what we were buying. Um but yeah, that's really you know, some of the lack of communication and confusion nearly did kill it.
Yeah, but by the grace of God, um we did close. And we closed on May 15th of 2023. Which is almost exactly 90 days from when we were under LOI. Almost exactly.
Yeah.
Um we did have to kick the LOI, we had to extend it about two weeks um because of some of the legal stuff. Um, we were agreed on all the other terms, but some of the legal stuff got out of control. So I would just recommend anybody that's doing that, like have a really good attorney. Um, but man, I'm you know, it it's been it was it was a really crazy time, pretty stressful, 90 days. Uh, it's almost like if you've ever been married, like being engaged is like the worst part of your relationship. There's like nothing good about it. Uh, it seems like it should be fun and relaxing, but it's like you're stressed, you feel like you may be wasting time on this anyway. Yeah, that's a bad analogy. I almost took that analogy the wrong direction. Careful out there.
Yeah. Um, yeah, but I I will say, you know, as a preview to our next episode of this series, the next morning after closing, we show up to the office. It's 8 a.m. and one of the vans was broken into that morning, and four thousand dollars worth of equipment.
3,500 bucks, yeah.
Was stolen. Yeah, you know, I had to fix a window. So um, it wasn't all rainbows and butterflies, and we'll talk more about the the first 90 days and how absolutely insane that was on the next episode of our founders series.
Yeah, more to come on the founder series. Thanks for listening. Uh, give us some feedback of what you want to hear and how often you want to hear it. And don't forget to hit that subscribe button. Thanks for listening.
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