Permanent Equity
Brent Beshore accidentally bought his first business at age 24. He didn’t know what due diligence was. He Googled it while his lawyer was explaining it to him on the phone. A week before closing, he realized he’d forgotten to set up a line of credit and had no way to make payroll after the seller took the cash out.
“He actually lent me money as a line of credit to keep the business operating because I didn’t even think about it.”
That business returned 20x. Beshore bought 15 more. He now runs Permanent Equity, which owns 16 companies generating over $350 million in annual revenue and $50 million in free cash flow — all built without leverage, without a traditional fee structure, and on a 30-year capital timeline.
The Golden Goose Stack
The first acquisition — Media Cross, a military recruitment firm doing contract work for the Navy — cost $1 million financed almost entirely through SBA debt. Beshore was 24, his wife signed a personal guarantee without fully understanding what it was, and the whole thing was held together by timing and good faith.
It became the original golden goose. “For the most part, we know what our profitability is going to be three years from now,” Beshore said. With a 30-year embedded relationship supplying civilian mariners to Military Sealift Command, the contract was durable enough to predict. “It just clicks.”
The cash from Media Cross became the capital for a pool business in Arizona, which funded the next acquisition, and the next. The strategy: “take 70% of our profits and constantly reinvest, take the other 30%, live a nice life.” Not dissimilar from what andrew-wilkinson was doing with tiny in the same decade, with the same Buffett-influenced patience.
“I say to people all the time: if I had been given $50 million to invest in 2010, I would have lost all the money. It took so long to build up — to make a bunch of mistakes that felt like high stakes at the time but were actually low stakes — in order to warrant having more resources.”
The Structure That Makes Traditional PE Look Broken
When Patrick O’Shaughnessy flew to Columbia, Missouri to visit Beshore and hear about what he was doing, O’Shaughnessy asked how much these businesses sold for. Beshore said three to five times earnings. O’Shaughnessy: “What? Are these businesses going out of business? Are these distressed?” They weren’t. They were healthy businesses in fragmented markets that no one was paying attention to.
Beshore’s fund structure is the deliberate opposite of traditional private equity:
- No fees: No 2-and-20, no management fee, no reimbursements. The hold-co team is paid from Beshore’s own GP profits.
- No debt: All-equity deals. “We’ve had that happen over and over again. We never know what the future holds, but we know there are going to be options to invest in really interesting things. If the cash flow is all going to the bank, you don’t have that option.”
- 30-year capital term: Traditional PE holds for 10 years, then must exit. Permanent Equity’s name is its thesis — hold forever if the business is good.
- 40% of free cash flow: Beshore takes 40% of the free cash flow generated above a hurdle, distributed as cash comes in rather than at exit.
The COVID proof of concept: the aerospace business PackAir, acquired in 2019, was debt-free when the pandemic hit. While every competitor was focused on debt service, Beshore had free cash flow to invest. The business grew 7x over two years. “Everyone else who had debt had maybe grown a tiny bit from 2019 but not much.”
Returns Without Marks
On the question of returns — the central question for any fund — Beshore is constrained by SEC regulations but pointed to publicly available data from his annual letters.
“The minimum we underwrite to is a 30% IRR, and we’ve historically been pretty significantly above that. What I can say is that our total cash-out IRR is in the low 20s, without any marks — without any valuations of the businesses.”
The math works: buy a business with no debt at 5-7x earnings, achieve organic growth of 7-10% per year with operating help that pushes it to mid-teens, and the compound returns are substantial. No leverage, no financial engineering. Just patient capital in businesses that were undervalued because they were too small for institutional attention.
“I think that’s where it’s obvious from the outside that there’s gold in the hills if you look at small business acquisitions. This is not a secret anymore.”
What Buffett Actually Did Early
Beshore’s conversation with warren-buffett itself shaped his understanding of what the Berkshire model really was at its origins.
“Go back and look at Buffalo News. Buffett and Munger were literally living in Buffalo. They were writing headlines.” When Berkshire acquired the newspaper, Buffett was personally involved in advertising placement, headline writing, and retail strategy for See’s Candy. It was Steve Jobs and the Apple Store — product-oriented obsession with details.
“‘Berkshire buys businesses and leaves them alone.’ That was not how they operated for the vast majority of their history. They eventually had to because they got to such a scale they literally couldn’t intervene anymore.”
The implication for Permanent Equity: being small is an advantage, not a limitation. Beshore can intervene when it matters. He can help portfolio companies make the right hire at the right scale. He can see the business clearly because there aren’t 90 of them competing for his attention.
The People Framework: Enneagram and Personality Testing
Beshore’s framework for evaluating operators is less conventional than the business models he buys.
“About 60% of the battle was just the initial market selection. When we picked a project where the winds were blowing against us, it didn’t matter how much effort we put in or how great the operator was — it was always an uphill battle.”
The other 30% is CEO quality. To evaluate it, Beshore uses a battery: DISC, Myers-Briggs, Habit Story, and the Enneagram. “When I first meet somebody, I’m instantly categorizing them — what I think their Enneagram number is, and automatically mapping them across the four main Myers-Briggs dimensions.”
His own Enneagram type is Three, tipping toward Two: an achiever driven by wanting people to like him. “If anybody’s proud of their Enneagram number, it means they don’t understand the Enneagram. It tells you your deepest fears and your areas of greatest weakness.”
The logic is not that personality tests predict success. It’s that knowing a person’s failure modes before giving them a company to run is better than learning those failure modes after.
See also: brent-beshore | berkshire-hathaway | holdco-model | holding-companies | boring-businesses | acquisition-entrepreneurship | sba-loans | private-equity