The numbers
As stated by the listing on September 19, 2026.
- Asking price
- $900,000
- SDE
- $351,000
- Gross revenue
- $605,220
- Multiple
- 2.56x
- Established
- 2025
- Employees
- 1
Why we like it
A mushroom capsule cannot legally claim to cure anything. Under FDA's dietary supplement rules a company can say an ingredient supports cognitive function or stress response, never that it treats a disease, so an entire category of functional mushroom brands has grown up selling on structure and function language, education content, and repeat purchase rather than medical proof. That constraint shapes how these brands actually make money: the product itself, typically blended and encapsulated by a contract manufacturer, is close to a commodity, so the value sits in the brand, the story, and the reorder habit a customer builds around a morning or afternoon ritual. This Encinitas company operates inside that model, selling mushroom based wellness products out of a market that already skews toward functional health and alternative wellness spending, with a single person running the whole operation. The figure worth sitting with before anything else is how new this business is. One year of results behind a stated cash flow margin above half of revenue is a pattern usually produced by a founder's personal following and paid advertising, not by an operating history a buyer can assume will repeat. Growth from here likely comes less from wholesale distribution and more from tightening the funnel: better retention on repeat orders, a higher subscription mix, and a lower cost per new customer, which makes this closer to a marketing business wearing a supplement label.
No personal licence needed
Selling dietary supplements does not require the buyer to personally hold a professional license the way a contractor, pharmacist, or broker would. The regulatory weight sits at the business level instead: if formulation and encapsulation happen in-house, the facility needs FDA registration and cGMP compliance under 21 CFR 111, and every product needs compliant supplement facts labeling and claims language. If a contract manufacturer handles production, most of that burden sits with the co-packer rather than the buyer. Confirm which model this business uses before assuming either way.
What worries us
- Owner dependence with no operating benchThe business is one year old with one employee, almost certainly the seller, handling sourcing, formulation oversight, marketing, and fulfillment. A buyer is not just acquiring a product line, they are acquiring the job of replacing everything the founder does personally, including whatever following or credibility drives traffic today.
- Customer acquisition concentrationDTC wellness brands at this stage typically rely on a narrow set of acquisition channels, often paid social or a founder's own following, to generate sales. If most of the $605,220 in revenue traces back to one or two channels, a platform algorithm change or a rise in ad costs can shrink revenue quickly, and that risk is invisible in a top-line number.
- Regulatory and claims exposureFunctional mushroom products sit in a space that regulators have been paying closer attention to, both for supplement claims language and for contaminant testing on extracts. A labeling or claims misstep, or a lab result on heavy metals, can trigger a costly relabeling effort or an FDA warning letter for a brand this size.
The callSuits a buyer who can run direct-to-consumer marketing and supplement compliance, not one who wants a proven track record beyond a single year.
Our calculations
Our standard SBA 7(a) acquisition structure applied to the asking price. Assumptions below.
Sources
| SBA 7(a) loan | $854,487 |
| Seller standby note | $47,471 |
| Buyer cash at close | $47,472 |
| Total sources | $949,430 |
Uses
| Purchase price | $900,000 |
| Closing costs (est.) | $27,000 |
| SBA guaranty fee | $22,430 |
| Total project | $949,430 |
- Monthly payment
- $10,940
- Annual debt service
- $131,283
- DSCR
- 1.65xSTRONG
- Injection check
- Meets 10% ($94,943 against $94,943 required)
- Closing costs estimated at 3% of asking price
- Owner salary of $120,000, loaded
- Rate of Prime + 2.25% = 9.25%
- 10-year term, fully amortizing
- Injection split half cash, half seller standby note
How we would go about buying it
The order matters. Every step below is free until the last one, and each is a chance to walk away before it costs you anything.
- 1
Call the broker, not the bank
The listing is brokered, so the broker is the gate. Ask for the CIM and the last three years of tax returns, and expect to sign an NDA first. Do this before you talk to a lender: no lender will size a loan without the numbers, and the broker will not release them to a lender you have not engaged.
Open the listing - 2
Ask these before you spend anything
Specific to this business, from our read of the listing. The answers decide whether the numbers above survive contact.
- Is the product formulated and encapsulated in-house or through a contract manufacturer, and if in-house, is that facility FDA registered and cGMP compliant under 21 CFR 111?
- What share of the $605,220 in revenue came from paid advertising versus organic search, repeat customers, or subscription, and how has cost per acquisition moved over the year?
- What is the subscription or repeat-purchase rate, and how many customers have ordered more than once?
- Does the seller personally appear as the face of the brand on social media or packaging, and what happens to that following and content library after the sale?
- What certificates of analysis or third-party lab testing exist for heavy metals and contaminants on the mushroom extracts used, and who holds that documentation?
- 3
Take it to lenders who do this size
Talk to more than one. Rate is the least of it: the lender who has done fifty of these in California will close, and the one who has done two will waste your quarter. Below are the lenders whose typical deal size actually fits this one.
- 4
Structure the offer around the coverage
Our structure clears the floor at 1.65x, and a lender will run its own version with its own add-backs. If the earnings come back lower than stated, the price has to come down or the seller note has to grow. Model both before you make an offer.
Model it yourself
Who we would call
Active California acquisition lenders whose typical deal size fits this one.
- Live Oak Banking Company
158 loans in CAmedian $760,000median rate 9.00%~20 days to first disbursement
- Huntington National Bank
85 loans in CAmedian $346,000median rate 9.25%~32 days to first disbursement
- Open Bank
64 loans in CAmedian $902,500median rate 8.75%~33 days to first disbursement
Loan counts and medians are that lender’s change-of-ownership loans in California, FY2025 to FY2026 Q3. Funding speed is the lender’s national median from approval to first disbursement. Names link to our data profile for each lender.
The fine print
The statements this write-up makes about the trade and its rules, as opposed to the figures, were checked against public sources on September 17, 2026. 5 claims were checked.
Run your own numbers
The deal analyzer models price, seller note, equity injection, and DSCR under current SBA terms, with every assumption adjustable.
Open the deal analyzerListing facts as stated by the listing on September 19, 2026, not independently verified. Structure, payment, DSCR, and injection figures are our own computation under the assumptions above, using the Prime rate as of September 28, 2026. Lender shortlist from the SBA 7(a) FOIA file, FY2025 to FY2026 Q3, as of June 30, 2026. Methodology. See an error? Email us and we will correct it.