From Minority Stake to Double EBITDA in 2 Years
New York-based Neel Bhargava breaks down how a minority investment into a Crunch Fitness franchisee turned into a home run, scaling from 10 to 74 locations with multiple recapitalizations along the way. Neel explains the value of thematic focus, outlines the opportunity of franchises, and spotlights the importance of strong management teams.
Neel Bhargava’s route to becoming an independent sponsor was unconventional; he was a growth equity investor and then a venture investor at the New York Times, among several other experiences. Neel pivoted into entrepreneurship by launching NB Group in 2016. What followed was a textbook example of how a flexible and relationship-driven approach can create outsized value.
The Crunch Fitness deal, Neel’s first as an independent sponsor, wasn’t a majority control buyout. It began as a minority investment behind a high-performing franchisee operating 10 gyms and generating $4.5m in EBITDA. Over just 18 months, the business doubled both in gym count and EBITDA. Today, it has grown to 74 locations and has been recapitalized multiple times, with Bhargava’s team still holding a passive minority interest.
The secret the success included working alongside a proven, high-performing management team. While many sponsors seek full control, Neel emphasized the flexibility independent sponsors can bring to the table.
This flexibility allowed NB Group to pivot from a planned majority deal into a minority structure when the sellers got cold feet, without compromising alignment or governance. Neel and his capital partners secured key minority rights, including veto power over capex and exit terms, allowing them to maintain influence without operational control.
Their success was also a result of a clear thematic focus. Instead of casting a wide net, NB Group narrowed in on high-value, low-price gym concepts in the health and wellness sector. Neel believes this space is both capital efficient and scalable, which he explains in detail during the interview.
Since launching NB Group in 2016, Neel has witnessed the independent sponsor space evolve from a fringe and frowned-upon model to a more widely recognized and competitive landscape. Today, more sellers and intermediaries understand what sponsors bring to the table, but deal flow remains the hardest part. As Neel puts it, raising capital has never been the real constraint. Finding proprietary, quality deals is (still) where the game is won.
Check today’s new episode of the Minds Capital Podcast with Neel Bhargava.
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Quadruple EBITDA in 3.5 Years, Then Exit at 14x
Former theater director Cory Sandrock explains how independent sponsorship is just stagecraft in a different suit: cast great people, raise funds for each production, and deliver standout performances. Cory shares how he struck gold in home services, why he avoids herd behavior in crowded sectors, and how leaning in on terms like turning off fees or yielding economics attracts the right partners and builds long-term value.
Buying 9-Figure Deals
Renaud Besançon is the founder of Ceres Industries Capital, one of Europe's leading independent sponsor firms. Free from the constraints of traditional funds, Renaud's team targets "non-vanilla" mid-market acquisitions (€20m-€75m EBITDA), often closing them at 30-40% discounts. After 20 years as a sponsor, with a 30-year WIP investor database, Renaud details how he blends "back-to-basics" PE centered on operational value creation with deal-by-deal pioneership in France.
Pushed Out by Anchor Investor
Neal recounts the moment his anchor investor retraded him at the five-yard line of a $7m EBITDA acquisition. The terms were gutted, leaving only a 2% closing fee. No management fee, no carry, no long-term involvement. The shock was real. But instead of burning the bridge, entering litigation, or walking away empty-handed, Neal took the deal. It gave him a track record, credibility, and sufficient capital to keep searching.
