All right. Good morning, everybody. Why don't we get started? Thanks to all of you for being here today in this beautiful building on a beautiful Monday morning in New York. Thanks to everyone also who are joining us online via the webinar. We have a great day planned for you. For those of you that are on the webinar, we're gonna do some Q&A at the end of the formal presentation, and then again at the end of the fireside chat. Actually, I think we'll do it interactively during the fireside chat. So to the extent that you have questions, can you please email them to james@haydenir? So that is J-A-M-E-S @ hayden, H-A-Y-D-E-N-I-R .com. I'm J.T. Fitzgerald, CEO of Kingsway. We've got a great slate of presenters here today.
Kent Hansen will be walking us through a little history of the company and how we're structured. I will revisit some of our core principles that I outlined in our annual shareholder letter every year and just sort of spend a little time talking about those. Last year, we at this Investor Day, we talked about some of the reasons why search funds fail and how we were going to attempt to bend the curve in search. By that, sort of change the conditions to improve the probability of success. And so Charlie Joyce is going to spend some time walking you all through all of the wonderful work that he and the team have done to build our platform, our engine for successful acquisitions.
And then, we're gonna transition to Peter Dausman, an OIR, now CEO of DDI, and he's gonna walk you all through his journey, here at Kingsway, first as an OIR and now as a president of a wonderful business. I'd be remiss if I didn't remind you all of our forward-looking statements at the beginning of the slide deck. I encourage you to read those and the risk factors in our SEC filings. Yeah, so wonderful to be here. Thank you all for joining us, and with that, we'll kick things off, and I'll invite Kent up.
Thanks, J.T. Good morning, everybody, and thanks for joining us here in person and on the webcast as well. I'll be brief. I think people are becoming more and more familiar with us as a company and the things that we've done over the last few years, but we'd just like to recap a few different things. So we've been a company since 1989, originally founded in Canada, originally listed on the Toronto Stock Exchange. We're neither of those anymore. We're listed. We're a US company listed on the New York Stock Exchange. We have about 400 employees spread throughout our operating companies. You can see our financial metrics there.
You know, we're very proud of our, our net debt number has come way down over the past few years, and we'll have a little slide on that in a couple of minutes. You know, our share price continues to be strong, going back to October 6, 2021. Why that date? Well, that was our sort of first Investor Day under y ou know, after we came out of blackout in what we call our dark period, and our stock has been up about 40% since then. Some investment highlights. Most of you are probably familiar with these. You know, we're a collection of recurring revenue, high margin, asset-like growing businesses. That's the sweet spot that we, that we like. Our run rate EBITDA is $16 million-$17 million.
I know this is a, we get a lot of questions on this metric, so I'll just take a minute to clarify that. This is backwards-looking. It's not meant to be forwards-looking. And it's a number, if we had owned all the companies that we have now for the past 12 months, that's what we estimated our, our EBITDA would have been, and we adjusted slightly for the market float on our extended warranty companies. And by that, I mean the, the funds that we, that we invest in, in, bonds and, and whatnot from the, from those trusts. We continue to have a large NOL. It's about $626 million at the end of the first quarter of this year, and we continue to shield, a lo-, our federal income taxes.
So it's a federal NOL, and we pay almost no federal income taxes, which we think is a great advantage for us. We have our disciplined Kingsway Search Xcelerator, which Charlie will get into a little bit more in a bit. Significant insider ownership, directors and management, we own collectively about 55% of the company. That came down a little bit from last year, and that's just because of all the warrants that we had exercised over the past year or so, and we did some share buybacks as well. We've really simplified our capital structure over the last few years, getting rid of some non-core investments, some non-core debt, and I think our story has become a lot more understandable because of that, or we hope, or we hope it has.
Just briefly go over our structure. We have a lean, mean holding company. There's 10 of us at the holding company, based in Chicago. J.T. and I are part of that structure. Our corporate accounting team is part of that structure. We do things like consolidations, the SEC filings, taxes, all that fun stuff, but then that's where we also allocate capital, and we oversee the investment funds that we do have. And then, as I think people know, we have the extended warranty side of the business, currently four extended warranty companies, and then on the search accelerator side, we have... I always have to stop and count, I think it's about five now. So we keep growing on that side, and we'll have a little bit more financials on that in a minute as well.
This is our EBITDA growth going back to 2018. That's when J.T. was appointed as CEO of the company. You can see kind of a high watermark in 2022, and then we did sell one of our warranty companies, PWSC, in 2022, so those results have been removed after that year. This is not a pro forma, so it's included in the historical results. 2024, the TTM 2024, as we've noted in our past two earnings calls, has really been impacted by higher claim severity on the extended warranty side. So really, parts and labor inflation started to kick in around this time last year. So not a huge impact in Q1 last year, but definitely Q2, Q3, and Q4 going forward.
So we would anticipate, perhaps the comps year over year will be getting better going forward. And also, one of our companies, SNS, is a nurse staffing company based out of Southern California, and the demand for travel nurses really kind of swung the other way last year, and we think it kind of swung too far, but we think the long-term prognosis remains pretty good for that business. Just a little bit deeper dive on extended warranty and Kingsway Search Xcelerator. So for the TTM period, extended warranty is about 66% of consolidated revenue and about 59% of EBITDA. And again, it consists of those four companies. Three auto companies, they sell auto extended warranties through dealers and credit unions, not direct to consumer.
So we're not the postcards you get in the mail, we're not the ads you see on TV. If you're getting a loan at either an independent dealer or credit union, they may be offering one of our products. And then on the Kingsway Search Xcelerator side, growing, these percents we would expect to grow over the next few years, but 34% of revenue and 41% of EBITDA. And you can see there at the bottom, the companies that comprise that and when we've acquired them, and the most recent ones were SPI, a software company, last September, and then DDI last October, which Peter is gonna get into a lot more detail here later on this morning. Just-- We just kinda like to remind people what we've done.
As you know, we're always looking forward, but sometimes it's good to sort of stop and sort of take a review of what we've done, and over the last 18 months, we sold CMC, that rail yard asset we used to have. So we sold that at the end of 2022, so that really cleaned up a lot of fixed assets off of our balance sheet, as well as debt. And we'll see in a minute, that's where our debt starts to go way down. We used to own a lot of commercial real estate property, and NLIG was the last one that we sold early last year. Also in Q1 of last year, we bought back a substantial portion of our subordinated debt. We call it TRUPS. We had five tranches.
We bought back four of those for about $0.61 on the dollar. And we couldn't buy that last one back because it's stuck in a CDO somewhere. It's very difficult to buy those out, but we would like to do that if we could. Our preferred stock converted. We purchased SPI, DDI. We did purchase a substantial portion of warrants last year under our current stock buyback program, and we did have a substantial portion of warrants exercised during the year, which was a nice cash infusion to our balance sheet. As I said before, we've reduced our net debt significantly over the past few years. The big drop that you see from 2021 to 2022 was the sale of CMC. That debt happened to be fully funded from the rental income.
And then from 2022 to 2023, when we sort of cleaned up some of this other non-core real estate investments that we had. So net debt at the end of first quarter this year was about $34.9 million. We just have that one little slice left at corporate, and the rest is really debt at the operating companies that is non-recourse to the parent company. So the operating companies... Just a reminder, when we buy a company, we usually infuse equity and debt. Could be 50/50, depending upon the size of the transaction, and then that operating company is paying down that debt out of its own cash flows. And then just before I hand it back over to J.T., just some things that we're doing.
We do we still have our share repurchase program. It was set to expire in March of this year, but the board renewed it for another year, and we have about $2.8 million left that we can buy through near the end of March next year. We do have that VA clinic that we bought a few years ago, that's currently being held for sale and being actively marketed with a national broker. And then as the rest of the team is gonna talk about, you know, we're targeting two to three acquisitions a year, between $1 million-$3 million of EBITDA, and we're you know, actively recruiting our next set of OIR candidates.
So with that, hopefully, I didn't go too fast, but, you know, I wanted to leave enough time for the, for the meat and potatoes to come. So I'll turn it back over to J.T.
All right. So I'd like to spend a little bit of time going through what we call our guiding principles. A gentleman named Larry Cunningham recommended to me that we create or document a set of fundamental concepts that we believe in as sort of a shareholder owner's manual. And I think that, what we have here, you guys can count on as things that are, fundamentally important to us as management of Kingsway, created this little picture here. If the objective is to compound intrinsic value per share, and the per share component is very important, we believe that we can build that on, first, a foundation of exceptional talent, a very long-term perspective, and we are the fortunate beneficiaries of a very nice, tax asset, but sort of approach everything from a tax efficiency standpoint.
And then the pillars of that, one is, the importance of decentralization. Kent spoke to that a little bit in the intro. Execution, so execution at our operating businesses, and effective capital allocation. So that's sort of a little picture of how we think that we're gonna build something that will allow us to compound intrinsic value per share. I'll start with the concept of decentralization. This is very important to me. Our structure is what we call sort of hard-form decentralization. As Kent mentioned, 400 employees, only 10 of which sit at the holding company. Each one of the businesses we own have their own P&L and balance sheet, and specifically within the search accelerator segment, they have their own full capital structure, bank financing, et cetera. And so, they own their operating performance.
So, you know, why is decentralization important? I think, first and foremost, it's the only way to attract, and probably more importantly, retain really talented people, is to provide them autonomy, and opportunity for growth. We also think it's incredibly important to have the decision makers, the people that are defining and executing the strategy for their businesses, to be the ones that are the closest to their customers. We believe in a concept called voice of customer. We listen to our customers. We want the people that are making the decisions to be the ones that are listening to their customers. And I just fundamentally believe that decentralization is really the only way to unlock this sort of entrepreneurial spirit, where the absence of bureaucracy is what allows businesses to thrive.
If you think about bureaucracy, I mean, I think in its sort of most genuine form, I think it's there. People think it's good for cost synergies, right? "If we can just do some of this and spread some back office or things across a bunch of businesses, we'll save money." At its worst, it's there to prevent against incompetence or fraud. And I think that if you have really great people, you don't need any of that. And so it really comes down to the talent imperative. The hard-form structure will allow us to scale with a very lean holding company. The next pillar is accountability. We like to say that it's sort of entrepreneurs in a supportive environment.
With decentralization, we still do want to create an environment with what we call a cadence of accountability. And so all of our operating unit managers know that we expect transparency and accountability on a very important cadence, whether it's weekly, monthly, or quarterly, depending on what we're talking about. And then we create incentives for our managers tied to their execution. Annual cash bonuses are tied to return on invested capital targets, and then within our KSX segment, their equity performance is tied to our performance as equity investors. We have what we call entrepreneurship in a supportive environment. To support our young CEOs with their execution, we've also created what we call the Kingsway Business System and have that documented in a learning management system.
And then we've created the KSX Advisory Board with some really talented people to help our OIRs turned presidents be effective operators in small companies. One advisory board member is here today, Will Thorndike, and we're gonna have a wonderful fireside chat later today. The final pillar is capital allocation. That is a very popular set of words. To us, it means sort of what we do with our cash. And for us, the first is a focus on organic growth of the things that we own. We have this concept. We sort of bifurcate our expenses between strategic and non-strategic expenses, with the goal of cutting to the bone what we would qualify as non-strategic expenses and redeploying those dollars to organic growth in our operating businesses. And that creates an investor mindset for our operators.
How do I find the money to invest in organic growth? The next thing is focus on inorganic growth or acquisitions, and Charlie's gonna talk about the work that we've done to build the engine to support two or three acquisitions per year in the KSX segment. And I think we've created a really nice platform that will allow us to scale that even more. We talk about defining the spec, what good looks like in terms of the businesses we're trying to acquire, and then create a set of processes and a system to deliver that spec. And then once you have that system in place, then you can really scale it. And as Kent mentioned, we also are infrequent, opportunistic buyers of our shares.
You know, our sort of goal on a share buyback plan would be. You know, it's one of the benefits of being a public company, quite frankly, is that from time to time, the market will allow you or afford you the opportunity to buy your shares back at a discount to your view of intrinsic value per share. And so that has allowed us to do some accretive repurchases of our stock. So the foundational elements, talent. I think that KSX is a very unique platform, particularly within a public company, for us to attract really wonderful people. The search fund model, as many of you know, is very popular.
We're just one flavor of that, but I think that there are attributes of what we have, you know, the permanency of our capital, you know, which creates this sort of long-term view, our tax asset, and the infrastructure and support, both on the search phase and the operating phase, that will allow us to attract what we think are really great people that have a set of attributes that we think are predictive of their ability to be successful managers in small businesses. So we start with horsepower. This is just a crude rubric here, five Hs, we call it. Horsepower, to us, that means sort of mental agility and curiosity. The next is hunger.
We've, we sort of call that sort of the will to win, combined with hustle, right? You can have hunger and not hustle, so we wanna see grit, tenacity, perseverance to do what it takes to win. Humility is incredibly important. So these are sort of in ascending order of priority. To us, humility is incredibly important. A lot of times you'll find people with great horsepower, hunger, and hustle that lack the humility, and we think as a new manager in a small company, this is, like, incredibly important. And that, to us, is sort of self-awareness, authenticity, the ability to connect with people across the spectrum, and importantly, the willingness to both seek and take advice and act on it.
Then the most important for us, I think generally, but also, important in a decentralized structure, is honesty, unimpeachable integrity, transparency, and accountability for results. So that's how we screen for our OIRs. You'll meet one of them today. I think that he oozes all of these things, and that will come through, when you get a chance to speak with Peter. So we're very focused on, bringing wonderful people into our small company. The next foundational element is a long-term view. I think that we're lucky that we have shareholders that also share this perspective. The permanency of our capital, which is sort of a unique feature of being a public company, allows us to take a very long-term approach.
We like to say that we're-- we think about things in 20-year time frames, and that'll... and that guides our decision-making and also our, our incentive structures for, for all of our managers. And for us, so long as a business that we own continues to exceed our internal hurdles for return on capital, our ideal holding period is sort of forever. I mentioned earlier that our job is to compound value per share over a long period of time. The final foundational element here is taxes. The great quote here, a gentleman named Ian Cumming, co-CEO of Leucadia, "Earnings are good. Earnings without tax are even better." You know, we're fortunate that we inherited, as a management team, over $1 billion of net operating loss carryforwards when we took over.
We've used a lot of them, but we still have... I think that's a typo, roughly $623 million of NOLs as of year-end. And those will allow us to shield both ordinary income and capital gains taxes for many years to come. And so with no leakage for federal taxes, we ought to be able to compound capital at higher rates than if we were a taxpayer, quite simply. So, we're very fortunate in that regard. And so just to kind of wrap it up, our strategy for growth is to sort of grow organically in the businesses that we own. We try to buy businesses that are in industries that are supported by long-term secular tailwinds and then apply, you know, great operations.
The focus on strategic versus non-strategic expenses to free up dollars to invest more in organic growth. A lot of different ways to do that, whether it's just sort of penetrate your existing market, bring more products to your existing customers, move adjacently into new markets. And so we're thinking about how to grow these businesses organically all the time. And then the sort of second engine of growth is the growth via acquisition, and we think we have harnessed a really interesting model, right? Sort of search fund investing in a public vehicle to grow via acquisition, and then own those businesses for very long periods of time and then scale that over time. And we have some wonderful businesses in warranty. I think I've said it before, we really like some of the fundamental attributes of warranty.
The problem is, so does everybody else, and so I think that our ability to buy more businesses at prices we would be willing to pay, at least recently, has been a little bit challenging. But that doesn't mean that we aren't always looking. So, you know, one, partner with exceptional talent, wonderful entrepreneurs, acquire a portfolio of great businesses, apply operational and strategic support, and hopefully, compound capital at very high rates over a very long period of time. As I mentioned last year, we talked a bit about how we were going to bend the curve in search investing, identify the reasons why search fails, and then alter the conditions to improve the probability of success.
Charlie Joyce, who's gonna come up next, and the team have spent the last year, really focused on this and have built a wonderful set of tools, a platform, and processes to, I think, improve the probability of success in the search phase. Stuff from as simple as executing NDAs. When you're executing, you know, dozens a week, how do you get better and faster at that? To industry game boarding and underwriting and outreach. So, he's gonna give you a deep dive. He's a little worried it's a little too deep, but I think that it will be really interesting. The whole point, you know, you guys all know the business. I think this is an opportunity to get a deeper dive into how we're running our search process at KSX.
With no further ado, turn it over to Charlie Joyce.
Thank you, J.T. All right. Thank you very much, J.T. It's always easy to follow up J.T. when he does such a great job of laying out the foundational principles that form the basis for Kingsway. We're able to translate our approach in such a strong way because everyone on our team is able to quickly identify and coalesce around these simple principles which unify us. Since starting with Kingsway last year, there are three questions which we most commonly get from investors and folks interested in learning about our unique approach to small business acquisitions, and those are: how do we, you know, set ourselves up for success in small business M&A? Can we close two to three deals per year, as we've set out as our goals? And can we potentially do more than that over time?
I'm here today to share with you how we think about these common questions and maybe go a little bit deeper into what we are doing to actually make this a reality. So when you focus on Kingsway's response to those three areas, they really hit three themes that I hope will reinforce what you just heard from J.T. First is quality. How do we design quality into our process? This is different from a manufacturing line, where we're going to see a widget pop off the end and be able to inspect it right away. Our investments take time to mature and grow, and we want to make sure that we're making every possible attempt early in the process in order to weed out negative signals and characteristics that we understand correlate to positive outcomes and success. Repeatability.
We want to make sure that we are consistently delivering the same results and applying the same vigor to our operators that we're supporting and the opportunities that they bring to us. In 2023, we've made substantial moves from being a person-driven company to a process-driven company by defining the spec that we are moving towards and building into our process specific checks and balances that are going to help move our end product, the deal that we are investing in, towards a higher quality outcome. And finally, scalability. We are creating the conditions for success 10 years out. It's really a great organization where we are building in the open and actually showing folks the way that we are doing that, and yet able to take a measured approach towards creating value in the long term.
So what we're going to go through today is a quick refresher on the operating context of Kingsway Search Xcelerator, why we've chosen entrepreneurship through acquisition as our M&A model, and who we are in the context of this emerging niche. How we approach M&A in order to design quality into that process by bending the curve towards success, as J.T. mentioned earlier, and specifically diving into the Kingsway Business System, which is how we deploy those founding guiding principles into our day-to-day processes. I'll take you through a couple of specific examples of what we've done in the last year in order to create those conditions for success, and then finally go through an example of our target deal economics and show that powerful impact of compounding capital over a 10-year time horizon.
Starting off, Kingsway Search Xcelerator operates in a growing and underserved niche, which you come to know as search funds or entrepreneurship through acquisition. If you look at the number of search funds that have been formed in the last 10, 20 years, we've seen that number substantially grow year-over-year as interest in this model has grown, and the results have proven out to show that it is able to consistently produce high-quality investments. We, within this timeframe, sit in a unique place where actually we've had the opportunity to participate in the ETA market for most of the time that it's been a relevant subset of private equity.
J.T. brings to the organization his experience as an investor and search operator in the segment, and then, when he joined Kingsway in 2017, that really set the company up on the current direction that we're in today. So since 2020, when we launched the Kingsway Search Xcelerator, we've executed five transactions across B2B services, healthcare, and technology. And when you look at those characteristics of the key characteristics of the investments, they match up nicely against what we consider to be the median investment in the search fund space.
This is something we're able to point to based on the great work done at Stanford University to bring together all of the different investors in the space and allocate and consolidate the data so that we can learn from each other and build in the open. And finally, as J.T. mentioned, exceptional talent is foundational to what we are building here at Kingsway. So we've had the opportunity to recruit really great operators who are both standing in the CEO seat of their small businesses today and as well as looking for new acquisitions. Together with this model, we have experienced investors pursuing thoughtful capital allocation behind strong operators who have both the autonomy and incentives to execute. So what do we mean when we say bending the curve?
Bending the curve towards success means altering the conditions in order to improve your outcomes. We're talking about designing quality into our process so that we can mitigate the causes of failure and help control for our returns. If we look at this illustrative example, we're really trying to address both search risks, the probability of not identifying a transaction, and the financial risks, the probability that that transaction might not actually return your total invested capital. So we've gone through the data offered to our cohort and identified the key elements that are driving these causes of failure, and then built into our process the specific controls to help aid operators along their journey towards acquiring one great company that they can then operate for their careers.
Looking in here, we've got the end-to-end investment process, starting off with talent acquisition and recruiting and ending with your final acquisition. I've highlighted a handful of specific risks in here that we're gonna go into examples of how Kingsway has addressed those in 2023, but want to frame up for the group that we have, in just this small area, addressed five of the top key risks that show up in small business acquisitions. First, getting the right talent on board. Small businesses are plagued with not having access to the right talent to help them succeed and grow, and the ETA model is a great partner to help solve for that by bringing unique incentives to bring in excellent talent to these small opportunities.
We've divined the right talent candidate scorecards in order to identify those candidates and segment what behaviors they are going to be able to influence over their journey as a leader and what are really foundational to their personality. We figured out industry selection. How do we orient our operators from day one to pursue industries that have the highest outcomes, and as measured by investment returns? We want to look for industries that have positive cash flow economics, high margins, and good industry tailwinds supporting long-term growth. And sourcing effectiveness.
While there's a lot of different opportunities and approaches towards sourcing deals in today's private equity market, we are constantly studying those tactics and offering up the best practices to our OIRs so that they are ready to proceed from day one, running an efficient pipeline that can then be carried over, you know, year after year. And so with only a handful of these mitigants, we're able to substantially control some of the greatest indicators of failure in our search segment and even move towards a higher outcome for our operators in timelines that we hope are better than or in line with your average search fund acquisition.
So you heard J.T. talk earlier about Kingsway Business System, and the way that I think about Kingsway is really taking best practices that are studied and applied at the best companies in the world and translating that to our experience for small businesses. We know leadership is incredibly important. Talent, as I've discussed, is a perennial problem for small businesses that are trying to grow and recruit the best operators. Setting out vision and strategy also helps the entire team coalesce around a unified goal and work together in a cohesive way. And then all of this comes down to execution. So when you think about KBS in action, across these four areas, there's discrete examples of how Kingsway is helping their OIRs and their CEOs to be successful.
From providing tactical guidance on effective communication and time management on a leadership level from our Kingsway Advisory Board, to performance management processes that are supported by strong incentives specific to the ETA segment of small business. Vision and strategy is supported by a strategic planning process, where we're establishing clear, measurable value creation goals for our operators, which, as J.T. mentioned, tie back to the incentives and cash compensation that our CEOs receive. And then execution, all of this is supported by policy deployment and KPIs that support our culture of accountability. So similar to how we're here today, building in the open and showing all of our results, we do that on a weekly basis with our team to make sure that we are all holding ourselves accountable to the strongest decisions and execution that we can manage.
So starting to design quality into the process means we've got to have our spec, have to have our process well-defined, and this is our simplified process map. So we've taken the familiar end-to-end process, starting with talent recruitment and moving down through acquisition, and then identified all of the key elements of our process, handing off opportunities through the funnel in order to get them to a closing. We've identified all of the individuals who must be responsible and engaged in those decisions and the systems and technology used to support them. And by starting with this spec, we can further refine what are the elements that are going to lead to failure in a process and make sure that we're supporting our operators with a coordinated process that really helps to address those causes of failure.
As J.T. mentioned, something as simple as an NDA when you're doing 12 of them a week, 1,000 of them, you know, in a year, can really be challenging. So finding a cost-effective and tech-enabled solution was a big uplift for us in managing the high volume of contracts. Talent network is incredibly important, maintaining a connection to all of the different outlets that we have from top MBA programs to ETA clubs and investor communities in the ETA space. So having this kind of end-to-end process really sets us up to manage who's responsible, how do we execute, and how do we ensure a consistent product from our process? Bending the curve in talent recruitment. So finding the top candidates is a job in and of itself.
Similar to finding a deal, we need to look through hundreds of candidates in order to find the best operators for our companies. While we understand this is not necessarily the most efficient way, we believe it's foundational to our investment approach because the talent we bring into the company will be determinant of the company we acquire, will the operations and the ability of that business to scale. And so we really put a lot of effort into screening these candidates with a 12-step process built on TopGrading. TopGrading is a management, recruiting, and hiring methodology that has been designed to help reduce your mis-hire rate by having really standard stages in the recruiting process and uniform deliverables that allow you to compare candidates and find the best the best result.
So the structured process allows us to sustain quality. Our scorecard specifically seeks for A players, as defined by those who can learn and develop over time while having the core competencies necessary today for us to build on. A thread of reference check is an early signal into our process to allow candidates to know that we are going to take this very seriously and to vet all of the information provided, offering a more consistent and reliable information gathering process earlier on. And then we conduct what is known as a chronological in-depth, structured or CIDS interview.
While anybody can get up and tell their story for an hour, try doing it for two, three hours in a room with J.T. That's where we really get down to the meat of our operators and show, you know, the clearest look at somebody's capacity to really stay out and run the long race for our acquisitions. As I mentioned before, you know, we're looking not just at the behaviors that they're demonstrating in the room when we're interviewing, but also taking a full picture of our candidates to understand: how can these behaviors change over a career? Understanding that we are not recruiting for, you know, one, two-year position, but rather a long-term role that is going to align with our objectives of compounding capital for the long term.
Today, we've been able to fill our Operator in Residence class with network referrals, applications from MBA programs, and other inbounds, such as the Search Fund community, our website and conferences. We are seeing a lot of interest among top MBA programs that have new ETA clubs as the interest in small business acquisitions grows. So we have established relationships with all of these organizations to help engage with the students at these programs, tell them more about Kingsway, help searchers learn and understand about what's going on in the ETA market. And it's a great area to learn from as well, because we see a lot of people actively building coming out of MBA programs.
And so these are both beneficial to us as we look for talent and as we learn new ways of approaching the ETA space. We'll go through roughly 50-100 applicants per cycle. Generally, a cycle would be the first half or second half of the year when we're running a recruiting process and ending up with a highly selective process that yields 1%-2% offer rates overall. So our strongest source of candidates are in-network referrals, those individuals who, you know, work with our team or through any of our deal partners, investors, where we are able to really rely on our internal network in order to find the best talent. But still, we're putting everybody through a highly restrictive process.
Next up on areas where we focused this year has been on industry selection. Industry selection is often cited as the number one source for, you know, outcome in search, either a failed outcome, meaning failure to acquire and, and return all your capital, or for the top quartile returns are driven by strong tailwinds on the industry that they select. And so with this knowledge, we really want to focus our proprietary efforts, that being the rudder that drives our strategy and allows us to choose where we want to end up on those industries which demonstrate the key criteria we understand to correlate with positive returns. So those are large and growing, supported by secular tailwind, fragmented opportunities without, you know, dominant competition, and with many chances for shots on goal in acquisition, as well as quality business models.
So low capital intensity, strong margins, driving high cash returns. As we've seen with our search accelerator process, it's easy to fall in love with a deal. It's easy to spend time on a transaction. Days become weeks, weeks become months, and ultimately, our operators are really interested in getting into the operating seat so that they can run these businesses. And so we are supporting them by providing the institutionalized knowledge that we've gained over our careers as investors to assess these industries and constantly identify what are the best trends that are going to get us 10 years from now to the return profile that we are setting up to build.
Lastly, when we look at sourcing and how we are actually driving the efficiency of our funnel, we are starting with proprietary outreach, where we want our operators to generally be spending about 80% of their time in a given week on engaging with business owners and identifying new opportunities. So in order for them to have a full funnel of business owners to talk to in a week, they need to first identify the leads and then engage them. And this translates to, you know, anywhere between 200-400 monthly leads fed into the top of your funnel every single month.
Now, when we bring on a new operator, we're always telling them there's a lot of different ways that you can perform a search, and that you can spend time, depending on your background, going very broad, or you can spend time going very narrow. It all depends on the operator. The individual who we hire is tremendously important to the outcome and the business that we ultimately acquire. And so we have the operators set their own individual targets, leading into this culture of accountability, where they are empowered to make their own decisions on exactly how they want to manage the trade-off between volume and engagement.
As they set the targets, they're able to then fill this into a week-to-week process where we are identifying and engaging leads, using the best-in-class data tools available on the market to get in front of business owners and set up conversations, potentially identify new proprietary transactions that we can pursue. Understanding there's a reality to this process where you pick up a deal, you start engaging with a small business owner. It's very hard to simultaneously, as a lean team, be managing your funnel. We've brought in additional sales development resources to help provide consistent, high-volume outreach that helps support our operators as a whole pool, providing that balance over time, where we're able to actually get, you know, effectively double our volume from professional, best-in-class resources that are showing us how to most effectively reach our targets from a technical standpoint.
So thinking about spam filters, how do we, how do we, you know, use the best technology to ensure the right deliverability? These are all core competencies that market solutions bring to us when we are working with external partners on the sales development process. Equally important to the M&A process is intermediated sourcing. So while everyone would like to find a proprietary deal, the reality is many business owners today are, are going to intermediated processes in order to get the best valuation, get the best, best exit, and potentially the most eyeballs on their transaction as the M&A process for lower middle markets becomes increasingly more efficient. So with our existing database and relationships, KSX is able to drive consistent deal flow within our target market of transactions around $2 million in cash flow.
So we have a highly selective, highly, highly specific database today that we work with, and through ongoing business development, we'll look to 3x that in 2024, by engaging new active intermediaries and pursuing direct marketing to those individuals. With this intermediated sourcing engine would become the funnel through which we'll see the broadest spectrum of the market and be able to be highly selective for those that match our criteria. I used earlier the analogy of a rudder that's driving our strategy for proprietary. I often think about this as, you know, if we're sailing on a river, the intermediated sourcing is the market that's gonna drive us whichever way the wind is blowing. But we get to choose which direction we want to sail with the rudder of our ship.
And so we want to be, you know, aware of everything happening on the market in order to get the broadest possible context on what's driving trends in lower market M&A, while also being highly selective on those that we choose to spend our time towards. All right. So now going forward, looking at how do we scale this model for the next 10 years? We've set up the system, we've got the process down, we've moved out of the jungle into the more repeatable highway, where we are now pushing our results and focusing on execution. So I want to go back to the foundational assumptions that go into our M&A model and illustrate how does this scale over the next 10 years. So as J.T. mentioned earlier, we're looking to acquire a business between $1 million-$3 million in EBITDA.
We'll average that out and say our typical transaction is around $2 million in EBITDA. At this price point, we are, you know, imagining around 5-6x multiple, which is generally what we've paid for our transactions since 2020. We're also looking to apply 2-3x debt, a rather conservative figure, where we're able to get senior bank loans from 8%-10% interest, generally five-year amortization, maybe first-year interest only. Partner-