Owner Dependency — David Hand Transition Risk¶
This is a top-3 risk factor in the acquisition. See also: deal/risks
Current Owner Involvement¶
| Metric | Value | Source |
|---|---|---|
| Hours/week | ~25 | FAQ |
| Day-to-day operations | 25% of time | FAQ |
| Strategic oversight | 75% of time | FAQ |
| Overall dependency | "Moderate, not absolute" | Thomas's completed DD |
What David Does¶
Strategic (75%): - Customer relationships (especially LANL contacts) - Quoting and pricing - Business development / bid decisions - Certification strategy and audit oversight
Operational (25%): - Reviewing operations - Paying bills - General oversight
What the Team Handles Without Him¶
- Mike (Operations) — Daily shop operations
- James (Shop Floor Manager) — Production execution
- Salina (QA) — Quality compliance, inspection coordination
- Sean (NDT) — Testing and certification work
(Source: FAQ, people/org-chart)
Transition Risk Assessment¶
🔴 High Risk¶
- LANL relationships — David has personal relationships with LANL buyers built over decades. These don't automatically transfer.
- Quoting knowledge — Pricing complex NQA-1 machined parts requires deep understanding of materials, machine capabilities, labor hours, and margin targets. This may live in David's head.
🟡 Medium Risk¶
- Audit navigation — NQA-1 and ISO audits require someone who understands the quality system and can speak to it. Salina can handle this, but David provides strategic oversight.
- Business development — Who's chasing new work? If David is the sole business development person, that function stops at close.
🟢 Lower Risk¶
- Daily operations — Already handled by Mike and James.
- Production execution — Machinists run machines. This doesn't depend on David.
- Quality execution — Salina and Sean handle inspection and testing.
Proposed Transition Structure¶
From MEMORY.md: Proposed $2,500/month for 12-18 months. Not confirmed by seller.
Key transition tasks: 1. Personal introductions to all LANL contacts (Question #13) 2. Quoting walkthrough / knowledge transfer on pricing methodology 3. NQA audit support if audit falls during/after closing (Question #14) 4. Customer and vendor relationship handoffs 5. Quality system walkthrough with Salina
The "90-Day Test"¶
Best single question for the seller call: "If you disappeared for 90 days, what breaks?" (Question #9)
This forces David to identify the true single points of failure without corporate-speak.
✅ ANSWERED (Apr 2026): - Visual weld inspection may need subcontracting. However, one of the current welders is working on getting his certification to take over the weld inspection role. - Bill paying would need to be taken over or done remotely (as currently done).
Interpretation: This shows LOWER owner dependency than expected — only weld inspection and bill paying are at risk in a 90-day absence. The weld inspection gap is actively being addressed internally (welder pursuing certification), which would eliminate the last operational dependency on the owner.
Open Questions¶
| # | Question | Status |
|---|---|---|
| 9 | If you disappeared for 90 days, what breaks? | ✅ |
| 10 | What knowledge still sits in your head? | ⚠️ |
| 11 | Which customer relationships are purely personal? | ❌ |
| 12 | Transition support — duration, hours, compensation? | ⚠️ |
| 13 | Will you make personal intros to all LANL contacts? | ❌ |
| 14 | Will you assist with NQA audit? | ❌ |