5.8x MOIC
5.8x MOIC. In 2019 I invested in an all-equity 100% acquisition of a moderately-growing target. The entry
M&A
301 posts
Revenue Since Inception
One of my favorite charts is “revenue since inception." Usually CIMs only include 3 or 5 years of financials,
"Is Search A Bubble?"
"Is search a bubble?" No. (a) Valuations for SMBs and lower-middle market PE transactions have stayed disciplined
"Gap Equity" For Trad-Searchers
It's amusing how traditional searchers tend to position a shortfall in equity as a prestigious "gap equity&
Weekly Recurring Mtgs
If you have a deal under LOI, put a weekly recurring hour-long meeting with the seller in the calendar
Avoid Coffee Meetings
Coffee meetings with brokers, peers, and intermediaries are often a productivity trap: people feel they get stuff done, have relevant
When to pivot
Thesis-driven searches are compelling (“here is what I’m going to build!”). As is specialized sponsors with deep vertical
Value of niche experience
Searchers who bring super niche experience have an incredible edge. There’s nothing more persuasive than talking to a searcher
Wives kill deals
2-3 years ago I lost a deal because the family didn't think I was paying enough. I
Independent Sponsors vs. Self-Funded Searchers
Independent sponsors vs. searchers: I recently posted about the differences, and here's an overview of the similarities 😄 Congrats
Inbound leads
The holy grail for a dealmaker and any other business is inbound leads. Keys for inbound leads: • Attractive value proposition
Waiting 7 Years
I often chat with prospective searchers who want to start their journey. Recently I talked to someone who had called
Right Buyer, Right Time
It’s not just about being the right buyer. It also has to be the right time. It’s the
Private credit before it was "cool"
“We’ve been doing private credit since before it was cool to call it that." - Hong Kong-based family
Self-Funded Search vs. Independent Sponsors
At Minds Capital we invest equity in deals from both searchers and independent sponsors. Below is an overview of how
"Step-up equity"
"Step-up equity." Self-funded searchers use this term erroneously. They claim that if you inject 100% of
Yearly Headwinds
Recent history of operational headwinds: 2020: COVID 2021: Supply chain 2022: Inflation 2023: Labor shortage Still trying to figure out
Always disclose yellow flags ⚠️
When creating an investment memo, you might be tempted to think that not discussing risks (yellow flags) makes for a
🚩⚠️✅ 3 DD Categories
When evaluating a deal, I categorize my findings in 3: 🚩 Red flags: Deal killers. ⚠️ Yellow flags: Every deal has them,
SaaS diligence
How to value SaaS companies, from Signal Hill in 2016. We're diligencing a SaaS deal right now, and
PG vs. Skin in the game
Yes, a personal guarantee qualifies as “skin in the game.” It will keep the searcher engaged. However, “skin in the
Seasonality vs. Cyclicality
People conflate seasonality and cyclicality. They’re different and unrelated. Examples of seasonal businesses: Christmas trees, fireworks, ski slopes, air
Rule of 40
Rule of 40 = Healthy & Sustainable Business = Revenue Growth (%) + EBITDA margin (%) = 40% or more Applicable in SaaS
Negotiating NWC
Negotiating working capital - inventory, receivables, and payables - is often the most contentious part of a deal. Here is how I
