Warrants + Independent sponsors = đź’”
Warrants + Independent sponsors = đź’” A warrant is like a stock option, giving lenders the right to convert a portion of the
M&A
261 posts
Sunglasses when pitching investors
Don't wear sunglasses on your first Zoom call with a prospective investor.
1yr runway is too little
Most new searchers/sponsors give themselves 2 years of runway to close a deal. Remember that it usually takes 6+
When losing a brokered process
If you lose a deal in a brokered process (i.e., somebody bid higher), stay in touch with the broker
Options for excess cash
"What should we do with our excess cash?" is everyone's favorite question at a board meeting.
Public company in the search world
Kingsway Financial Services is a public company whose legacy & history is in the insurance & warranty industry. However, Kingsway
IS ecosystem is collaborative
The independent sponsor & search spaces are often characterized as collaborative, as opposed to the sharp elbow reputation of high
Where you live affects how you think
Where you live affects how you think. New York: AUM, fees & commissions. Your friends work at funds, your rich
Taking your baby, identity & purpose away...
Imagine if someone took your baby, identity, and purpose away. That's how it feels for many business owners
NDA still exists after deal closed
Just because the deal closed doesn’t mean your obligations in the NDA absolved.
"We are not founder-friendly."
"We are not founder-friendly," said Nathan Chandrasekaran, cheekily. In his experience, only 1 of 4 founders can succeed
$5-20m = Hard place
"Between $5-20m of EV is the hardest place to get a deal done."- Banker
Fundraising deal-by-deal = Tough
Fundraising on a deal-by-deal basis can be tough & tedious. I have met several sponsors who ended up doing a
Underwriting AI risk
How do you underwrite AI risk and opportunity related to deals in the lower-middle market? According to Jeff Goldstein, independent
Optimism vs. Distress
"I've been too optimistic about what there is left for me to do." - Searcher with
Schmooze the sell-side banker
How to schmooze the sell-side banker: (Cue: bankers want maximum commission with the highest possible certainty of close.) • Articulate differentiation
Sell-side banker isn't fundraising counsel
No, the banker representing your seller should not be your fundraising counsel. The lack of committed capital is the biggest
Efficient NDA
Amazingly efficient NDA-to-materials process: (1) Sponsor sent me a Google Form, asking for my name, entity, etc. (2) I instantly
Sell now vs. Hold longer
2 years in, a strategic offers 2x MOIC and 41% IRR. Do you sell? Yes, said Sarkaw Aziz, who exited
CEO should earn more than the Independent Sponsor
Sir Alex Ferguson, former manager of Manchester United, had a clause inserted into his contract that stipulated no player should
Please roll the closing fee
Most independent sponsors (GPs) roll their entire closing fee (1-2% of EV) into the deal, and often they'll
"Bumping" into 50% of deals
After 12 platforms and 4 exits I was surprised to hear that Rick Apple just “bumps into” half of their
The Rise of Family Offices
The rise of Family Offices is an enabler of entrepreneurial private equity: (i) Compared to institutionals, FOs have flexible mandates
Monster IS deal raised €350-400m of debt & equity
Independent sponsor deals aren't confined to the lower-middle market and <$10m EBITDA. This monster deal raised €350-400m
