Advisory board for accountability
An advisory board is a great accountability partner. Advisors don’t need a formal arrangement or hefty compensation. Weekly emails,
M&A
261 posts
VC + LBO = IS deal
Zack Miller and his high school friend Johnny Lieberman combined their distinct backgrounds to launch Worklyn Partners, a dual platform
Initial trajectory define the investment
The first 6-18 months often define the trajectory of a PE investment. If successful, with stability & retention, the initial
15-year time horizons
For a PE investment, you need a positive 15-year time horizon for the target company: 0-5: You own it. 5-10:
Searcher recapping SBA7a loan
"My capital structure is starting to get pretty complicated…" - Searcher after 3 years and 2 add-on acquisitions
Independent Sponsor Bingo
Independent sponsors often pitch themselves as “different." But their talking points are often the same. If you're
"Very bullish" on US equities
Why I am "very bullish" on US equities: • The new tax bill incentivizes capex spend by accelerating depreciation
Seller notes can be renegotiated, after the fact
Seller notes can be renegotiated - after the fact. Last year we had a $2.2m outstanding seller note that
Ep24: 24 Add-Ons in 24 Months
Episode 24: 24 Add-Ons in 24 Months Clever way to start: Luis Reyes hired an analyst to research industries and
"I would never invest in a friend"
“I would never invest in a friend” must be one of the dumbest things I have ever heard. I get
Earnout Poetry
Earn-outs can be contingent on improved performance (growth) or stable performance (don’t decline). Earn-outs can be based on overall
When independent sponsors break up 💔
The flexibility of the deal-by-deal model also manifests in break-ups. 💔 Traditional partnerships tie up equity, control, roles, and obligations in
SBICs & Warrants
SBICs & Warrants: SBICs usually invest 10-25% of their funds as equity alongside their core product which is mezz debt,
The cost of capital placement agents
Placement agents help independent sponsors raise debt and/or equity, but at a cost. If the deal is cheap, it
When to hire a capital placement agent
The 3 situations where independent sponsors should consider engaging a capital placement agent to help with the fundraise: #1: First
Estimated deal expenses for independent sponsors
Deal expenses: • Legal: $100-300k • QoE: $20-70k • Misc.: <$100k • R&W insurance: ~1% (uncommon) • Closing fee: 1-2% of EV
Underwriting key people risk
Key people risk is especially difficult to underwrite if: (i) The founder controls the revenue (relationship-based, project-oriented, etc.). (ii) The
"Strategic generosity" to build trust
Examples of strategic generosity as a way to build long-term value & trust: • Yield on GP terms if capital partner
Bankers as Free Advisors
Industry-leading investment bankers can be your best advisor - for free. Ping them once you're under LOI. Bankers
The Big Beautiful Bill
The Big Beautiful Bill just passed. The two biggest and most beautiful takeaways for private equity: 1. Carried interest = No
ESOP is complex
From a friend who recently acquired an ESOP business: "Not sure I would recommend it." "It took
Pushed Out by Anchor Investor
How to minimize the risk of predatory capital providers stealing your deal: • Include non-circumvention provision in NDA. • Own the relationship
Specificity is key
I just read a deck where the sponsor suggested 4 avenues for growth: • Ride macro opportunities • Expand geographically • Add service
Investor Reporting as a Differentiator
Reporting is an area where independent sponsors can differentiate and excel, and it is the best way to build strong,
