Seeking Complexity
"We seek complexity. Otherwise it's too competitive." - Example of differentiated strategy with an independent sponsor
M&A
243 posts
Independent Sponsor Deal vs. US Presidency
If you've ever wondered about the similarities between an independent sponsor deal and the US Presidency.
All-Time High
If the most recent financial results of a target show all-time highs, it could be attributed to temporary factors or
$300k Break Fee
"I negotiated a $300K break fee if they walk away before it closes." Break fees aren't
Day 1 Post-Closing
Day 1 after closing: • Spend time with your new team members (be visible, present, approachable). • Do not announce any operational
Announce on Monday
It's better to annonce a closing on a Monday than a Friday. Employees always worry how changes affect
Skin In The Game
Optics of skin in the game for independent sponsors: Good: rolls closing fee plus invests cash Bad: rolls closing fee
5 Keys for Independent Sponsors
5 things I love to see in independent sponsors as an investor at Minds Capital: 1. Niche experience (expertise, knowledge,
Fundraise Anatomy
This chart shows what a PE fundraise actually looks like. Minds Capital - which invests equity in acquisitions led by
When Equity Is Oversubscribed
My $0.02 on what to do if your equity is over-subscribed: 1. Take the capital! More capital = Good. More
Best Practices for Base Case PF
4 best practices of a credible base case pro forma: 1. Projected revenue growth = Historical growth 2. Flat profit margin
R&W Insurance
The seller’s attorney, who had no M&A expertise, wanted to ambiguize* the Reps & Warranties. Illustrative example:
Negative NWC
Many searchers overlook the value of negative working capital. Everyone is hyper-aware of capex-intensity, but net working capital (NWC) is
Thesis-driven vs. Generalist
Thesis-driven search: (1) Develop a vision (2) Find an acquisition target that fits the vision Generalist search: (1) Find an
5.8x MOIC
5.8x MOIC. In 2019 I invested in an all-equity 100% acquisition of a moderately-growing target. The entry multiple was
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 in
"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 until
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 niche
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 had
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
