Has anyone here known of an ex-PE associate or VP who has raised investor capital to lead a buyout of a middle-market company, with the intent of operating the company as CEO and leading it to a successful exit?
What are the skillsets required to do something like this? Obviously, you would have to be a good manager and pick the right company to buy -- what else? What would you need to have to inspire confidence in investors?
This seems like something that guys can pull off in their 30s post-MBA if they can find the right opportunity.
I've met with couple of recent MBA graduates / ex-PE professionals who head up their own search funds. A search fund is essentially an investment vehicle used to support an entrepreneur's quest to acquire an operating company. Here's the definition of a search fund:
"A search fund is a pool of capital raised to financially support the efforts of an entrepreneur, or a team of entrepreneurs, to locate a privately held company for acquisition. While the lifecycle of a search fund often includes up to four stages (fundraising, search and acquisition, operation, and exit), search funds are primarily used to finance the search stage (the identification, evaluation, and negotiation of acquisitions). Acquisitions made by search fund principals are financed using additional sources of capital. However, in the typical search fund, the bulk of this capital is raised from the investors that contributed initially."
I know of a few middle market private equity funds that invest in a number of search funds. It's sort of a venture capital model in that they weight a lower probability of success on their minimal investment in the search fund but hope that one or two of their investments is a grand slam.
How does interning at a search fund look for business school?
It'd probably be an interesting experience to talk about, but it really depends at what stage you're doing it? If this is between summers in undergrad or something, it's probably fine. Another appropriate time may be the summer before B-School or in between (if your eventual goal is to launch one).
bump
I've been trying to orechstrate my own buyouts for the last two years. And I'll tell you this, if you identify an attractive target and somehow get access to the firm's financials/management (mind you, this is all without capital) you can put together an investment memorandum(IM). That IM is useless unless you've got contacts with pockets big enough and stomach strong enough to invest in the company... and if you do, then you have to find one of those contacts that likes your buyout scheme... and not just likes it, but likes it enough to pour his own and likely his contacts' money into.
Then the deal itself actually starts. Think about all the deals in banking that fall apart. Well you just successfully obtained the opportunity to put a deal deal together that can fall through.
With all that said and having already been trying to put my own deals together for a small bit of time so far, I find it highly improbable... actually impossible, that anyone would invest that much money or any money in an endeavor which is not being managed and run by someone with several dozen years of experience in that particular space and an impressive track record demonstrating how capable they are and what they bring to the table.
So in sum, with you as CEO, no. With someone else as CEO, most likely not, but there's a sliver of hope.
Just my opinion, take it for what its worth.
Magni itaque error doloremque eaque doloremque et dolorem. Quia quia expedita nesciunt autem tempore ducimus laborum. Nesciunt suscipit modi doloremque delectus. Vel repudiandae eveniet aut atque inventore numquam. Quia voluptatem est quibusdam maxime et fugit sit. Sit iste doloribus qui aut vel fugiat voluptatibus.
Eum provident commodi nihil at maxime quae. Nemo eos sit quia sed beatae. Doloremque ducimus optio reprehenderit rerum. Sed quisquam totam placeat voluptatum amet error atque. Voluptates animi atque provident voluptatibus excepturi enim.
Voluptatem dicta dolor repellendus molestiae est porro ut. Et rerum at numquam corrupti voluptate. Aliquid necessitatibus tempora temporibus rem omnis sed et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...