Anyone Want to do a "Search"?
It's been a long time since I've been on WSO (even forgot my original user name), but I recall this site being quite resourceful.
With that in mind, anyone on here interested in doing a search fund with me?
After several years in business/commerical/corporate banking, I recently accepted a buyout offer from my most recent employer. Have a few months to figure out next steps. Can always get another job, but wanted to explore other possibilities.
Based in the Midwest and prefer to stay, but would be open to opportunities across the U.S. Well versed in SBA financing for small to mid sized companies.
Our target business would need to be cash flow positive on Day 1, so no start-ups or turnarounds for now. Feel free to try and change my mind. I'm thinking revenue up to $5MM, with free cash flow of ~$1-1.5MM before debt service. Wide open about industry, as long as outlook is positive/stable and the business isn't too technical, regulated, or concentrated.
Don't believe in doing business with family or friends and would rather partner with someone who has business acumen, is business minded, and motivated.
Both of us will have skin in the game (precise details TBD). I don't necessarily mind getting my hands dirty with operations. My profile is single male, 27, no MBA (and doubt I'll be going for one).
Comment below or PM me with any thoughts, or if you have experience doing a search, or if you can play a role in the search process.
Do you plan to go the traditional search fund route or do you want to self-fund?
I'll "self fund" the search itself, but may pitch to investors once a potential target is identified.
Self-funding as much as possible is the path of least resistance, faster, and more efficient IMO.
good call
PM Me
Won't let me PM you, or anyone else for that matter. Maybe because I'm a new user? No clue. Shoot me a PM, and if that doesn't work, we can figure something out.
BoBandy, WSO won't allow me to send outgoing messages. Probably because I'm a new user or something. But thanks for reaching out. Let's see...
Depends on if/how many other investors we have. I'm fine with 50/50 as long as there's robust protocol on how to settle any differences that may arise. At a minimum, both of us should own at least 25% to ensure there's enough upside for each.
The SBA requires all 20%+ owners to personally guarantee a loan. Underwriting depends on lender, but is generally flexible. Credit score of 640+ and we should be good.
You won't have to go the SBA route with a large enough company (~$2mm+ EBITDA). I'd be interested in investing if you guys ever sign something up.
Interested in hearing more on how so, although wouldn't anything over $2-3mm invite actual PE competition?
Thanks. I don't know if I've ever seen two people acquire a company together via a search model but I don't know why that is either. How would roles get assigned, and don't you think having two finance dopes behind the wheel would be redundant? It would be more ideal if you had a finance guy + marketing wizard or finance guy + operator (really any two partners that complement each other vs. overlap in skillset and mindset) go in together.
Agreed on a robust protocol for disputes being ideal but also a little impractical, no? How do you write in every scenario?
One other question is if you have the path to lock down a deal yourself, why introduce a likely unnecessary partner that you may have disputes and will certainly share the spoils with? Unless the two partners have complementary skills like mentioned above, the only other reason would be the "loneliness" factor that goes into a solo venture (which I think is underestimated by many).
I don't mean to agitate or anything - only brainstorming and throwing my thoughts out because this is of potential interest and wanting to better understand.
Our professional backgrounds may be similar, but we both don't have to focus on the same things. Plenty to do as business owners. We can also rotate responsibilities. I've seen big companies where the CFO came from an HR background and CEO who came from an IT background.
In my former job, I provided loans to private companies including to search fund buyers (partly why I'm interested in it myself now). I can tell you its TOUGH to run a business day-to-day. Always a fire drill going on, but at least you're working for yourself.
I don't need a partner, but am obviously open to it. Can aim for a bigger target that way. Would be nice to have a trustworthy/reliable partner so both can take time off peacefully, without having to worry about putting out fires while away. Two heads are better than one for idea generation, problem solving, and a "gut check". Partnerships can also be a good source of future liquidity/exit.
With that being said, for the above to be true, the partners would need to be compatible (no homo, haha). That takes time and more than a few convos on WSO.
Thanks to everyone for the PMs-- working on responding to all of them one by one!
I would’ve been concerned if you were married “phew”
We need more posts like this!!!
You can get nonrecourse on $1m+ btw. No need for pg. :)
How?
Last time we shopped for a smaller deal we reached out to a ton of small credit unions and ended up getting the best deal by far from a credit union. Worked out to ~12% - 13% IIRC. All other lenders came in much much higher. Obviously SBA will be cheaper but the PG element is there.
PMed.
uniqueusernamehere, thanks for the offer, will keep you mind if anything materializes.
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