How would you approach pitching a sponsor-backed deal?
Hi WSO community -
I crave to live at the intersection of investing and operating. By circumstance, the
co-manufacturer / beverage partner I worked with to develop an alcoholic ready-to-drink is sponsor-backed and nearing the 5-year investment mark. The business would require +/- $150M in equity financing.
I do not have the financial means to pursue the opportunity as an independent sponsor, but strongly believe that my aptitudes, experiences, passions and goals align well for me to help underwrite, potentially invest in and support the execution of the value-creation plan on the opportunity.
My edge and value-add come from experience working directly with this business for ~8 months, ability to plug and play directly into a fund interested in underwriting the business and bringing interest many months in advance of a potential, full-scope sell-side.
I plan to create a short overview of the Company and present it to 1) current, well-capitalized searchers (if they exist at this check size), 2) operationally focused and entrepreneurial private equity firms and 3) emerging PE managers looking to make a large investment
Below is the opportunity, a request for your thoughts, advice and a small, un-curated look into my view on investing / operating
The Opportunity and Business
- Business / consumer contract services beverage brand partner that helps to more efficiently and effectively source, develop, gain approval for and produce beverages
- The Company is based in the Midwest, has a 20+ year operating history and currently operates under a parent brand with 2 complimentary, semi-connected businesses
- Sponsor-backed since 2021 and raised +$150M in debt financing to date and is nearing the end of what I believe to be the sponsor's typical 5-year hold
- Happy to share a one-pager for more detail, but wanted to keep this part light
Questions / Ask for You
- What would you do in my position? If you were an investor, would you take this proposition seriously? What do you need to believe?
- Is my thought to present this to the two (mentioned above) styles of PE firms conducive to getting to my desired outcome? My whole idea is to stake my career on the deal by joining the fund, underwriting the opportunity and working at the Company to see the value creation plan through
- Founders or current searchers who have a perspective on this topic and would like to discuss this opportunity in any capacity, more on my worldview below
My Perspective on Operating / Investing
- Exceptional businesses are rare not complicated: they build around a why and exhibit dynamism, resilience, urgency, fixation around solutions to meaningful problems and relentlessly empower managers
- Diversification is antithetical to the obsessive focus needed to build and invest in outlier businesses. I will put my eggs in one basket and make that basket the cornerstone of my energy, effort, mental bandwidth and intellectual capital
- One, sometimes two things truly move the needle and they often are the direct inputs to a business' right to win. Everything else is auxiliary and worth selective mindshare
- You can refine the good to become exceptional. Diamonds are nothing more than pieces of coal that made it through the heat and pressure
- The most important thing is pursuing the journey of the process with people who give you energy. Succeeding is a process and not agnostic of failure or setback; the moments of slowing down and re-routing may help you to miss the iceberg in your path
- If you are pursuing boundless progress; no description, background or identifier matters. Optimists propel and contrarians add facets. You need both in different people to make it far
- Music and the arts are deeply inscribed in my soul. Like businesses, songs with an ineffable story, brilliant creators and captive audiences serve a purpose. They engage, brighten and add to our world. I hope to create and propel businesses that do the same
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