Local rich guy "looking to buy a couple companies," how could I offer to assist him
I had a chance to talk very briefly with a friend of a friend of a friend. I'd say he's in his 40s now and was the owner of what sounds like a decent-sized business that he initially inherited and finally sold for a nondisclosed price last year. Since then he's played with real estate on the side but he mentioned that he's also looking to buy a couple companies. He added that maybe he could find me a job at one of them. I got his contact info and I'm gonna ask him to meet for coffee or something next week.
When he says "a couple companies," I doubt he means anything humongous, but because I was a finance major (just graduated) and am interested in the dealmaking/transactional side of business, does it seem like there'd be any way I could work for him in the scouting and purchasing process? I imagine doing that could be interesting experience, considering the fact that I could never get hired at an investment bank in this climate.
If this is a realistic idea, then how would I propose helping him out? What specifically, e.g. due diligence? Tinkering with a valuation model? Forensic accounting?
I would only prospect companies for him. Please don't try to broker the deal yourself.
Find companies and meet with a boutique investment bank that focuses on the company you found. Have them do all the transactional work, and go with the guy to meetings. Try to double check the boutiques work for major errors/lies in valuation, costs, etc.
Just my 2 cents...
How would he even prospect for deals? He has no network, no exposure to anyone of importance, and wouldnt even know where to look. The OP pretty much adds zero value.
With that said, thats not to say that it wouldnt be an interesting opportunity for you to work with him (i.e. preparing powerpoints, memos, etc.) but without a formal skill set and no deal experience you may just get in the way.
What size and type of companies are we talking? Obviously the smaller the better/easier.
junkbondswap, my thoughts exactly. If you have no experience, how will you even begin to prospect for deals? Then when you find a target, how are you going to get information about the company to see if it's actually worth the guy's time? Are you going to call them up and ask for a CIM?
You're not going to be of much use, though maybe the guy will be generous and let you sit in as his "analyst."
Thanks for the replies, guys. JBS, I'll have to get back to you on what he's in the market for after we talk. I would've asked him at the time, but didn't want to pry into details right away. Before I got together with him, though, I wanted ideally to have a somewhat concrete idea of what I could bring to the table in a deal scenario. He seems to like me and he seems open-minded so I wanted give it a try.
What I can tell you is that the company he used to own was in the leisure industry.
As far as network and knowing where to look, you're right ... the guy is very established in my city/area. Whereas I might as well be in high school by comparison ...
dude hook me up with this guy. I'll get it done. I'll give you a finders fee once we finish the deal.
Help him focus on finding a fund to invest. Buying Co's isn't for the tame.
I don't think he's buying company's because he wants to get a return higher than the market average, I think he's doing so because he's bored and wants something to do. Reading a monthly letter from a fund manager does not meet that description.
You don't have professional liability insurance. Do NOT provide any kind of advice/service.
If you are just curious, then tag along with him when he meets with a small business broker.
You guys are idiots. Don't do anything.
The guy basically threw an idea out there and you've gobbled it up...
If he were really interested, he would have had a few CIMs in front of him... It's a thought he had, shared to make himself seem important and I'm sure in the near term that's all it'll be, a thought....
I share this view. Anyone who says "Yeah, I'm looking to buy a few companies" is full of donkey shit.
There's a reason people don't start up investment banks in their mother's basements.
Why? What do you want them to say? I met with him yesterday and he is willing to consider all kinds of things. For the past year he's been making mezz loans and stuff like that and asking around if anybody wants to sell. He even told me to let him know if I hear of anything (How would I hear of anything?)
First of all, thanks again for all the responses. JBS and Veritas, thanks to you guys especially. I used your suggestions, and to my surprise he responded rather open-mindedly. He said he'd be happy for me to sit in on a meeting with a business broker. Afterward I followed up by shooting him an email in which I added that I could help him out with memos, powerpoints, etc., and after reading that he called me today and wants me to swing by his house this weekend for an hour and a half or so to show him some things I could do on the computer. JBS, any tips on what to brush up on?
Since September he has been talking to the soon-to-be-retired owner of a small company in the area, and I think he said something about the owner needing a little less than $1m. And this guy would only need 10 people to run it. So nothing huge. They make an interesting product (or have it made in China I should say) that could probably sell much better with a more energetic marketing effort. He is tired of talking and wants to make a decision, so they will draw up a document in the next few days that will allow them to either scrap it all or move forward.
He considers himself a salesman, a presenter. When he and his brother were partners, his brother handled the accounting and numbers and other minutiae. He does not want to get bogged down in the operational details of managing a business and says it sounds like we could be a good match since I understand accounting and am good at math.
He didn't spill a bunch of numbers on the table, so I don't know exactly what he's looking to spend. I should've just asked. For example he mentioned that he would definitely buy the big Harley Davidson dealership in ___ if it were for sale, and I imagine those are worth a lot. But again nothing huge. If he does buy the manufacturing company I'll have a job there, and I would probably have a ton of responsibility. Of course, deals fall through, who knows.
Do not pick up the soap and do not bend over...
Hahaha
I know, a friend of mine said the same thing...
He met with the owner to go over some documents this week, and he's waiting for one more piece of information from him before he gets me to go over some numbers for him, paying me hourly. I still don't know much more than that, I will keep you guys updated, though.
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