Chimps - does anyone have any success stories on starting their own firm. Problems they incurred from raising capital to current day problems?
Also, any stories online that people shared or reported on?
Would like to see any outlines here, hear them all the time on podcasts but not on the forum.
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I left a T1 and started a boutique Advisory/PE firm. Raised GP capital, staffed up, and rolled out a few small PERE funds.It was exhilarating at first, but some of the partners I brought on were used to big bonuses and lavish expense accounts. It caused a lot of problems. We ended up winding down, which was expensive and painful.I learned a lot, aged a lot, regretted a lot, loved a lot of it, but largely wished I had done things differently.
Very interesting. What would you have done differently if you could do it again?
I had a good thesis and solid business plan, war chest, network, deal-flow, and capital pipeline.
The biggest lesson I learned is someone needs to be in charge and have ultimate authority. We tried to create round table like equality and that cultivated chaos, confusion, and conflict. I don't think that running into COVID soon after launching the firm helped matters either.
Partners, if you choose to bring them on, can make or break you. In this case they broke us.
I would ensure compensation agreements for principals were results oriented and have very clear penalties for weak performance.
Also, your business plan should be the blueprint, you will always pivot and flex, but everyone should buy into the early book.
Next, I would staff up in a measured way and make sure that each new addition to headcount was directly accretive to the goal.
Finally, I would never launch anything new or different, before our core business objectives and goals were performing or established. There is always the next great opportunity, but focusing and building a stable, profitable, durable business should supersede short term opportunities.
Nice info, would love it if you made an AMA thread. Obviously if you had the time. Would be really good for those of us to learn from your experience.
An AMA is a great idea. I would be open to it.
Thanks for sharing. I’m currently at an owner/operator spun off by ex-PE guys. I think your last point is spot on from my experience. We keep chasing deals and wagging the tail to new equity. But operations are shit and we have to tell half-truths/hide results in all of our pitches.
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