• 128 10/08/2021

    Last week I was lucky enough to interview Mason Barrett on his decision to set out as an independent sponsor. For those of you unfamiliar with this career track, Independent Sponsors pursue entrepreneurship through acquisition; his intention is to identify a company and raise capital to acquire it. 

    Most independent sponsors have a background in private equity, investment banking, general management or consulting. In short, they are individuals with exposure to transactions and / or operations. As a career option, this model is attractive because it provides an accelerated path to becoming a significant equity participant with an executive and / or board-level role in an acquired business. In short, if executed correctly, it can massively accelerate your career.

    I have worked with many independent sponsors, and in a prior role I also funded independent sponsors that had identified attractive opportunities. In my experience, the most difficult part of the process is getting the first acquisition right, and that is precisely why I wanted to interview Mason. He has researched the role, decided how to fund his approach, developed an investment thesis and recruited a team of interns to help with sourcing and analysis, but he is still early in the process and has not yet closed on his first transaction. So you get a first-hand account of what it's like to be living the independent sponsor life.

    In this video interview we cover a variety of topics to help explain how future independent sponsors should approach the decision to buy their own company. A summary of topics with timestamps and helpful resources can be found below:

    Video Timestamps:

    1. [LINK] Detail on the Self Funded Approach
    2. [LINK] Detail on the Search Fund Approach
    3. [LINK] Search Backer Economics and Rights
    4. [LINK] Mental Preparation for the Search Process
    5. [LINK] Investment Thesis
    6. [LINK] Raising Equity
    7. [LINK] Sourcing Strategy for Independent Sponsors
    8. [LINK] Getting the Business Owner on the Phone
    9. [LINK] Talking About Valuation with the Business Owner
    10. [LINK] Motivation: The Enormous Success of Richard Reese

    Favorite Educational Resources for Independent Sponsors:

    1. [LINK] Book: HBR Guide to Buying a Small Business
    2. [LINK] Blog: Jim Stein Sharpe
    3. [LINK] Website: SearchFunder

    Related ASM Content:

    1. [LINK] Introduction to Independent Sponsors
    2. [LINK] Independent Sponsor Economics
    3. [LINK] Funded vs Fundless Private Equity

    Independent Sponsor Structure

    Independent Sponsor

 



  • 127 09/08/2021

    This interview is focused on getting a post-MBA or "partner track" job in private equity. My guest, Brett Lacher, has secured private equity jobs at the associate, senior associate and VP level. He also taught a course on the subject at Columbia University where he earned his MBA. 

    While the interview is focused on private equity, the advice Brett provides is useful in any competitive industry. In any process where the compensation offered is extremely attractive, you have to develop your own process to get in front of the individuals making hiring decisions. It may sound like a lot of work, but if you don't put in the time, it will limit your odds of success. 

    Fortunately, the process required to land a more senior private equity role is unique in that it closely resembles aspects of the job itself, in particular as it relates to sourcing investment opportunities and convincing sellers to work with you. It's likely that the network you build to land a job will be useful to you for years to come. Please click on the video below to learn more. 

    TIMESTAMPS

    03:05 Interview Objective
    03:40 Unique Parallel Between the Job and the Process
    05:30 Types of Private Equity
    06:20 The Right Fit (and Getting Comfortable Hearing "No")
    07:22 How the Skill Set Evolves from Analyst to Partner
    09:03 Partner Track Hire
    10:56 Building the Model is the Base Requirement
    13:10 Personal Preparation
    16:44 Develop a Network of Private Equity Firms
    18:25 Match Personal History with Fund Type
    20:52 Cold vs Warm Emails and Introductions
    24:15 How to Follow Up
    25:25 200 Conversations to Get the Job
    26:20 Email Tip: Google Snooze
    26:41 Persistence Pays Off ("I never respond to the first email.")
    27:50 The Private Equity Coffee Chat
    29:50 Start 6 Months to One Year in Advance
    30:28 One Pager
    32:33 Actual Interview Preparation
    33:51 The Value of Taking Notes
    34:40 Turn an Interview Into Dialogue
    35:18 Post-MBA Interview Format
    39:53 Develop Questions for Each Interview
    42:07 Interview Tips
    45:41 Never Know When You Are Being Evaluated
    46:30 Send a Thank You Note
    47:38 Follow Up (The Same Way PE Professionals Follow Up on Deals)
    51:53 Prime Your Mind
    52:26 Know When to Take a Break and Rest
    53:11 People Work VERY Hard to Get the Job
    54:38 Post Job Offer
    58:34 Leverage Offers to Get Offers
    1:00:51 What to Do Once You Have an Offer
    1:04:00 Dealing with Recruiters
    1:05:52 Q&A

 



  • 126 08/18/2021

    Interested in the CFO role? I recently interviewed two talented individuals on what it takes to join the c-suite. Amazingly, under their leadership, both of the companies these two CFOs worked for grew from double digit millions of revenue to well over $1 billion of revenue. One company grew organically and the other largely via acquisition, which provides for two interesting perspectives. 

    I have known them both for years, and I was delighted when they agreed to be interviewed. You can find their bios below (names have been changed to fictitious characters from the movie Wall Street).

    Bud Fox: Fox has held the CFO role at three distinct companies across various industries. He joined [Company A] in 2011, and saw it grow from a lower-middle-market company to north of $1 billion in revenue. 

    Gordon Gekko: Gekko’s experience includes a variety of leadership positions. Most recently he was the CFO of the fastest growing [industry] company in the country (grew from $50 million to $1.75 billion in 7 years). He is also an adjunct professor of finance.

    The PDF available for download details both interviews. The topics addressed are summarized below:

    The Base Requirement: The foundation, as described by Fox, is a thankless job that must be perfectly executed. The critical work, unnoticed by the rest of the organization, is the effort required to close the books, work with auditors, and produce information (examples, but not an exhaustive list). 

    Transition to CFO: Per Gekko, a CFO generally comes from one of two places: (1) the accounting side of the business, or (2) the finance / business strategy side of the business. To transition from the former requires a shift in perspective.

    Information: The CFO role is a bridge between finance and the rest of the company. In that vein it’s important to interact with all functions within the organization.

    Recruiting: A strong recruiting practice is necessary to have the confidence that the basic functions will continue seamlessly if the CFO is promoted from within.

    Technology: On this topic the response was simple and nearly identical on both calls; invest in technology early and often. “Don’t ever skimp on technology.” 

    Day One on the Job: What is your immediate priority day one on the job as the CFO of a new entity? Fox and Gekko had different reactions, which are outlined in the PDF document.

    Going Public: The notes conclude with some commentary from Gekko on the subject of when to go public. 

    Please click here to download the full PDF notes.

    How to Become a CFO
 




 



Models are:
 
A) really boring
B) pretty sweet
C) super important
D) somewhat easy
E) kind of hard
F) fun
G) all of the above

 

 


*Answers a, b, c, d, e, f and g are all correct.