Is it better to be industry agnostic or have an idea of an industry target when searching?
January 03, 2023
by a searcher from University of California, Riverside in Rancho Cucamonga, CA, USA
Is it better to be industry agnostic or have an idea of an industry target when searching? For example, My background is transportation; so my first target would naturally be in that sector. If anyone has acquired in this field, I would love to hear your story.
from Tufts University in San Francisco, CA, USA
Somebody with a long career in a certain industry may have a very specific thesis they want to pursue with their search, so naturally they will seek targets with a narrow set of characteristics related to that thesis. If you have good industry experience but don't yet have a defined investment thesis, a natural approach could be to start with your familiar industry, tap into its various subsectors, then expand up/down/across that industry's value stream as needed to keep the pipeline healthy and as you get more knowledgeable about other areas of the sector.
On the other hand, some searchers are successful with broader/more opportunistic approaches or by filtering on criteria other than industry (e.g. looking for certain business models while only considering end-market as a secondary factor). If, for example, you think your main value add will be bringing leadership and professional management to an undermanaged business, perhaps you can look at deals across a much broader set of end markets.
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA