Post-Closing Operations

searcher profile

February 16, 2024

by a searcher from University of Minnesota - Twin Cities Campus in Marysville, WA, USA

Hi all! When you buy a business, are you anticipating being the primary operator of the business? If not, do you expect the business to come with full operational staff, or do you look for an external operator to hire on (either as a W2 staff member or by giving them equity)? If it's the latter, where do you find those people?

Sorry for the Russian nesting doll-like series of questions! I appreciate any advice you can share!

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commentor profile
Reply by a searcher
from Western Washington University in Nashville, TN, USA
Hey ^redacted‌, I'm looking to buy companies with some existing management in place, but this isn't typical for a traditional searcher.

I've found the following:
- Traditional Search Fund: Buy & operate it as the CEO/President
- Self Funded Searcher: Buy & most likely operate it as CEO/President
- Independent Sponsor: Buy & have someone else operate it

Where to find someone to operate your company:
- Existing team (e.g., seller's #2 person, Dir of Ops, GM, COO)
- External hire (e.g., headhunter, executive recruiter, your network)

Hope this gives some food for thought!
commentor profile
Reply by a professional
from University of California, Berkeley in Tampa, FL, USA
Initially you should be the primary operator of the business so you can evaluate the current staff. You need to figure out what is the state of the business and what it needs prior to bringing on an external operator. The decision to bring on an external operator and whether they get salary alone, or salary plus equity, depends on many factors.
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