Does having an Operational Background help?
July 24, 2024
by a searcher from HEC School of Management, Paris in Barcelona, España
Hi All,
Nice to meet you all! I am considering entering the SF world as I am ideally looking for a business to acquire, operate, and grow.
However, I see that most searchers come from a PE/Finance background - so if anyone has experience as a searcher from an operational background and how it impacts the whole process, pros and cons.
About me, I am a former Management Consultant, then Managing Director in a Multinational organization with 20+ years of experience setting up new businesses, so I have a wealth of experience managing functional teams, setting up processes, and operating in several markets, both B2B and B2C.
from Dartmouth College in Greenwich, CT, USA
Fabrice, For background - I started in finance/investing and then led 3 public companies. I currently bought/started a few small businesses and love it - including one www.build-ri.com that rates and reviews private equity firms on a few areas, eg, value creation capabilities. I just sold a company for 8x what I paid for it 3 years prior - it was 7 figures in revenue.
PE backgrounds help with finding deals, structuring and knowing what a company needs to look like to sell. It doesn't provide substantial operational experience, particularly sales and marketing experience which a lot of these companies need to grow/achieve a good exit multiple. A few other things to consider-
1) Having a combination of investing and operating is ideal, but not necessary. You'll probably need some deal/transaction help to find, evaluate and close a deal, so find a friend or investor to leverage in that area.
2)Being a former consultant sets you up with some good frameworks to strategize, communicate and implement change.
3) Working in a multi-national can be a plus and a minus. There are small businesses, where you will have to be very entrepreneurial, wear multiple hats and lead people from all backgrounds/levels of education. I've found that people from big companies can struggle in smaller organizations.
Finally and most importantly, don't think too much about have the right background. I have stepped into multiple positions with no background in the industry or role and it worked out most of the time for shareholders and me. Just focus on the fundamentals, especially what makes a company special. Allocate capital well. Don't squander $ on what doesn't contribute to growing the core offering. You probably won' be able to change that core value proposition much, so make sure it's differentiated/has a good history and then cut out anything else and really lean into it. Good luck.
from University of California, Berkeley in Sacramento, CA, USA
When I went into search, I had very limited deal experience, and was concerned about the deal process. Therefore, I joined an accelerator. After 2 years, I've gained a ton of deal experience and now I'm supporting Operations-background ETA searchers with their acquisitions as a Fractional CFO
I'm kinda like a search-partner for self-funded searchers with a heavy operations background.
Let me know if you want to connect and see how i can help. https://www.teeupnextgen.com/