Search Fund Tear Sheet: Feedback & Examples
September 15, 2020
by a searcher from Miami University of Ohio in Chicago, IL, USA
My partner and I are in the early stages of launching our search and working to create a two page tear sheet. The sheet would detail our background, approach, target acquisition, and operating approach. We feel this would provide owners, intermediaries, bankers, and service providers with an understanding of who we are and what we're looking to do.
We're looking to get feedback from the community on a few questions -
1.) Do you feel a tear sheet as described would be beneficial when working with owners, intermediaries, bankers, and service providers?
2.) If so, what are the key pieces to include? (i.e. who we are, our approach, acquisition criteria, approach to operations)
3.) Finally, do you have or know of tear sheet examples?
from University of Pennsylvania in Indianapolis, IN, USA
What I mean is that if you have a good operating experience in the same industry, dedicated capital/financing to close a deal of whatever size you're evaluating, and/or previously completed deals to point to then it could be beneficial to include.
If, on the other hand, the background section shows you have zero operating experience and highlights only an MBA with a $100K price tag then it's not going to be helpful in getting an intermediary or business owner to take you seriously as a buyer, which can be especially true of traditionally blue collar industries (there are, of course, exceptions).
Similarly, if the seller (particularly a founder/owner/operator) thinks your operating approach is awful, then it's unlikely they will see you as a good steward of what they've built moving forward.
My point is that you should choose carefully what you share and do so situationally/as needed.
Also, my perspective comes from a place of experience where I have watched deals die because of the above dynamics. I, too, have the not-so-inexpensive MBA and I'm also a doctoral candidate (thesis: causes of M&A failure), so my response comes from a constructive place rather than one that's critical. Either way, good luck!
from Case Western Reserve University in Cleveland, OH, USA