Seeking advice

February 19, 2025

by a searcher from Cornell University in Schaumburg, IL, USA

I suppose I could use the search function but I'd like to make this more personalized. I met an older gentleman who is thinking about retiring in the relative near future. His "company" is him where he is involved in the acquisition and remarketing of used industrial machinery. He has lots of institutional knowledge and a built up network from over the years. I am very interested in getting into this type of business.

However, buying his "company" (i.e. his job), does not seem feasible or overly wise. My background is finance and I have built a software/mobile app to value damaged equipment for commercial insurance property claims so I have some tangential experience. My question is how can I somehow partner with this guy where he gets what he wants, an exit from his lifestyle company, while I get what I want, an entre into this niche, while trying to bring him some value. Any suggestions on a type of acq. structure or partnership agreement would be welcomed. Thanks.

Reply by an investor
from University of Illinois at Urbana in Chicago, IL, USA

^redacted‌, hard to tell for sure based on above, but one idea is to simply get to know him - maybe ask him to hire you to help him think through next steps on a consulting basis for 3 mos. You can both get to know one another, you can get to know his business, etc. You can be up front and tell him you are interested in potentially buying / helping him sell his business, and this is one way to advance further without any long term commitment either way. You would know a lot more at the end of###-###-#### weeks, and can start to think through next steps. If he is the business, then a mostly seller financed deal may be his only way out unless he sells to a strategic who doesn't care. Anyone else will see nothing but risk. And if you are in the market tangentially, you may be his best bet. Just be careful, many of us have a long long history of finding businesses we like, and then basically providing free consulting over many many hours of meetings / getting to know one another which ends up in nothing. That's why to me the idea of a consulting period at least forces him to write a check to learn more about you and how to potentially exit...

Reply by a searcher
from Cornell University in Schaumburg, IL, USA

Update. Well I Frankensteined a letter to the owner (thanks everyone). He didn't seem overly keen on me going to work for him, gradually handing over the reins and then getting some sort of payment stream over the next few years (how ever we would structure that). He seemed to really want some sort of kiss upfront where he gets some cash up front and then some type structure for the rest going forward. He contends there is a lot of value in his knowledge of what equipment to buy or avoid, the scoundrels to avoid in this business, all the riggers, shippers and transportation networks he has built up and importantly who the ready buyers are so you don't sit on a piece of equipment for years. He has built this knowledge over decades. I don't disagree with any of that line of thinking, but I can see him being obstinate about some upfront money (like most of these sellers who seem to have stars in their eyes). Anyway, I don't want to brain drain people here, but any additional thoughts would be welcomed. If you know what your doing in this space it can be very lucrative.

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