All,
I thought I read a comment on here wherein the searcher turned down a PE firm because he did not want to lose equity control (though he got operational control). I cannot seem to find the post or comment, so maybe I dreamed it. In any event, I have no intent on putting the commenter on blast, but wanted to ask a genuine question - why would you not take a deal that eliminates potential personal exposures but still gives you operational control?
With that in mind, I wanted to post this genuine question to the community. What is your main driver for becoming a Searcher and ultimately buying a business? Do you desire Operational control, equity control (i.e. 51% or more), both, or other? I am genuinely interested.
Since it's my question, I will somewhat answer. As this is my first deal, and I plan on doing many more in my lifetime, especially of increased size, if a PE firm offered to write the full check, give me operational control, and give me some type of equity/carried interest, I would struggle to say no. I get the aspect of entrepreneurship that you have to be comfortable taking risks. However, if someone willing took personal guarantee risk off the table, gave me equity, and provided a possible outlet for more details, to me, I do not see the downside. I am fully confident in my skills and expertise, but to me, that sounds like an enticing deal.
Ps, if you are a PE firm reading this, give me a shout!
^Searchfunder member, if you could do your thing and blast this out. I would love to see the responses!
Why a search fund for you - Operations, Equity, or other?
by a searcher from Texas Christian University - Neeley School of Business
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
Short term gain - long-term loss...