A balance sheet will tell you whether a company works. It will never tell you whether the owner is worth backing. That is where we start, and it is why we back so few.
We look at many companies and back very few. Four things have to be true — and the first is not about the company at all.
Still running it, still deciding. We work with owners, not committees.
Profitable, and profitable for years. Nothing we do is a turnaround.
Independent. Not a franchise, and not a division of something larger.
The market you sit in is considerably larger than the share you hold.
Four steps, from the first conversation to a decision. You will know where you stand at the end of each one.
Grow it, or sell it one day. What you want from the business decides everything that follows, so we ask until we understand it.
A partner sits down with you — where the business is, where you want it to go, and what is actually in the way.
Either we ask you to a second meeting, or we write to you. You will not be chasing us.
How it is structured is decided in the room.
Most of the companies we look at are not ones we can back, and we say so plainly rather than leaving it hanging.
Either way you keep what we found. A partner reads the company the way a buyer would, and that read is yours whether or not we ever do business.
Three partners, and an operating team that goes in with them. A partner stays with every company we back, and that is what limits the number.
Leads research and evaluation. Responsible for what the firm knows about a company before a partner sits down with its owner.
Eight years in finance. Leads the financial assessment — margin, earnings quality, customer concentration, and how much of the business rests on the owner.
First contact with every owner the firm approaches.
Two owner-led businesses. Neither was a turnaround.
Returned on $4,000 deployed for an owner-led business, and roughly 30× held across the eight months that followed.
Added on a company doing $1M a year — enough to cover the off season for the first time in its history.
That is the whole question. A line or two will do.
There is nothing further you need to do. We come back to you either way.