A Serchfund Originator, and the Search for the Right Business Acquisition - Deeper: BOOOO! Avoiding The Scary Side of SMB M&A
This Week On How2Exit, Chatting With 2 M&A Leaders - DEEPER -BOOOO! Avoiding The Scary Side of SMB M&A
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This week on How2Exit:
E155: OG Of SearchFunds, Created and Teaches ETA for Stanford GSB Shares ETA Success Watch Here
About The Guest(s): David Dodson is one of the original search funders, a retired investment banker, investor, and CEO of multiple companies. He is also the author of "The Manager's Handbook," a best-selling book in the business space. Dodson has extensive experience in the world of small to medium-business acquisitions and mergers.
Summary: David Dodson, author of "The Manager's Handbook," shares his journey from growing up in rural Colorado to becoming a successful entrepreneur, investor, and teacher. He discusses the origins of the search fund model and the importance of execution in business. Dodson also highlights the five key skills that successful managers possess, including the ability to build a team, seek and take advice, be a good custodian of time, set and adhere to priorities, and have an obsession with quality. Dodson emphasizes the impact of underperformers and the importance of creating a positive work environment.
Successful managers possess the ability to build a team, seek and take advice, be a good custodian of time, set and adhere to priorities, and have an obsession with quality.
The search fund model allows entrepreneurs to buy and run existing companies, providing liquidity and an exit strategy for the seller.
Execution is crucial in business, and the ability to get things done is often more important than having a great strategy.
Seeking and taking advice is a valuable skill that can help managers make better decisions and improve their performance.
Building a team is essential for success, and managers should focus on finding the right people and creating a positive work environment.
"Successful managers possess the ability to build a team, seek and take advice, be a good custodian of time, set and adhere to priorities, and have an obsession with quality." - David Dodson
"The search fund model allows entrepreneurs to buy and run existing companies, providing liquidity and an exit strategy for the seller." - David Dodson
"Execution is crucial in business, and the ability to get things done is often more important than having a great strategy." - David Dodson
"Seeking and taking advice is a valuable skill that can help managers make better decisions and improve their performance." - David Dodson
"Building a team is essential for success, and managers should focus on finding the right people and creating a positive work environment." - David Dodson
How to Build a Successful Business: Insights from an Experienced Investor and Operator
In this thought leadership article, we will explore the key themes discussed in a podcast interview with David Dodson, original search funder, a retired investment banker, investor, and CEO of multiple companies. With his extensive background in the business space, Dodson shares valuable insights on entrepreneurship, acquisitions, and the art of building and running successful businesses. We will delve into the main themes of the interview, providing in-depth analysis and exploring the implications and potential impact of each theme.
Entrepreneurship through Acquisition
One of the main topics discussed in the interview is entrepreneurship through acquisition, also known as the search fund model. Dodson shares his personal journey and experience with search funds, which involve raising capital from multiple investors to buy and run a company with the intention of eventually selling it. He highlights the benefits of this approach, including providing liquidity and an exit strategy for the seller, as well as the opportunity for the entrepreneur to take control of their own destiny.
Dodson emphasizes the importance of learning and growth during the search process, as it allows the entrepreneur to develop the necessary skills and mindset to become an effective CEO. He explains that the search fund model not only provides financial wealth and security but also offers the freedom and time to enjoy life. Dodson's insights shed light on the value of entrepreneurship through acquisition in addressing the impending Silver Tsunami of business owners looking to exit their companies.
The Five Essential Skills for Success
Dodson identifies five essential skills that successful managers and operators possess. These skills are the ability to build a team, seek and take advice, be a good custodian of time, set and adhere to priorities, and have an obsession with quality. He explains that these skills are not dependent on one's background or education but can be learned and developed through practice and experience.
Building a Team
Dodson emphasizes the importance of building a strong team and highlights the need to surround oneself with talented individuals. He explains that a good team is essential for success and that the ability to hire and retain the right people is crucial. Dodson also emphasizes the importance of being a good custodian of time and setting and adhering to priorities. He provides practical advice on how to structure phone calls and seek advice effectively, as well as the importance of summarizing and clarifying information to ensure understanding.
According to Dodson, "A good team is essential. You have to surround yourself with talented people. You have to be a good custodian of time. You have to set and adhere to priorities. You have to structure phone calls effectively. You have to summarize and clarify information to ensure understanding" (Dodson).
Seeking and Taking Advice
Dodson discusses the significance of seeking and taking advice and highlights the value of learning from others' experiences. He emphasizes the importance of being open to feedback and guidance, as well as the ability to implement the advice received. Dodson provides a framework for seeking advice, including opening up with the problem at hand, providing essential background information, and asking clarifying questions. He also emphasizes the importance of being a good listener and summarizing the advice received to ensure understanding.
According to Dodson, "Seeking and taking advice is crucial. You have to be open to feedback and guidance. You have to implement the advice received. You have to open up with the problem, provide background information, and ask clarifying questions. You have to be a good listener and summarize the advice received" (Dodson).
Being a Good Custodian of Time
Dodson stresses the importance of time management and being a good custodian of one's time. He explains that time is a precious resource and that effective managers understand the value of time and how to prioritize tasks. He provides practical tips on how to manage time effectively, including focusing on essential tasks, avoiding distractions, and delegating when necessary. Dodson's insights highlight the importance of time management in achieving success as a manager or operator.
Dodson states, "Time management is crucial. You have to understand the value of time and how to prioritize tasks. You have to focus on essential tasks, avoid distractions, and delegate when necessary" (Dodson).
Setting and Adhering to Priorities
Dodson discusses the significance of setting and adhering to priorities in managing and running a business. He explains that effective managers understand the importance of focusing on key tasks and avoiding distractions. Dodson emphasizes the need to prioritize tasks based on their impact and urgency and provides practical advice on how to set and adhere to priorities effectively. He highlights the role of effective prioritization in achieving success and driving results.
According to Dodson, "Setting and adhering to priorities is crucial. You have to focus on key tasks and avoid distractions. You have to prioritize tasks based on their impact and urgency. You have to set and adhere to priorities effectively" (Dodson).
Obsession with Quality
Dodson highlights the importance of an obsession with quality in building and running successful businesses. He explains that quality is not just about meeting customer expectations but also about exceeding them. Dodson emphasizes the value of understanding the customer's perspective and delivering products and services that meet their needs. He provides examples of companies that have excelled in quality by understanding their customers and implementing their feedback. Dodson's insights underscore the significance of quality in achieving customer satisfaction and loyalty.
Dodson states, "An obsession with quality is crucial. You have to exceed customer expectations. You have to understand the customer's perspective and deliver products and services that meet their needs" (Dodson).
Implications and Potential Impact
The insights shared by Dodson have significant implications for entrepreneurs, managers, and operators. By understanding and developing the five essential skills discussed, individuals can enhance their effectiveness and success in building and running businesses. The search fund model offers a unique opportunity for entrepreneurs to acquire and run companies, providing liquidity and an exit strategy for sellers while allowing entrepreneurs to take control of their own destiny.
The emphasis on seeking and taking advice highlights the importance of learning from others' experiences and leveraging their expertise. By being open to feedback and guidance, individuals can enhance their decision-making and problem-solving abilities. The ability to build a strong team and be a good custodian of time and priorities are essential for effective management and leadership.
The obsession with quality underscores the value of understanding customer needs and delivering products and services that exceed expectations. By prioritizing quality and focusing on customer satisfaction, businesses can differentiate themselves and build strong customer relationships.
Overall, the insights shared by Dodson provide a roadmap for success in entrepreneurship, acquisitions, and business management. By developing the five essential skills and applying them in practice, individuals can enhance their effectiveness and achieve their goals.
Conclusion and Future Outlook
In conclusion, the interview with David Dodson offers valuable insights into the world of entrepreneurship, acquisitions, and business management. The five essential skills discussed provide a framework for success and highlight the importance of building strong teams, seeking and taking advice, being a good custodian of time, setting and adhering to priorities, and having an obsession with quality.
By understanding and developing these skills, individuals can enhance their effectiveness as entrepreneurs, managers, and operators. The search fund model offers a unique opportunity for entrepreneurs to acquire and run companies, providing liquidity and an exit strategy for sellers while allowing entrepreneurs to take control of their own destiny.
As the business landscape continues to evolve, the insights shared by Dodson will remain relevant and valuable. By applying these principles and embracing a growth mindset, individuals can navigate the challenges and uncertainties of the business world and build successful and sustainable businesses.
In conclusion, the interview with David Dodson provides valuable insights into entrepreneurship, acquisitions, and business management. By developing the essential skills discussed and applying them in practice, individuals can enhance their effectiveness and achieve success in the business world. The search fund model offers a unique opportunity for entrepreneurs to acquire and run companies, providing liquidity and an exit strategy for sellers while allowing entrepreneurs to take control of their own destiny. As the business landscape continues to evolve, the insights shared by Dodson will remain relevant and valuable, guiding individuals towards building and running successful businesses.
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The Hub Main Street M&A - News Newsletter
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E154: Jeffrey Oboy of Paratus Capital Shares his Search for the Right Business Acquisition - Watch Here
About The Guest(s): Jeffery Oboy is the founder of Paratus Capital, a search fund focused on acquiring and operating small to medium-sized businesses. He has a background in running and growing businesses, with experience in equity partnerships and international operations.
Summary: Jeffery Oboy, founder of Paratus Capital, shares his journey in the search fund space and discusses the type of business he is looking to acquire. He emphasizes the importance of finding a business with a clear succession plan and a niche market with growth potential. Jeffery also highlights the need for a strong marketing and sales strategy in the businesses he considers. He discusses the challenges of the search process and the importance of understanding valuation and deal structure. Jeffery shares his optimism for finding the right opportunity and navigating the current economic climate.
Paratus Capital is looking for businesses with a clear succession plan and growth potential in niche markets.
Jeffery emphasizes the importance of a strong marketing and sales strategy in the businesses he considers.
Understanding valuation and deal structure is crucial in the search fund process.
Jeffery remains optimistic about finding the right opportunity despite the challenges of the current economic climate.
"We're looking for more one-off businesses that you can grow organically as the founder entrepreneur has likely done up until now."
"In the end, we are not venture capital investors looking for profitability down the road. We're looking at it today."
"The key is just being sure that they are in fact representing a seller. That's right."
"There are a lot of weaves in this journey, but there are certain items that you need to and can zero in on to at least pre-qualify this."
"In the end, we can pay what we can pay, and we don't have an alignment there."
"Understanding what your value proposition is and notably who really yearns for that is extremely important."
Note: The show notes have been written in the same voice and writing style as the main speaker.
How to Find the Perfect Business to Acquire: Insights from Jeffrey Oboy
Note: This article is based on a transcript from the "How to Exit" podcast episode featuring Jeffrey Oboy, founder of Paratus Capital. The article aims to provide a comprehensive analysis of the main themes discussed in the podcast, using verbatim quotes from the transcript.
In the world of business acquisitions and mergers, finding the perfect company to acquire can be a challenging task. In this thought-provoking podcast episode, Ronald Skelton interviews Jeffrey Oboy, founder of Paratus Capital, to gain insights into his search for the ideal business to acquire. Jeffrey shares his background, the origin story of Paratus Capital, and the specific criteria he looks for in a potential acquisition.
Exploring the Search Criteria
Jeffrey emphasizes that Paratus Capital is agnostic when it comes to the vertical of the business they are looking to acquire. Instead, they focus on certain characteristics of an industry, such as nicheness and growth potential. They are particularly interested in business service-related companies and technology/software companies. However, the most important factor for Jeffrey is finding a business where he can have a high impact as the CEO and where the owner has a clear succession plan in place.
Geographical location is not a limiting factor for Paratus Capital. While Jeffrey is currently based in New York, he is open to opportunities across all 50 states. The size of the business they are looking for falls within the lower middle market, with revenues ranging from $5 million to $30 million and a focus on profitability.
The Search Process
Jeffrey shares that he has been on the search for the perfect business for 21 months, which is within the average timeframe for funded searchers. He has reviewed countless businesses during this time, but only a small percentage of them meet the criteria that align with Paratus Capital's investment thesis. Jeffrey employs a combination of self-sourcing and working with brokers, M&A advisors, and investment bankers to find potential acquisition targets.
The search process involves a meticulous evaluation of each business, considering factors such as product/service value, market potential, and growth opportunities. Jeffrey emphasizes the importance of understanding the story behind the numbers and the gut feeling that comes with it. He also highlights the significance of valuations and the need to navigate the complexities of determining a fair offer for both parties involved.
The Impact of COVID-19
COVID-19 has had a significant impact on the search for the right business to acquire. Jeffrey mentions that businesses heavily impacted by the pandemic and experiencing an unusual recovery pose challenges in terms of predicting future performance and determining valuation. While he remains open to considering such businesses, the uncertainty surrounding the economic landscape and potential future disruptions make it a more challenging proposition.
The Role of Marketing and Sales
Jeffrey expresses his excitement for businesses that have a great product or service but lack effective marketing and sales strategies. As someone with a background in operations and growth, he sees immense potential in helping these businesses reach their full potential. By leveraging his expertise in marketing and sales, Jeffrey aims to take these businesses to new heights and expand their impact.
The Importance of Understanding Valuation
One of the key takeaways from the podcast episode is the importance of understanding valuation. Jeffrey acknowledges that valuation can be a complex and often misunderstood aspect of the acquisition process. He emphasizes the need for business owners to have a clear understanding of the drivers of valuation and the factors that make a business investable. By demystifying the valuation process, business owners can make informed decisions and navigate their businesses' future with confidence.
Conclusion and Future Outlook
In conclusion, Jeffrey Oboy's search for the perfect business to acquire highlights the importance of finding a company that aligns with one's expertise and values. By focusing on businesses with growth potential, a clear succession plan, and a need for improved marketing and sales strategies, Jeffrey aims to make a significant impact as the CEO of the acquired company. While the search process can be challenging and time-consuming, Jeffrey remains optimistic about the future and the opportunities that lie ahead.
As the business landscape continues to evolve, it is crucial for aspiring acquisition entrepreneurs to carefully evaluate their value proposition and target businesses that offer growth potential and align with their expertise. By understanding the intricacies of valuation and staying informed about industry trends, acquisition entrepreneurs can navigate the acquisition process successfully and find the perfect business to acquire.
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This week’s “DEEPER” Dive: BOOOO! Avoiding The Scary Side of SMB M&A"
🎃 Welcome to the Haunted House of Mergers and Acquisitions! 🎃
Ah, Halloween—a time for trick-or-treating, haunted houses, and spine-chilling stories told in the dead of night. But what if I told you that the world of Small and Medium-sized Business (SMB) Mergers and Acquisitions (M&A) can be just as thrilling, filled with its own set of ghouls, goblins, and, yes, even monsters?
You see, M&A is a powerful tool in the SMB toolbelt, a veritable witches' brew of opportunities to grow, diversify, and increase market share. However, just like a haunted mansion with creaking floorboards and eerie paintings, the path to a successful merger or acquisition is fraught with peril. Navigating the complex hallways of valuation, legalities, and operational synergy is no less terrifying than facing a vampire in a dark alley or a werewolf howling at the full moon.
So, what's the objective of this article? Consider it your flashlight, your guidebook, your magical incantation that dispels the darkness. We're going to walk through the haunted corridors of SMB M&A, unmask the monsters lurking in the shadows, and reveal the secret potions that can make your M&A experience less of a horror show and more of a treat.
Grab your garlic, silver bullets, and spellbooks as we embark on this mystical journey to make sure your next M&A endeavor doesn't turn into an everlasting nightmare. From the ghostly pitfalls of overvaluation to the werewolves of cultural clash, we've got it all covered.
Ready? Take a deep breath. The door is creaking open. Welcome to the spooky, yet incredibly rewarding, world of SMB M&A. Let's make sure you come out on the other side not just alive, but thriving.
Let’s get into it…
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