In September, we celebrated our five-month anniversary, and accepted the 100th opportunity into our deal flow! We look forward to making our first investment and continue to pursue acquisitions of service based companies, primarily in Energy, Healthcare and Technology. We have pursued a number of opportunities, but have been a bit reluctant, and it appears we are not alone.
Other firms are reluctant to invest and in 3Q 2017 Private Equity (PE) firms invested over ~$160 billion across ~1000 deals, which is down 11% compared to the first three quarters of 2016.
And, there appears to be a classic supply and demand gap emerging.
The oldest baby boomer turns 71 in 20171, and there are ~ 12 million “baby boomers” who own small businesses nationwide2. For argument's sake, let's say that 1 million of those companies are considered viable – at current deal volume, it would take over 125 years for all of those companies to find a suitable exit. This is partly the problem Ryan and I set out to solve. As you may know, we offer owners a way to exit with liquidity and transition their company to a suitable successor; preserving the owner's legacy is one of our main priorities. If you or anyone you know are exploring the sale of your business, we can help. In fact, for the remainder of October, we are offering free valuations for businesses with EBITDA of $1.5+ million. To apply, visit the following page k2fund.co/valuation.
Thank You. We would like to extend a special thank you to those below. We are very lucky to have your support and look forward to an opportunity to reciprocate!
- Jasmine Ewing of Prime Health
- Keith Wegen of Flatirons Capital Advisors
- Matt Rasmusson of UMB Bank
- Michael King of Brownstein Hyatt Farber Schreck, LLP
- Tim Dailey of Peakview Partners
- Richard Thaler, UChicago won the Nobel Prize in Economic Sciences
- Mike Hartman, Chicago MBA, now Exec Director, Colorado Department of Revenue
- Sarah Wynn, MBA Candidate, University of Chicago '18. Sarah was our first hire and one of our absolute best! She started as an associate and has begun to oversee deal flow and fellow associates. After graduation, Sarah would like to pursue an investor communications role in venture capital or growth equity in New York, Chicago or San Francisco. Should you hire Sarah - you won't regret it!
- Marina Chumakova, MBA Candidate, University of Chicago '18. Marina was instrumental in shepherding many deals and her ability to analyze markets and business models is exceptional. After graduation, Marina would like to pursue a role in private equity, We endorse Marina fully!
- Alex Hechtner, B.S. Finance Candidate, University of Denver (DU) '18. Alex was our second hire and supported our industry analysis, development of internal processes and tools, as well as our outreach. At the DU, Alex is a Hornbeck Scholar, he also is the Portfolio Manager of the student-run Reiman Fund, a member of the Wall Street Club, and a member of the Student Investors Group. Alex is a team player with natural leadership abilities and is poised for a great career. After graduation, Alex would like to stay on the buy-side of private equity and would like to pursue a role in Denver; Chicago; or New York.
Open Positions. We are accepting applications for School Year and Summer Internships. Please direct any interested and qualified candidates to our Open Positions.
What We Are Reading.
- No A**hole Rule by Robert Sutton. A must-read for anyone looking to build a culture of collaboration and remove arrogance or ego
- Customer Development for Entrepreneurs by Mike Fishbein. A collection of simple tactics for anyone looking to reach customers
- What Your Innovation Process Should Look Like by Steve Blank and Pete Newell, a short list what most organizations will need to innovate internally
What We’re Watching. The World Series – go Astros!! (We are Indians fans. We’re supporting the Astros because I married into an Astros family and one of our teammates is from Houston.)
What We Are Exploring. "Reboot Your Board" an online course with tactics to develop a high functioning board. Regardless, Jerry Colonna offers a wealth of experience and practical knowledge for executives
Thoughts For Business Owners. Retirement for business owners is different than retirement for employees who work for companies owned by others. Many business owners have their retirement tied up in their own businesses and will need to sell part or all of their company to reveal the value of those assets. On that note, the following article in caught my eye by posing the question of “Baby Boomer” business owners, "Is Your Retirement Tied Up?"
Referrals. Following are a selection of anonymous opportunities that did not fit our criteria, but are attractive opportunities. If you are interested, email email@example.com and we will connect you with the appropriate party. We are not a broker-dealer. We are not a Wholesaler. Nor do we receive no compensation for referrals. Our aim is to help the same people who help us.
- Apollo - Non-medical home-based personal assistance services
- Apparatus - Industrial and agriculture equipment sales and service
- Asclepius - Biologics manufacturer
- Blowtorch - Specialized welding, pipe fitting, rigging, and engineering
- Chain hand - Oil & gas facility and pipeline contractor
- Habitat - Environmental consulting and civil engineering services
- Heat - Heating and air conditioning installer
- Hermes - Telecommunications and audio-visual systems integrator
- Liquid - Waterproofing and restoration contractor
- Omaha - Specialty pharmaceuticals
- Redwood - Horticulture equipment and supply wholesaler
- Themistocles - Drug rehab and disorder treatment center
- Tracks - Railroad track construction and track maintenance
- Trojan - Developer of workplace safety and protective equipment
1 California Business Association
2 U.S. Small Business Administration
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