The Benefits of Selling Your Company to a Family Office

About the Episode

Talking about selling a middle-market company to a family office vs. a PE firm, James Carey has a detailed conversation on the differences between these buyers. He discusses the time frames each has for seeing a return on their capital investments, what a family office looks for when deciding to partner with an entrepreneur, why family offices tend to be hands-on in how they operate and interact with their portfolio companies and the implications these issues have on the sales process and afterward.

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“With a family office, the timing [on getting a return on the investment] is more flexible than it is for a PE firm. We’re a lot more patient, and our capital is a little friendlier, meaning we’re more forgiving if there is a hiccup in the business. We look at it as a family of companies or partners, not just a fund of investments.” 

James Carey 

In this Episode

Learn More

• The Role of Family Offices in M&A
• The Private Equity Toolkit with Michael Roher
• The Basics of Independent (Fundless) Sponsors in M&A
• M&A Guide | The 4 Types of Buyers of Businesses

Listen to Other Episodes

• Selling Your Company to a Private Equity Firm vs. a Family Office
• Family Offices and Management Buyouts – What You Need to Know
• Family Offices – What They Look for When Buying a Company

Resources Mentioned in This Episode

• Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue by Jacob Orosz
• The Art of the Exit: The Complete Guide to Selling Your Business by Jacob Orosz
• The Private Equity Toolkit: A Step-by-Step Guide to Getting Deals Done from Sourcing to Exit

Terms Mentioned in This Episode

• PE Firms: private equity firms – Organizations that invest in private companies or that take public companies private, often with the goal of improving performance and selling later for a profit.
• VC Firms: venture capital firms – These are entities that provide financial support to startups and small companies with high growth potential in exchange for equity or ownership.
• LPs: limited partners – These are investors who contribute capital to a PE firm that is raising funds for acquisitions.
• EBIT: earnings before interest and taxes – A measure of a company’s operating profitability, calculated as revenue minus operating expenses.
• EBITDA: A measurement of the cash flow of a company, which includes earnings before interest, taxes, depreciation, and amortization. 
• Majority Investment: An investment where the investor acquires more than 50% ownership stake in a company, giving them control over decision-making.
• Minority Investment: An investment where the investor acquires less than 50% ownership stake in a company, allowing them to have a stake in the business without controlling interest.
• LTIP: long-term investment plan – An equity sharing plan for the CEO, owner, or founder, and key employees that acts as an incentive plan for them to get more equity in the business over time.

Meet Our Guest

James Carey

Family Office Professional

James Carey is a Partner at Next Sparc Growth Partners. This professional family office makes direct investments in rapidly growing founder-led and family-owned businesses, leading the Business Development efforts at the firm. Before joining Next Sparc, James was a Vice President and the Head of Business Development at Peterson Partners, a diversified private investment firm focused on growth equity and venture capital investments. Prior to joining Peterson Partners, James was a Director at H.I.G. Capital, a leading global private equity investment firm with over $50 billion of equity capital under management, where he sat across the entire family of funds. Earlier in his career, James was an Associate at New River Capital Partners, an affiliate of Huizenga Holdings, where he was responsible for Corporate Development. James received a Bachelor of Science in Business Administration from the University of Vermont in Burlington.

Location: Miami, Florida

LinkedIn: www.linkedin.com/in/jamesjcarey

Website: www.nextsparc.com

Email: [email protected]