“There’s a lot of information that comes out through LOI conversations and a deal tends to die two or three times during this process. It can be a very exhausting emotional aspect for the owner that they may not have prepared for.” – Malcolm Peace
Malcolm Peace is president of Tsetserra Growth Partners (pronounced sit-Sarah), an investment firm in Texas that works with well-established businesses that have owners just about to retire who still want to see their businesses thrive. They identify profitable small businesses with revenues from $3.5 million to $12 million in stable industries, such as food & beverage, hospitality, manufacturing, logistics & distribution, and more. Malcolm and his team help rewrite the operating playbook of a company while maintaining the owner’s culture with a strong succession plan.
Malcolm has a B.S. in Psychology from James Madison University and an M.B.A. from the University of Virginia Darden School of Business.
- What does Tsetserra Growth Partners do? [3:03]
- What makes a company interesting as a candidate for acquisition? [7:55]
- What adjustments can be made to a business to help lower-middle market companies grow? [9:02]
- Are there challenges that exist for business owners who tend to work in the business rather than on the business? [14:11]
- How can an investment firm create alignment between owners and employees? [20:16]
- Is there a framework to help mitigate risk in an acquisition? [22:44]
- What is the number one mistake that business owners make? [29:58]
- How prepared are most business owners for due diligence? [32:03]
- What is the purpose of reps and warranties from the buyer’s perspective? [37:09]
- What criteria does Tsetserra Growth Partners look for when they are evaluating a business for possible acquisition? [40:35]
- How subjective are the opinions of appraisers? [45:57]
- What are the most important considerations when structuring a transaction? [47:25]
- How long does it take to close a deal? [52:05]
- Why is it so hard to sell a business? [57:48]
- What is a piece of advice for middle-market business owners? [1:05:07]
- Tsetserra Growth Partners is hiring Operating Partners, and this is what qualifications they are looking for. [1:06:51]
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Acronyms or Terms Used in This Episode
- OKRs: objectives and key results
- 1031 Exchange: A way to postpone capital gains tax on selling a business or investment property by using the proceeds to buy a similar property.
- Commitment Letter: A formal document from a lender stating that the buyer has been approved for a loan.
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