The following is a growing list of commonly asked questions that we oftentimes get from interested parties, which we'll add to over time.
Yes, GT Entrepreneurs is actively seeking to partner with traditional searchers who are looking to or currently raising a search fund. We also provide gap capital investments to traditional searchers and self-funded searchers who are seeking additional capital for an acquisition. We'd love to talk with you should any of these scenarios match your description.
We like to think we're fairly flexible when it comes to total investment amount for our potential search partners. We are ideally looking to purchase a total of 1 or 2 units in most situations. This equates to roughly a 6%–16% equity stake assuming an average search fund raise of $480,000 with an average number of 12–16 units being sold. That being said, we are more than comfortable (and happy!) to buy smaller or larger amounts, as well.
No, we do not. We are fairly industry agnostic when it comes to our investment approach. Having said that, we need to feel confident about our searcher becoming CEO of a business in their target industry of choice. Whether it's having prior experience in said field or being able to tap into the expertise of an investor(s) that has significant relevant experience can be great ways to help alleviate any such concerns on our end.
We are currently only open to partnering with searchers that are looking for businesses located anywhere in the United States. Investing in international-market-focused searchers is a possibility in the future, but for now we are only focused on the US-market.
In short, no, we do not have any business size preferences. If we had to put numbers on it, though, we would expect that most of our searchers would be looking for businesses with EBITDAs ranging anywhere from $1M to $5M per the latest Stanford Search Fund Selected Observations report at the time of this writing.
There's a lot that goes into this answer, but in general, we are ideally not paying above 6x for any particular business (at least as of the time of this writing). Multiples are influenced by a number of varying factors and change over time so we are certainly open to potentially paying higher multiples on a case-by-case basis.
We realize that successful searchers can come from many different backgrounds and as such we take a very holistic approach when evaluating all of our potential search partners. At the end of the day, it comes down to us feeling completely comfortable with you stepping in and succeeding as CEO. Promising indicators of future success that we consider closely include having fairly significant experience managing people and/or teams, graduating from a top MBA program, and possessing an unmistakable entrepreneurial grit and mindset.
Not having one of these three traits doesn't preclude us from becoming partners, though. Case in point is one of our very own portfolio company operators who didn't have an MBA, but he possessed tremendous business ownership experience. He had owned and operated a very successful physical therapy brand for several decades and grew it across the region.
Again, the most important factor for us is your overall potential to successfully lead and grow a company and there are many ways to succeed in making that case.
Not necessarily. In fact, we see ourselves not taking board seats in most partnership situations.
By simply reaching out via phone or email! We're more than happy to setup a meeting to discuss your intention to search and how GTE can fit into that equation. With a passion for ETA and the hope for all aspired CEOs to be successful, our team enjoys talking with and mentoring people in all phases of their search journey.