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Simon Webster - British Search Fund Association - The Search Fund Story
Entrepreneurs World Event - 10 June 2010 - A reminder for those that were there - A flavour of the meeting for those that could not make it
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Simon Webster The Search Fund Story Entrepreneurs World 10 June 2010
1. History
1.1 IBM
1.2 Wanted Equity
1.3 MBA
1.3.1 London Business School
1.3.2 Discovered Search Funds
2. Search Funding
2.1 Normal Route
2.1.1 Fought Against
2.2 A concept
2.2.1 Not a business
2.3 Learning
2.3.1 Networking
2.3.2 Objections
3. First Search
3.1 3.5 years
3.2 Funded
3.2.1 by 10 x £10,000
3.3 Real Investment
3.4 Being Effective
3.4.1 Focus
3.4.2 Direct Approach To Owners
3.5 Built Relationship before Acquisition
4. Bought
4.1 Lost major contact in 1st 3 months
4.2 Had investors who supported
4.2.1 Not kickers
4.3 Now profitable and growing over 10 years
4.3.1 Turnover
4.3.1.1 £3m to £30m
4.3.2 Profit
4.3.2.1 £400k to £2m
5. Steeper
5.1 The weakening competitor
5.2 Acquire
5.3 Integrate
5.3.1 Consultation
5.3.2 Redundancies
5.3.3 Feeding back their ideas
5.4 Understanding the Business
5.4.1 Costs of Assemblies
5.5 VAT problem
5.5.1 £1,000,000
5.5.2 Did everyone else have same problem?
5.5.3 18 months to resolve
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6. KISS
6.1 3 Factories
6.2 14 Offices
6.3 450 People
6.4 30 sections down to 20
6.5 Keep it simple
7. Problems
7.1 Keep interested parties informed
7.1.1 Non Execs
7.1.2 Shareholders
7.1.3 Banks
8. Yourself
8.1 Take time out
8.2 Charity Event
8.2.1 Just a team member
9. Average Return on Search Fund Investment
9.1 52% IRR
10. Simon Webster
10.1 RSLSteeper
10.1.1 Ex CEO
10.2 British Search Fund Association
10.2.1 Chairman
10.2.1.1 Mentoring 5 Search Funders
10.2.2 Soon to be ESFA
10.3 Webster's Shoes UK
10.3.1 Chairman
10.4 Abacus Partners
10.4.1 Investor and Non -Exec
10.4.2 A search fund that has raised the fund and is looking for a company
10.5 Ivy Partners
10.5.1 Partner
10.6 MyDish.co.uk
10.6.1 Investor and Non Exec
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Questions and Answers
1. How did you keep being you?
1.1 Recognise core skills
1.2 Had 2 non-exec
1.3 Wanted to be a Chief Executive
2. Search Criteria?
2.1 Profitable
2.2 Cash Generating
2.3 Understandable
2.4 Stable Management Team
2.5 Firm contracts
3. How did you reject the frogs?
3.1 Trusted my gut
3.2 Close Fits
3.2.1 But
4. Proprietary product?
4.1 Yes
4.1.1 On the list
4.1.2 Preferably field leader
5. Service or Product?
5.1 Service is easier
6. Was the MBA useful?
6.1 Pre-acquisition
6.1.1 Easier (but still tough!) to understand figures
6.2 Post
6.2.1 Identifying areas I needed help with
7. What makes you standout as search fund investor?
7.1 We grow businesses
7.2 We don't strip them
8. Lost contract effect?
8.1 Re-ran figures
8.2 Could have gone to shareholders
9. How did you choose your shareholder?
9.1 First ten
9.2 Preferred seasoned investors and managers
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10. Rationalising manufacturing?
10.1 All the processes on a site
10.2 Outsourced PCB manufacture
11. Who is the WE?
11.1 Mainly I
11.1.1 Initially
11.2 Easier managing larger company
11.3 No consultants
11.4 Network advice
12. Investors Rate of Recruitment?
12.1 First 1-3 important
12.2 7-8 easy
12.3 6 months
12.4 Easier with US investors
13. How did you attract investors?
13.1 Spreadsheets
13.2 30% IRR
13.3 3 way
13.3.1 Equity
13.3.2 Vendor Loan
13.3.3 Bank Finance
14. What do you tell investors to attract them?
14.1 You will be CEO
14.2 They buy an option
14.3 Their investments rolls over into the deal
15. UK v US Investor?
15.1 USA
15.1.1 Further ahead
15.1.2 Relaxed
15.2 UK
15.2.1 Detailed
16. Current Activity?
16.1 See above
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