Does anyone have any experience acquiring Minority Business Enterprises?

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April 02, 2019

by a searcher from Emory University - Goizueta Business School in Atlanta, Georgia, United States

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Reply by a searcher
from Northwestern University in Atlanta, GA, USA
The traditional Search Investors for the fund I interned for shied away from businesses serving government entities since, more often than not, there tends to be greater customer concentration in these companies. Having state or municipal government customers across different geographies with contracts won due to minority ownership status mitigates some of this risk. Some investors in your capital stack may have to be creatively structured as high-yield or convertible debt to maintain minority ownership.
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Reply by an investor
from University of Notre Dame in Pittsburgh, PA, USA
No but its a real opportunity. Try to network in the D.C./Virginia area as there are lots of minority designated businesses serving various government entities. Just be careful as you think through your "exit" opportunities as they will be much more limited - also if you are not personally putting the capital in yourself you will need to make sure your LP/Investors and structure will qualify.
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