Experience with firearms deals?

by a searcher from Georgia Institute of Technology

2 years ago

I'm looking at a company which runs auctions, and has a small component (~10% of ebitda) tied to firearms auctions.  Has anybody done deals in the firearms space, and know of any lenders / equity providers who specifically take on these types of deals?

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searcher from The University of Michigan - Stephen M. Ross School of Business

I had a friend who launched a business in the retail firearms space and ran into a number of challenges he didn't realize before entering. One that particularly stood out was his inability to access digital marketing channels to drive customers into a physical retail space. Social media platforms, Google, etc all prevented him in one way or another from advertising for violation of terms of service (in most cases, advertisement for anything firearms related). Advertising was one example, but he faced numerous similar challenges across his various business functions. Having seen his challenges, if I were entering the space, I would seek to deeply understand execution with regards to regulatory requirements and corporate policies/restrictions driven by public perception surrounding firearms.

While he didn't work with outside lenders/equity partners, there were either trade organizations/print publications/online communities where firearms industry specific firms advertised to fill the void of services not provided by typical banks and service providers. Seemed like many lenders didn't want the additional liability (ex: he was never able to secure an inventory LOC).

Probably ways around all of these challenges, and this is secondhand anecdote at best. Just knew navigating roadblocks was a constant struggle for him.

2 years ago | like reply | 0 likes

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