Looking to buy on my own, good or bad idea?
December 20, 2020
by a searcher from Pepperdine University - Graziadio School of Business and Management in Los Angeles, CA, USA
I have access to about $1.5M that I would like to use to buy a $5M-$7M business. I would get a bank loan to cover the difference. I have 20 years of business experience, especially in digital marketing. I don't have access to outside investors though. I would be buying the deal on my own.
Would I be able to find a good deal on my own? Am I having realistic expectations?
from University of California, Los Angeles in La Jolla, San Diego, CA, USA
Been going through a similar evaluation but not the same deal size. Here’s where am I am now
PROS:
*No need to raise outside capital (duh!) but that means less time trying to sell investors, less legal work and cost, and less paperwork in general.
*Greater autonomy - LPs have reduced authority anyway, but if there are none, you can buy, operate, inject/remove capital, exit or never exit, all on your own doing
CONS:
*Lack of Diversification - Presumably your putting your time, skills, and now capital into this business. Whereas, if you were to invest that money elsewhere and then raise money for this acquisition, you would reduce risk and put less pressure on this deal.
*Oversight - The flip side of autonomy is lack of accountability. Minus employees and maybe your family, without shareholders to help keep you on track, it’s all your shoulders. You may be able to create this with great advisors, but it would be hard to replicate.
from Harvard University in Nashville, TN, USA