On the pre-fund stage, do you think it is recomendable to approach owners?

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December 07, 2020

by a searcher from Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM) in Monterrey, N.L., México

We are starting our search mid january, but are already looking for companies and we have been able to talk to some owners that showed interest. We are afraid to get to a point where not having the fund established might make us lose credibility in the process. Should we slow down?

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commentor profile
Reply by a searcher
from Duke University in Mountain View, CA, USA
Have these conversations as quickly or as soon as you can. You will learn a lot in the process and get a better idea of what the market is like out there in the LMM world. Just from my experience in doing this, many sellers are looking for a high (or higher) multiple. Succession/transition to an operator who will keep their vision alive is a secondary consideration, if it is a consideration at all, even though the idea of that is fairly popular in the SF community.
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Reply by a searcher
from University of Illinois at Chicago in Madison, WI, USA
Never too early to start looking investors and targets. In experience, few of those who are “interested” ever get to the signed LOI stage. Besides, January really isn’t all that far away and with holidays coming up, that time will fly by.
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