I get approached by quite a few Independent sponsor groups that are just getting started and they always come to me with great aspirations of building an empire. I love it! The first piece of advice I give them is the following:
I always remind them that it is important, when you are a first time Independent sponsor, to pick and stick to one industry. It should be an industry they know very well and have many connections in.
There are many attractive industries to jump into but, if you jump into an industry you don't have much experience in, you will only delay the very reason why you became an independent sponsor; to acquire businesses, grow, and exit really good businesses in the lower middle market.
Now, there are various ways to set up your investment vehicle, but for a group that doesn't necessarily have the resources to hire on a dedicated deal team, it's important to think about how you can bring value to the Industry, your investors, and the particular kind of business you are looking to acquire.
Firms like Grayscale are uniquely poised to help with the process of getting organized and ready to start the search phase to get to a live deal, conduct proper due diligence, raise capital, close the deal and execute your growth strategy for a successful exit.
If you have questions about getting organized or any stage in the deal making process, feel free to reach out to one of our team members. We would love to have a conversation with you.