Sonoran Capital

Acquisitions

OnPlan

Chief Financial Officer

OnPlan is a powerful FP&A platform that provides you with insight into your  business.  Enjoy better visibility, greater transparency and more effective benchmarking.

CEO, Founder

Texas Tax Loan

President

Boost Media

Boost is an enterprise solution for optimizing ad creative at scale across Search, Social, Display & Mobile. 
 
Boost increases advertiser profitability by using a combination of humans and software to drive increased ad relevance at scale. The Boost marketplace is comprised of over 1,000 expert copywriters and image optimizers who compete to provide a diverse array of perspectives. Boost’s proprietary software identifies opportunities for optimization and drives performance using a combination of workflow tools and algorithms. 
 
The Company focuses on optimizing for enterprise advertisers and generates substantial improvements in conversions-per-impression for customers. Today, Boost is trusted to drive optimization and insights for over $300 million in advertising spend across networks and premium publisher sites such as Google, Microsoft+Yahoo Bing Ads and Facebook.

Interval International (IAC Portfolio Company)

Leadership role in $110 M acquisition of Aston Hotels in Hawaii.

Director, Strategy & M&A

Plum Capital

Involved with strategic, operational and financial management of growing companies. Private equity due diligence, deal structuring, portfolio management.  Plum Capital is an early stage venture capital firm that focuses on early stage media opportunities.

Associate

Goldman Sachs

Analyst

LiveBuilding

Founder

CEO at OnPlan.co - a fast and flexible FP&A platform that makes financial reporting easy. Follow me for posts about FP&A, excel humor, startups and life in finance.

Today, I'm the CEO of OnPlan.co ...

But, if I was endowed with a better eye, I would have been a painter.

But as it turns out, my drawing skills make the Family Guy look like high art. 

Instead, I’ve been funneling my passion for creativity towards spreadsheets and entrepreneurship for the better part of two decades. I’m passionate about building companies - it allows you to delve into a multitude of disciplines from UX/UI (the closest to art that I can get) to analytics to metrics to fundraising.  

I started my career in FP&A in the travel sector and I am now a 2nd time founder of a VC backed startup. OnPlan.co is a modern budgeting and forecasting platform that works seamlessly with Excel and Google Sheets and your existing model. You can think of OnPlan.co as a Data Visualization, Data Integration, and Workflow and Collaboration platform that sits on top of Google Sheets & Excel.

I am passionate about extending the powers of spreadsheets and generating user experiences that are intuitive. My greatest joy would be to make OnPlan.co the Airtable of FP&A.  

I am interested in connecting with like minded passionate finance professionals and entrepreneurs.  Along the way I hope to impart some lessons that I’ve learned in terms of modeling, company building, culture building and harnessing one's passion for creativity into entrepreneurship.

If this resonates with you please reach out to me!

David Greenbaum

Financial Modeling Education

Financial Modeling Courses for Investment Banking, Private Equity, and FP&A.

Mission Capital Consulting

Leesa Sleep

Board Member

TitleCard Capital Group, LLC

Vice President

Lariat Partners, LP

Hilton

Senior Analyst

FTI Consulting

Consultant

👇50% off all Financial Modeling Courses this week only.

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After being up until 2am the previous night, I had my head in my hands at a Colorado Rockies’ game, so insanely overwhelmed because I felt unprepared building a financial model.

Today, I can build in 2 𝘩𝘰𝘶𝘳𝘴 what used to take me 𝘸𝘦𝘦𝘬𝘴, and it’s definitely 𝘯𝘰𝘵 because I’m smarter, it’s because... 𝗜 𝗞𝗻𝗼𝘄 𝗪𝗵𝗮𝘁 𝘁𝗼 𝗗𝗼.

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Chris Reilly

I teach Financial Modeling, but...

I only use 3 advanced Excel formulas on a regular basis.

Don’t get me wrong -- Excel has some incredible functionality.

But I still find a lot of it complicated (and honestly, unnecessary for day-to-day modeling).

Here are the only "advanced" formulas I really use:

   – INDEX/MATCH (sometimes XLOOKUP)
   – SUMIFS
   – SUMPRODUCT

Btw, these are usually for summary tabs -- not the detailed guts of the model.

(Think dashboards)

~~~
📍 𝗕𝘁𝘄: Here's an Income Statement template to get you started 👉 https://lnkd.in/exez-uUT 
~~~


Everywhere else, I pretty much live here:

   – SUM
   – AVERAGE
   – Direct cell links ( = )
   – Plus ( + )
   – Minus ( - )
   – Divide ( / )
   – Multiply ( x )

Just basic Excel 101.

That’s 95% of my modeling.

Yes, sometimes I have to get fancy and calculate IRR or use dynamic array functions.

Or combine a few of the functions above to achieve a result.

But those moments are rare -- especially in standard ​FP&A operating models​.

And after all these years, I’ve learned one thing:

~~~
💡 𝙏𝙝𝙚 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙬𝙞𝙡𝙡 𝙖𝙡𝙬𝙖𝙮𝙨 𝙘𝙤𝙢𝙥𝙡𝙞𝙘𝙖𝙩𝙚 𝙩𝙝𝙚 𝙛𝙞𝙡𝙚.  𝘿𝙤𝙣’𝙩 𝙡𝙚𝙩 𝙩𝙝𝙚 𝙛𝙞𝙡𝙚 𝙘𝙤𝙢𝙥𝙡𝙞𝙘𝙖𝙩𝙚 𝙩𝙝𝙚 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨.
~~~

So, keep it simple where you can (to be user-friendly).

Make it scalable on the back-end (to reduce error).

And only complicate it when you truly have to.



p.s. If you're feeling a little stuck in "Excel hell" and want to learn to build models like a business owner, I can help 👉 https://bit.ly/FMECourses

I can help you master Three Statement Modeling & 13 Week Cash Flow Forecasting in 8 hours.

50 Excel shortcuts for modeling 👉 https://lnkd.in/esbZCXje 


🟢 𝗕𝗲𝗴𝗶𝗻𝗻𝗲𝗿

Copy (Ctrl + C)
Paste (Ctrl + V)
Cut (Ctrl + X)
Undo (Ctrl + Z)
Redo (Ctrl + Y)
Save (Ctrl + S)
Bold (Ctrl + B)
Italic (Ctrl + I)
Underline (Ctrl + U)
Select entire column (Ctrl + Space)
Select entire row (Shift + Space)
Insert row (Ctrl + Shift + '+')
Delete row (Ctrl + '-')
Open format cells dialog (Ctrl + 1)
Insert comment (threaded note) (Alt + R + C)

🟠 𝗜𝗻𝘁𝗲𝗿𝗺𝗲𝗱𝗶𝗮𝘁𝗲

Fill down (Ctrl + D)
Fill right (Ctrl + R)
Apply currency format (Ctrl + Shift + $)
Apply percent format (Ctrl + Shift + %)
Apply border (Ctrl + Shift + &)
Format painter (ribbon) (Alt + H + F + P)
Hide rows (Ctrl + 9)
Hide columns (Ctrl + 0)
Go to specific cell (F5)
Select visible cells only (Alt + ;)
Freeze top row (Alt + W + F + R)
Move to next worksheet (Ctrl + Page Down)
Move to previous worksheet (Ctrl + Page Up)
Switch open workbooks (Ctrl + Tab)
Open name manager (Ctrl + F3)

🔴 𝗔𝗱𝘃𝗮𝗻𝗰𝗲𝗱

Show formulas (Ctrl + `)
Evaluate formula (Alt + M + V)
Name a range (Ctrl + F3)
Create a table (Ctrl + T)
Insert function (Shift + F3)
Jump to precedents (Ctrl + [)
Jump to dependents (Ctrl + ])
Go to special (Ctrl + G → Special)
Paste special (Ctrl + Alt + V)
Flash fill (Ctrl + E)
Repeat last action (F4)
Group rows/columns (Alt + Shift + →)
Ungroup rows/columns (Alt + Shift + ←)
Collapse outline (Alt + A + H)
Return to previous location (F5 → Enter)

🔵 𝗕𝗲𝘀𝘁 𝗳𝗼𝗿 𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴

Lock cell reference (F4)
Add line break in cell (Alt + Enter)
Insert today’s date (Ctrl + ;)
Insert current time (Ctrl + Shift + ;)
Recalculate workbook (Ctrl + Alt + F9)
Paste values only (Alt + E + S + V)
Format as number (Ctrl + Shift + 1)
Format as date (Ctrl + Shift + 3)
Format as time (Ctrl + Shift + 2)
Increase decimal (Alt + H + 0)
Decrease decimal (Alt + H + 9)
Toggle absolute/relative (F4 (in formula bar))
Apply general format (Ctrl + Shift + ~)
Select entire worksheet (Ctrl + A (twice))
Add horizontal border (Alt + H + B + H)

⚠️ 𝗗𝗶𝘀𝗰𝗹𝗮𝗶𝗺𝗲𝗿

Knowing Excel shortcuts 𝙬𝙤𝙣'𝙩 get you a seat on the Board, but it will help you speed up what the Board needs: 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗺𝗼𝗱𝗲𝗹𝘀 they can actually understand, that help you decide what the business should do next.

Want to put all those shortcuts to good use?

Master three statement modeling here: https://bit.ly/FMECourses

𝗕𝗥𝗘𝗔𝗞𝗜𝗡𝗚 — Board Rejects AI Financial Model

After opening Excel Online for the first (and last) time ever, local financial modeler Chris Reilly proudly told the Board, “Yeah, AI made the whole thing.  It took eight minutes and I went and got coffee.”

The model reportedly included three statements, a debt schedule, and a circular reference that Reilly claimed "achieved sentience" before obliterating itself into a wall of cells that just said #𝗡𝗔𝗠𝗘?.

“While we’d love to write a blank check for millions of dollars with zero diligence, we unfortunately needed at least one 𝘩𝘶𝘮𝘢𝘯 brain to validate and interpret the output,” said the anchor LP of a large fund-of-funds.

“Loved his spirit,” added one Board member, “but that thing had more hallucinations than me in college.”

Despite promises that AI would “𝘣𝘶𝘪𝘭𝘥 𝘮𝘰𝘥𝘦𝘭𝘴 𝘪𝘯 𝘴𝘦𝘤𝘰𝘯𝘥𝘴 𝘴𝘰 𝘺𝘰𝘶 𝘤𝘢𝘯 𝘧𝘰𝘤𝘶𝘴 𝘰𝘯 𝘴𝘵𝘳𝘢𝘵𝘦𝘨𝘺,” the model apparently fabricated an entire new product line, three subsidiaries, and an IPO scheduled for next Thursday.

Sources went on to confirm the model forecasted 400% annual growth, negative expenses, and “infinite free cash flow.”

At press time, Reilly was reportedly seen updating the headline of his resume to "Chief Prompt Engineer."

Learn the statement of cash flows with this simple AF one-pager 👇


✓ 𝙍𝙚𝙦𝙪𝙚𝙨𝙩 𝙇𝙞𝙨𝙩

First things first, you'll need some data.

Ask for the Income Statement and the Balance Sheet.


✓ 𝙎𝙩𝙚𝙥𝙨 — 𝙄𝙣𝙘𝙤𝙢𝙚 𝙎𝙩𝙖𝙩𝙚𝙢𝙚𝙣𝙩

1. Pull the Net Income from the Income Statement

2. Pull the Depreciation from the Income Statement

(or use the change in Accumulated Depreciation from the Balance Sheet if available)


✓ 𝙎𝙩𝙚𝙥𝙨 — 𝘽𝙖𝙡𝙖𝙣𝙘𝙚 𝙎𝙝𝙚𝙚𝙩

You're calculating the 𝘤𝘩𝘢𝘯𝘨𝘦𝘴 between two periods.

For Assets: Previous Period - Current Period

For Liabilities & Equity: Current Period - Previous Period

(note, if Fixed Assets are shown on a "net basis," you'll need to subtract Depreciation from your calculation as well)

~~~
📥 btw, here's a balance sheet guide 👉 https://lnkd.in/ew4nwaVx 
~~~


✓ 𝙀𝙣𝙙 𝙍𝙚𝙨𝙪𝙡𝙩

If done correctly, the ending cash should match what you see on the Balance Sheet.

Once it does, you can be confident your model is structurally sound.

And now you can carry those formulas forward to reflect your forecast.


💡𝙋𝙧𝙤 𝙏𝙞𝙥

Once your Statement of Cash Flows is built correctly, you leave it alone.

~~~𝗙𝗢𝗥𝗘𝗩𝗘𝗥~~~

Your modeling should only be done in the Income Statement and Balance Sheet.

The Statement of Cash Flows is nothing more than a formulaic bridge between the other two statements.


✓ 𝙎𝙠𝙞𝙢𝙢𝙖𝙗𝙡𝙚 𝙑𝙚𝙧𝙨𝙞𝙤𝙣

   • Get Income Statement & Balance Sheet
   • Calculate Changes b/t Balance Sheet
   • Works correctly when Ending Cash matches the Balance Sheet


~~~

Hey! I'm Chris Reilly, and I teach financial modeling.

I can help you master Three Statement Modeling in a few hours.

↪ https://bit.ly/FMECourses

Check out this video...

How you can use SUMPRODUCT to spot errors in your model 👇

~~~
📥 𝘱.𝘴. 𝘩𝘦𝘳𝘦'𝘴 𝘵𝘩𝘦 𝘥𝘢𝘴𝘩𝘣𝘰𝘢𝘳𝘥 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘷𝘪𝘥𝘦𝘰 👉 https://lnkd.in/efdpVuxX 
~~~

𝗧𝗵𝗲 𝗳𝗼𝗿𝗺𝘂𝗹𝗮

Here's the formula: =SUMPRODUCT(--iserror([range]))

Note: In the video I incorrectly say "double negative 🙃," but Matthew Herbert of BizTrix pointed out that:

"The double minus is an operator, not negation. The double minus is the unary operator and it explicitly converts logical values into numbers (true converts to 1 and false converts to 0). ISERROR returns a logical value. This is why SUM(ISERROR(range)) or SUMPRODUCT(ISERROR(range)) returns 0 but placing the unary operator in front of ISERROR returns >0 when there is an error."

I have no idea what that means, but sounds good to me.

(Even as an experienced user and instructor there's always something new to learn!)


𝗨𝘀𝗲 𝗰𝗮𝘀𝗲

I will often put this SUMPRODUCT formula in the upper-left corner of a given sheet, and use it as a quick check/scan to see if any errors pop up.

Maybe something helpful you can add to your model 🙂.



~~~

👋 Hey, I'm Chris Reilly -- I teach financial modeling the way I 𝘸𝘪𝘴𝘩 someone taught me.

🎓 I can help you master Three Statement Modeling and 13 Week Cash Flow Forecasting in only 8 hours -- and you'll complete your first working model in just 45 minutes.

↪ https://bit.ly/FMECourses

Hey so that model you just emailed your boss...

...did you check it for errors?


For real though, how closely?

(slamming F2 saying "looks good looks good looks good" isn't a strategy)

I hate to break it to you, but 90% of all spreadsheets contain errors.

(𝘎𝘰𝘰𝘨𝘭𝘦 𝘪𝘵)

That's an A- in being wrong.

Not great.

The truth is, Excel's amazing flexibility also exposes our 𝘩𝘶𝘮𝘢𝘯 limitations —

We make mistakes.

All of us.

———

If there is software out there that can be:

▪️ a grocery list, and;

▪️ a time keeper, and;

▪️ billion-dollar LBO, then;

𝘴𝘶𝘳𝘦𝘭𝘺 the human mind can find a way to make a mistake.

(I've done it plenty of times)

———

That's why the first thing I do with every file is build "error checks."

It's a separate tab.

I call it "QC" for "Quality Control."

Others call it "QA" ("Quality Assurance").

Others call it "Errors" or "Validations."

Doesn't matter what you call it, 𝘺𝘰𝘶 𝘫𝘶𝘴𝘵 𝘸𝘢𝘯𝘵 𝘵𝘰 𝘩𝘢𝘷𝘦 𝘪𝘵.

———

You link all your possible errors to this one place.

▪️ Does my Balance Sheet balance?

▪️ Does my Statement of Cash Flows match the Balance Sheet?

▪️ Are my Covenants in compliance?

▪️ Does my Cash go negative?

Then at the top, you put a "𝗠𝗔𝗦𝗧𝗘𝗥 𝗖𝗛𝗘𝗖𝗞 𝗖𝗘𝗟𝗟."

The Master Check Cell references all the 𝘰𝘵𝘩𝘦𝘳 errors below.

And ~𝗣𝗿𝗼 𝗧𝗶𝗽~ you link this Master Check Cell to cell A1 of 𝘦𝘷𝘦𝘳𝘺 𝘰𝘵𝘩𝘦𝘳 𝘵𝘢𝘣 in your workbook.

That way, when something goes wrong (and it will),

you are 𝘪𝘮𝘮𝘦𝘥𝘪𝘢𝘵𝘦𝘭𝘺 notified (in cell A1), and you can investigate.

𝗤𝘂𝗶𝗰𝗸 𝘁𝗶𝗽:

▪️ press "ctrl + [ " on cell A1

▪️ it will bring you to your "QC" tab

———

I've got an example in the image below.

You can see my list of possible errors,

and my "Master Check Cell" at the top.

For complicated files I will have hundreds of these.

It is the first and last tab I 𝘢𝘭𝘸𝘢𝘺𝘴 check before hitting "send" in my email.


𝙉𝙚𝙭𝙩 𝙎𝙩𝙚𝙥𝙨 ⤵️

📥 Stay organized with this modeling checklist 👉 https://lnkd.in/eVTU67fY 

✅ Master this error-checking technique with step-by-step videos 👉 https://bit.ly/FMECourses

Three statement modeling can be overwhelming when you're starting out.

Here's what to do when "you don't know what you don't know" 👇


1️⃣ 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰𝗮𝗹 𝗜𝗻𝗰𝗼𝗺𝗲 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁 & 𝗕𝗮𝗹𝗮𝗻𝗰𝗲 𝗦𝗵𝗲𝗲𝘁

This is your first request.

You need the 𝘩𝘪𝘴𝘵𝘰𝘳𝘪𝘤𝘢𝘭 Income Statement and Balance Sheet 𝘣𝘺 𝘮𝘰𝘯𝘵𝘩.

Hard to believe, but it's all you need to build a complete three statement model.


2️⃣ 𝗕𝘂𝗶𝗹𝗱 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰𝗮𝗹 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄𝘀

This is the step everyone gets wrong.

They get the IS and BS from above and immediately start building a Revenue forecast.

No. Not yet.

Build the 𝘩𝘪𝘴𝘵𝘰𝘳𝘪𝘤𝘢𝘭 cash flows first.

Why?

The Ending Cash on your Balance Sheet is already available as a reference point.

So, using the 𝗶𝗻𝗱𝗶𝗿𝗲𝗰𝘁 𝗺𝗲𝘁𝗵𝗼𝗱, you should be able to build a Statement of Cash Flows that 𝘮𝘢𝘵𝘤𝘩𝘦𝘴 the Balance Sheet.

This is your early double-check that your model is working correctly.

The Ending Cash should match for every month of the historical period.

Once you get this right, 𝘵𝘩𝘦𝘯 you're ready to move on.

~~~
📌 𝘣𝘵𝘸 𝘩𝘦𝘳𝘦'𝘴 𝘢 𝘥𝘦𝘵𝘢𝘪𝘭𝘦𝘥 𝘤𝘩𝘦𝘤𝘬𝘭𝘪𝘴𝘵: https://lnkd.in/eVTU67fY 
~~~


3️⃣ 𝗦𝘄𝗶𝘁𝗰𝗵 𝘁𝗼 "𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁 𝗠𝗼𝗱𝗲"

Since your SCF works correctly, now you're ready to create the "plumbing" for the forecast.

Drag your columns forward for as many months as you need.

(Typically three statement model is 3-5 years).

Leave your Income Statement entirely flat & unchanged.

𝗛𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗽𝗮𝗿𝘁:

Balance Sheet needs 2 things:

   1) Ending Cash now links to your SCF
   2) Retained Earnings = Prior Period + Current Period Net Income

✅ This will make your Balance Sheet Balance.


4️⃣ 𝗕𝘂𝗶𝗹𝗱 𝗮 𝗕𝗮𝘀𝗶𝗰 𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁

Now that your plumbing is correct, you can build a basic forecast:

   ↳ YoY % growth for Revenue (fine for now)
   ↳ COGS as % of Revenue
   ↳ G&A mostly fixed + inflation assumption
   ↳ Calculate Net Income & EBITDA

   ↳ Build Working Capital (AR, AP, Inventory using DSO, DOH, DPO)
   ↳ Deferred Revenue
   ↳ Tax Accrual
   ↳ Bonus Accrual
   ↳ Debt Schedule
   ↳ Equity Schedule (if needed)

A lot of these can be done with "BASE Modeling," i.e.:

𝗕𝗲𝗴𝗶𝗻𝗻𝗶𝗻𝗴 𝗕𝗼𝗻𝘂𝘀
   (+) Bonus Expense
   (-) Bonus Cash Payments
𝗘𝗻𝗱𝗶𝗻𝗴 𝗕𝗼𝗻𝘂𝘀

(Ending Balance links back to your Balance Sheet).


🧠 𝗥𝗲𝗺𝗲𝗺𝗯𝗲𝗿: Every experienced modeler started exactly where you are.

   ↳ Start with the history
   ↳ Get the "plumbing" right
   ↳ Build a basic forecast
   ↳ Add details later

Hope this helps 🙂.


~~~
𝘱.𝘴. 𝘪𝘧 𝘺𝘰𝘶'𝘥 𝘱𝘳𝘦𝘧𝘦𝘳 𝘵𝘰 𝘸𝘢𝘵𝘤𝘩 𝘷𝘪𝘥𝘦𝘰𝘴 𝘢𝘯𝘥 𝘭𝘦𝘢𝘳𝘯 𝘵𝘩𝘳𝘦𝘦 𝘴𝘵𝘢𝘵𝘦𝘮𝘦𝘯𝘵 𝘮𝘰𝘥𝘦𝘭𝘪𝘯𝘨 𝘴𝘵𝘦𝘱-𝘣𝘺-𝘴𝘵𝘦𝘱, 𝘐 𝘤𝘢𝘯 𝘵𝘦𝘢𝘤𝘩 𝘺𝘰𝘶 𝘪𝘯 𝘫𝘶𝘴𝘵 𝘢 𝘧𝘦𝘸 𝘩𝘰𝘶𝘳𝘴 👉 https://bit.ly/FMECourses

I've been passionate about Private Equity for as long as I can remember.

But it has a 𝗱𝗮𝗿𝗸 𝘀𝗶𝗱𝗲 too...


🗣️ 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻

It begins and ends with a breakdown in communication.

Fuel on the fire? Different personalities, styles, and compatibility.

It might sound cliché, but partnering in private equity isn’t all that different from a romantic relationship.

All fun and games early on, but comes down to compatibility long term.

The dinner/drinks/onsite stage is exciting.

Everyone's talking about growth and upside.

But reality often plays out differently.


❌ 𝟭𝘀𝘁 𝗠𝗶𝘀𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴: 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗶𝘀 𝗡𝗼 𝗝𝗼𝗸𝗲

People at the "OpCo" (company being acquired) often feel like they’re working two jobs:

   1) Their normal role

   2) Responding to diligence requests from the PE firm

The stressor is obvious -- longer hours at work and less time at home.

It’s easy for doubt to creep in early:

“Is this what it’s going to be like 𝘦𝘷𝘦𝘳𝘺 𝘥𝘢𝘺?”


❌ 𝟮𝗻𝗱 𝗠𝗶𝘀𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴: 𝗧𝗵𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗶𝘀 𝗜𝗻𝘁𝗲𝗻𝘀𝗲

In middle-market deals, there’s often an "understanding gap" between the OpCo finance team and the PE firm.

The OpCo knows the “old way,” but now they’re faced with a new capital structure.

Once you start talking about LBOs, revolvers, equity contributions, and so on -- it can be overwhelming.


❌ 𝗣𝗘 𝗙𝗿𝘂𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻: 𝗧𝗵𝗲 𝗧𝗲𝗮𝗺 𝗜𝘀𝗻’𝘁 𝗔𝘀 𝗦𝘁𝗿𝗼𝗻𝗴 𝗔𝘀 𝗘𝘅𝗽𝗲𝗰𝘁𝗲𝗱

The PE firm starts questioning post-close roles and even considers hiring new people.

Contrary to popular opinion, PE 𝙙𝙤𝙚𝙨𝙣'𝙩 want to fire anyone.

But in reality -- the acquisition is an investment -- and it needs a team that can deliver returns to LPs.


❌ 𝗧𝗲𝗿𝗺𝘀 𝗮𝗻𝗱 𝗗𝗲𝗮𝗹 𝗙𝗮𝘁𝗶𝗴𝘂𝗲

This is why a detailed LOI is so important.

Disagreements over structure can lead to long legal calls that go late into the night.

By the time the deal finally closes, both sides are exhausted.

And now they’re supposed to 𝘤𝘦𝘭𝘦𝘣𝘳𝘢𝘵𝘦?


📆 𝗧𝗵𝗲 𝗘𝗮𝗿𝗹𝘆 𝗗𝗮𝘆𝘀

This is where compatibility either kicks in -- or it doesn’t.

Things can improve… or:

   - teams start blaming each other

   - new hires are made, others leave

   - systems change

   - culture shifts

   - add-ons are made with little integration

And the OpCo feels it most -- because the PE firm is in charge now.


🔎 𝗭𝗼𝗼𝗺𝗶𝗻𝗴 𝗢𝘂𝘁

PE gets painted as the villain, but both sides have to agree to the deal.

In my experience, it always comes back to one thing: 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 🤝.


👀 𝗪𝗵𝗮𝘁 𝗛𝗮𝘃𝗲 𝗜 𝗦𝗲𝗲𝗻?

If 0 is toxic and 10 is sunshine & rainbows -- most deals I’ve seen are a 6 or 7.

A successful outcome, with a few bumps and bruises along the way.


p.s. if you're interested in PE, I can help you:

📚 interview guide 👉 https://lnkd.in/ewh-x6_k 

📽️ learn LBO modeling 👉 https://bit.ly/FMECourses

Which part of a three statement model trips you up the most?
Full quiz here 👉 https://lnkd.in/eccYpT-R

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