mini-Steve Schwarzman and 30%+ IRR

Just a quick note before we jump in…

Secret to success of Nordic PE firms and family offices:

1. Rain/snow/cloudy 10 months out of 12 a year (what do you do other than work?)

2. It must be "piece of mind" (just look at the office of one of the big players)

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The more I listen, read and talk to the 0.0001% of entrepreneurs and investors, the more evidence I find that the most successful folks in their fields are clear thinkers and great communicators.

They all are direct and to the point.

No wonder they outsmart their competitors.

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Does a day at the beach translate into a better IRR and MOIC in the long run?

I believe so.

Here are 9 ways it will make you a better private equity investor and business operator:

1. Above all, you need days like this. Way more than you imagine, and much more than you already do.

2. Your family needs you. They love you and want to spend more time with you. They already can't wait for the next time you come to the beach with them.

3. Your wife and kids don't care about IRR, MOIC or any other metrics. They care even less if you're a mini-Steve Schwarzman or the next Henry Kravis.

4. The more beach days you do – the less likely you are to burn out – the longer you can stay in the game so you can make bigger and better investments & achieve greater returns.

5. You'll enjoy your next days at the office a lot more when you come back from the beach. Ying Yang. A different environment. No wonder the best private equity folks have an office in NYC but a summer and weekend house outside the city.

6. You can read a whole book while sitting on a comfortable fisherman's chair. Everyone knows what a great idea from a book can do for your investment portfolio.

7. Private equity and investing are about making decisions – sometimes you have to marinate a decision for 24-72 hours. Lying on the beach with the kids and playing without thinking about it all is a great way to spend those 72 hours.

8. Having one investment idea while walking on the beach can save you a lifetime of hard work. More true than ever. When talking to investors, they often say there is one or two investments they wish they had made or skipped. Spending time at the beach is a great place to think about these investment decisions.

9. You can finally take your shirt off to see your belly that hasn't seen the sun in months or years… Which hopefully will motivate you to get back to the gym & walk 10,000 steps daily which will once again improve your health and energy levels… Which will help you be a better investor and decision maker and play the game longer.

To sum up, a day at the beach is VERY good for you, you should do it more and more often.

• Better IRR

• Higher MOIC

• Good for health

• More time to think

• Happy wife and kids

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You want to work with people who are very high performers.

The ones who go into detail even if you didn't ask for it.

Those who leave it all on the field.

The ones who, if you ask them for a two-slide presentation, they come back and give you a five-slide presentation.

Those who go above and beyond.

They are rare, but you have to find them.

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A gentleman who has been in PE for 29 years and today runs an $18b aum fund.

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Sales 101:

1. Follow up like a madman (be smart when doing it)

2. Don't forget enthusiasm

As a result: In the long run, you WIN more than you lose.

You're competing with people who ONLY use email or call while sitting at a compatible desk, or don't follow up enough.

But when you walk, have high energy, provide value and you're enthusiastic about what you're selling or the problem you're solving – the person on the other side will feel it.

I've seen this so many times when selling payment services to SMBs... I follow up every two weeks or once a month (for years if needed).

I've already told them I'm not going anywhere... might be very intense for some people, but I mean it.

Again, you might lose some of them, but you'll win more in the long run.

3 and a half years later, we are still in business, still growing. I believe it works.

Sure, once in a while, some customers will say you're being too intense, but then again, you can always cover the objection upfront by starting the conversation with some good news about the market or a case study or reference you have from their competitor (someone who already uses your product/service).

People love to hear good news and what competitors are doing.

All this is very basic stuff, but if done properly and long enough, it will give the desired result.

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The game of small business acquisition gets so much easier when you do it slowly…

And with the right people.

The people part is critical, as someone said, “The longer someone takes to join you, the longer they are going to be with you.”

Buying and building profitable companies is something you can do for decades, for 20 to 40 years…

IF you stay sharp and healthy.

That said…

How has been the week in the small private equity world?

Consumer loan company.

A little story about instant gratification and fundraising.

There’s an investor I’ve talked to/emailed sub 15 times in the last 18 months.

• Monthly reports 

• Follow up calls

• General how are you conversations mixed with ‘when will you invest in our bonds’

Today, as I was enjoying my midday iced coffee… my phone started ringing.

He called me, “Mikk, the moment is now, send me the contract, let’s get started with the first investment.”

That means 18 months of work for all this….

I’m sure this will be a long and successful LP GP partnership with him (It’s a small ticket, but you gotta start from somewhere).

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And what I feel the most excited about when looking towards the future is that I don't mind doing “the work” for even longer periods without seeing any “results”.

At least that’s how I view fundraising, PE and investing.

June numbers coming soon, but this was May:

Take care,

Mikk Markus / PrivatEquityGuy

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This week’s podcast:

My conversation with Daniel Priestley about how to become a "key person of influence" in the world of private equity, investing or small business acquisition.

Being known in your own little world makes three things possible:

• Finding better deals

• Attract more capital on better terms

• Have more talent wanting to partner with you and your companies

Daniel manages a portfolio of internet companies and has a talented team of 150 people.

Links to Spotify, Apple Podcast and YouTube.

Thanks a lot for following the journey.