Matt Logan’s Post

Sent over 250k emails to institutional investors last week across clients The number one question asked “What’s DPI of the previous funds?” Investors are tired of seeing 5x marks but 0 distributions Sign of the times If you’re trying to raise capital for someone this is a must ask question to determine fit

*Speaking about a deal with a banker* 🤡: “Great, we’ll send over an LOI by end of week!” 🐲: “Have they received LOIs already? Roughly where have valuations come in at so far?” Don’t be taking shots in the dark when you don’t need to. Dont bid against yourself. Make sure they’re *willing* to tell you.

Have come to realize raising capital for funds is a game of patience. It lags tremendously. Sure, the feedback from initial emails is somewhat quick but after that, it can be a week for feedback after sending the deck, then calls, due diligence, doc negotiation then funding. Institutional investors are busy. Your clients are busy, they are running multimillion dollar funds. You’re in the dark a lot. The good thing about this business is you can land a moonshot and close $10-20m with one email. But fuck, I hate slow feedback loops.

Time is apparantly our most valuable Commodity. No it isnt. Freedom is. Without Freedom your time loses its value and is eventually worth nothing at all. Freedom is your most valuable Commodity. It is the number one asset you will ever own! You must protect it at all costs. Even if it requires an extreme response. It is THAT important. Without it there is nothing else.

Whenever you get the chance to partner with another super high quality investor on a deal, do it. I’ve heard the “why split the economics” BS over and over in these circumstances. It’s almost beyond doubt that two savvy street smart heads are better than one. It just boils down to the fact that most people in finance do not understand, or truly appreciate that 50% of a big pie is better than 100% of a much smaller pie. This latter point is in fact one of the biggest drivers of the large number of PE firms in the U.S…

Private equity exits by type. IPO window still relatively quiet compared to 2021 and secondary buyouts taking up larger shares as pressure to return capital sets in Chart sourced from Moonfare

Buyers - Most banks are now wanting to see debt service coverage in the 1.25 range for the most recent year, with a filed business tax return and the TYD period. There are banks that we work with that will go down to 1.15 BUT expect Prime + 2.75%

Prospective business buyers: Do a court records search on sellers before you submit your LOI. You can save massive headache in the financing process if you realize that your seller is not above board by doing a quick Google search. I'd love to share stores but can't for client confidentiality purposes, but what I will say is that there are some sellers out there with colorful pasts that I wouldn't want to do business with, and your SBA lender will start asking questions when court case searches and lien searches come back if the seller has a colorful past