M&A Talk: #1 Podcast on Selling a Business

For New Sellers: A Behind-the-Scenes Look at What a PE Firm Looks for in a B2B Company

Jul 15, 2024

Mahmoud Hmouz, an M&A professional, shares insights on what PE firms look for in B2B acquisitions. Topics include success stories, key metrics like growth and profitability, common seller mistakes, and the importance of transparency in deal-making.

50:23

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Episode guests

Mahmoud Hmouz

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Episode notes

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Quick takeaways

Private equity firms focus on growth and operational optimization in B2B software investments.

Entrepreneurs should prioritize transparency, honesty, and building trust with investors for successful deals.

Deep dives

Investment Strategy and Approach at Turn River Capital

Turn River Capital, a private equity firm specializing in B2B software companies, focuses on growing investments over time before exiting. The firm employs 70 full-time employees, with 25 investors and 45 specialized operators with an average of 13 years of experience in B2B software companies. With a focus on growth engineering and operational optimization, Turn River acts more like a software company than a traditional private equity firm.

Intro

2min

Transitioning from Engineering to Corporate Development in the M&A Industry

11min

Exploring Deal Sizes, Revenue Multiples, and Challenges in Acquiring Companies

3min

Characteristics of a Good Company for Private Equity Investment

14min

Common Mistakes Sellers Make When Talking to Professional Investors

3min

Private Equity Firm's Assessment and Investor Approach Strategies

14min

Strategic Deal-making and Investor Matching in the B2B Sector

3min

View the complete show notes for this episode.

What is it like to source M&A deals with a focus on B2B software technology companies? Mahmoud Hmouz answers this question and many more as he discusses what a PE firm looks for when sourcing companies to consider for acquisition. He offers insights into the metrics a PE firm first looks at, gives advice for entrepreneurs on preparing for a “first date” conversation with a potential investor, and the importance of being honest about what an owner wants and mapping that to what an investor has to offer.

What You’ll Learn

Success Stories: Discussion on how this PE firm impacts the companies they have acquired with examples of some of their platform and tuck-in acquisitions.
Enticing Numbers: Details on some of the key metrics private equity looks for in businesses, including growth, retention, and profitability.
Good First Impression: Tips on what common mistakes sellers make in initial conversations that can waste time or damage relationships and how to avoid them.
Growth and Evolution: The importance of experimentation, open-mindedness, and addressing inertia to continuously improve growth strategies.

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