In this conversation, Steve Wiesner, an entrepreneur with a 20-year background in investment banking and private equity, shares his transition to business ownership. He emphasizes the risks associated with private equity roll-ups and the necessity of smart acquisitions for growth. Steve discusses key mindset shifts required for success in entrepreneurship and highlights the importance of operational execution in managing acquisitions. His experiences shed light on navigating the complexities of business investments and the evolution of corporate finance.
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insights INSIGHT
Deal Sizes in the Mid-90s
In the mid-90s, investment banking often involved companies doing $10-25 million in EBITDA.
These companies, while substantial, weren't always multi-billion dollar giants as some might assume.
insights INSIGHT
Private Equity Structure and Returns
Private equity structure involves raising funds from LPs, investing over a set period (e.g., 5-7 years), and aiming for high returns (e.g., 45% IRR historically).
Leverage and multiple arbitrage were key return drivers, particularly in less efficient markets.
insights INSIGHT
Shifting Focus to Growth
Private equity's reliance on leverage and multiple arbitrage is decreasing due to high valuations and rising interest rates.
Growth through investment and operational improvements is becoming crucial for returns.
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Join me, Nik (https://x.com/CoFoundersNik), as I talk with Steve Wiesner (https://x.com/SteveWiesnerSMB), who spent 20 years in investment banking and private equity before diving headfirst into entrepreneurship. Now the owner of Watershed Associates, a top negotiations training company, Steve shares his journey from high-stakes finance to the challenges and rewards of running his own business. We cover smart acquisitions, why private equity roll-ups can be risky, and the mindset shifts required to succeed as an entrepreneur. Steve's experience in finance, coupled with his insights into buying and scaling businesses, offers a wealth of knowledge for anyone considering their first entrepreneurial leap.
Questions this Episode Answers:
How do you transition from investment banking to starting your own business?
What are the key risks involved in private equity roll-ups?
How can acquisitions be used effectively to grow a business?
What mindset shifts are needed for those leaving corporate finance for entrepreneurship?
What lessons can be learned from working with Fortune 100 companies?
Enjoy the conversation! __________________________
Love it or hate it, I'd love your feedback. Please fill out this brief survey with your opinion or send me an email at Nik@cofounders.com with your thoughts. __________________________
00:00 Highlights & Introduction 02:48 From Investment Banking to Entrepreneurship 06:09 Understanding Private Equity and Its Structure 08:57 The Role of Leverage in Private Equity 11:51 Transitioning to Fundless Sponsorship 15:13 The Journey into Negotiation Training 18:04 Exploring the Roll-Up Strategy in Private Equity 20:58 Challenges and Risks of Roll-Ups 23:49 Integration Challenges in Acquisitions 27:05 The Importance of a Solid Playbook 29:57 Market Dynamics and Fragmentation 32:48 Recurring Revenue and Its Significance 36:07 Final Thoughts on Entrepreneurship and Growth