The Merchants of Menace
The names may change, but the (unwanted) pitches stay the same.
An unwanted constant in my life is weekly unsolicited queries, like this:
Hey Robert,
With just one signature, I could wire you $10,000,000 if you were willing to sell your company.
I sent you an email Wednesday explaining that we have set aside $100,000,000 to buy electrical companies.
We’ve already bought five companies from this fund and we expect to spend the entire $100,000,000 by the end of 2024.
To find out how much your company is worth and receive an offer of $10 million or more before our fund runs out, please book a call with the link provided below.
Best,
Chad
So attentive, that Chad. Except for the “Hey” part. And the “electrical companies” part. Could be about us; could just as easily describe someone who installs conduit and junction boxes in houses. It’s doubtful the guys with the call lists and spreadsheets and quotas know the difference. Or even care.
One week later, in comes this:
Robert,
My name is Dylan, and I am looking to acquire an exceptional company from a transitioning owner. I came across your firm as I was researching the PCBA testing space in California and was impressed with the business you’ve built. As you look to the future – have you thought about what’s next for you, and for your company?
It takes years of dedication to build a company and take care of your employees and their families. I’ve positioned myself to protect your hard work and legacy for years to come. Do you have 15 minutes this week to discuss your company’s next phase of growth?
Best,
Dylan
P.S. To be respectful of your time, I am looking to invest in a business with at least $1.5 million in pretax profit. I am also considering smaller businesses that could quickly grow to that scale. Just send me a quick “no thanks” so I don’t send a follow-up note.
“Transitioning owner.” Sounds disturbingly like a dead person? Maybe someone moving to a higher level of consciousness in the “PCBA testing space?” What are they teaching kids in school these days?
Then there’s that tiresome term “scale.” Techie/libertarian cruising altitude-nirvana mashup. Hard to define, but those who know (they’re special) know it when they reach it. All cares fade away to insignificance, as net worth makes all things whole, and one never has to apologize.
Extra points for not using “Hey” in the salutation. Nice to know he’s done his homework and concluded we’re exceptional.
Then there’s this:
Robert,
I am a mergers and acquisitions facilitator at Obnoxious Advisors LLC, and I focus on the manufacturing industry.
I am an expert at matching family-owned businesses with strategic financial partners to either grow or sell their business. Our company specializes in experts who use only the first-person singular.
After reviewing publicly available data about your company, I believe it is a good fit for an M&A transaction. I have close relationships with well-funded and active buyers in the industry. They are looking for companies that generate at least $500,000 in EBITDA, where the owner is willing to stay for at least a transition period (one to two years), or for the long run (five to seven years). We favor owners with single-syllable first names: I trust their evaluations; they are my kind.
Under the right terms and at the right price, I hope you would entertain a sale of your company?
Can we schedule a discovery call early next week?
I await your expected response, as the world revolves around us.
Chip (I/me/mine)
Vowell Partners Ltd.
This one is laser-focused (as only a person fond of the pronoun “I” could be) on the manufacturing industry, singular. Certainly not focused on grammar? (sic)
Some adopt the disarming, faux-familiarization approach:
Hi Rob,
This is Evan from Narcissistic Capital. I just left you a voicemail, and I wanted to provide some context as to the purpose of the call.
I am working closely with my colleague Brad Sheepskin, on behalf of a client of ours active in the NDT space. We are looking for a company that we can use as a platform to grow and scale.
Your company is a top priority for us as our client has specifically asked to connect with you. We would love to discuss in more detail and answer any questions you have.
Let us know a few days/times that work for a quick conversation, and we will send over a calendar invite with a meeting link.
Looking forward to speaking with you.
Kind regards,
Evan Birdsong
Just the kind of guy you’d want to cut a deal with over a few beers in a sports bar. Or in the vacuum of NDT space, where no one can hear you negotiate. He does provide context, free of charge. What would life be without context? Just growing and scaling, I guess.
Or this:
Hi there, Robert,
Have you been thinking about selling your company?
Are you a baby boomer ready to move on?
Asking because I’m personally looking to buy a business where I can utilize my years of marketing experience to take your good, solid, well-run company to the next level.
(FYI, I am NOT a business broker; this purchase is for me.)
IF:
- the business isn’t dependent on just you (meaning you’ve got a good team of people that can run it w/o you)
- sales are between $1 million to $10 million
- you’re the type of entrepreneur that cares about their employees, customers & suppliers
- you haven’t listed your business with anyone
And IF my questions have hit the mark, we should have a conversation.
Interested in a quick call?
Regards,
Nick
Gatsby Capital
Dearest Nick,
Thank you for your good, solid, well-run sales pitch. Yes, you’ll be relieved to know I am thinking, although selling my company is not foremost in my thoughts. Yes, I am a Baby Boomer, ready to move on (from your appeal). As we have already arrived at the next level (without benefit of your years of marketing experience), we’ll suffer through the privations of what might have been, had we met and hit the mark with you earlier. Such is life. Parting is such sweet, etc., etc.
Patterns emerge: Ignorance, “space,” or “graduation project.” Each approach falls into one of these three categories.
First: ignorance.
Chad, in the first letter, indicates he has $100 million on hand to buy “electrical companies.”
As noted, he confuses electronics with electricians. The first write code; the latter meet code.
To them, it’s just another business, and ignorance of fine distinctions is bliss. As long as it generates $1.5 million in annual EBITDA.
Then there’s “space,” as in, “I was researching the PCBA testing space in California ….”
The testing space: the Final Frontier. Expand your mind, chemically or exponentially.
Our fourth friend Evan professes to represent a client “active in the NDT space.”
What does “active” mean?
Burglars are active in the household space. Embezzlers are active in the financial space. Astronauts are active in the Space space. Politicians and marketing geniuses are active in the vapid space.
What’s in that space for me?
Last, the graduation project. In our final example, Nick appears to reprise his master’s thesis in business school. He seems prepared to deploy family money in a quest to make something of himself beyond video gaming, justifying his parents’ eye-watering tuition expenditure, and confirm if the gibberish on the white board in the lecture hall actually has real-world validity. The theory needs testing, and Junior needs a job. Because in theory, there is no difference between theory and practice. In practice, there is. Hence, we’re the Lab Rat, and Junior avoids delinquency, on our time. You’re welcome, parents.
Five years of weekly appeals to my greed lead me to risk some observations: 1) The players change, but the script is the same; 2) the players themselves are dilettantes, often with little to no operating or technical knowledge of our business or industry; and 3) it’s a repackaging process, in which the acquirer hopes to bundle enough assets to make the bundle yet again attractive to the next sucker, er, buyer. To the very few who are lucky go the spoils and a placid retirement. To the rest ….
The paradox is that many who drive this process, who have never organized an entrepreneurial endeavor in their lives, are called Masters of Business Administration. The thought turns the stomach.
Two of my best industry friends responded positively to a similar enticement several years ago. They weren’t looking for a takeover relationship (I refuse to say “exit strategy”), but there it was. These things sometimes materialize when you least expect them. The offer was too good to pass up, so they gulped hard and took it, signed the one-year contract, hoping the omniscient acquirers would come through according to the promises they made during cocktails and courtship. Promises to make capex investments; add staff; add marketing; scale up the business, while preserving the infrastructure, talent and tribal knowhow my friends shed blood, sweat, and passion for over 28 intense years of building their pride and joy.
The bubble burst fast. Two years later, underinvestment, poor operating skills, and inattentive and incompetent management have done their work. Market share is down, customers are leaving. What remains of their legacy is memories.
It’s our world.
And they don’t care.
This is dedicated to Regina, my Editor from Eternity. Today, always, and forever. I owe everything I am to you: I’m a better man for knowing and loving you. I hope, with your guidance and approval never far away, to do something good with myself, and for others, in your honor. My best and my love, always.
Robert Boguski is president of Datest Corp. (datest.com); rboguski@datest.com. His column runs bimonthly.
