Launching Independent Sponsor
Sector
Private Equity
Title
Managing Director
Location
USA
The Situation
Despite being invited into the partnership, the client was unhappy with the terms in which he would need to buy into the management company and the go-forward arrangement with retiring partners. He contacted Charlie to discuss alternatives to becoming a Partner, particularly launching an independent sponsor alongside his close friends.
The Process
Tapping into his own experience launching an independent sponsor, Charlie discussed extensively the pros and cons associated with going independent. Charlie flagged the many risks that the client would face and offered detailed solutions on how to overcome them. Examples include how to secure funding for deals, how to manage the back-office functions when still in start-up mode, and which advisors to utilize.
The Result
The client made a fully-informed decision to reject the partnership promotion and launch his own firm. He is currently serving his non-compete period while he prepares for the official launch.