"An Independent Sponsor Can Be My Favorite Kind of Buyer"

"An Independent Sponsor Can Be My Favorite Kind of Buyer"

Dara Shareef is an executive at Benchmark International, a global lower-middle market M&A brokerage. Dara is an avid speaker on panels and podcasts, and he brings a nuanced perspective on independent sponsors as a buyer group, tactics to win deals, and best-in-class process management post-LOI. He is a believer in content marketing as a way for dealmakers to build trust, transparency, and inbounds.

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Minds Capital is an equity fund for independent sponsors. We invest $1-3m of equity per platform and average one commitment per month.

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Cold calls and emails used to be more effective before. Today, Dara sees podcasts, panels, and industry conferences as better ways to build familiarity & knowledge with an industry and connections with business owners. Industry events are especially valuable because a sponsor can stand out as the only deal professional in the room. The aim of content marketing and a public presence is to deliver value (before asking for anything in return) and stay top-of-Minds until the timing is right.

Dara’s favorite buyer group are independent sponsors who are reformed PE investors, who saw too many strong deals passed over because the deal was too small, too hairy, or what have you. At the other end are sponsors who hide the lack of committed capital and operate analogous to buy-side brokers. The lack of capital isn't a deal killer, but the lack of transparency can definitely be so.

To win a deal, Dara wants to see more than capital access. Sponsors need to show operational excellence through a track record or a clear plan, then bring some form of jet fuel, whether that is strategy, relationships, functional expertise or stronger marketing. Where there is a gap, for instance for a first-time sponsor, the answer is to find a partner who fills it.

Once the LOI is signed, milestones matter. A QoE report signals conviction because the buyer is putting real money at risk. For the buyer, the goal is to maintain momentum and avoid giving the seller an out (due to missed deadlines).

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