M&A Sellers: How to Phone a Private Equity Firm - dummies

M&A Sellers: How to Phone a Private Equity Firm

By Bill Snow

Speaking with the right person seems like a basic tenet of making an M&A sales call, but you’d be surprised how many people simply (and often nervously) plow through their script to whoever first picks up the phone. Bad idea; you just waste time.

Finding the right person to speak with at a private equity (PE) firm isn’t difficult. Anyone will take your call. Despite managing hundreds of millions of dollars or even billions of dollars in capital, PE firms are often small (in terms of staffers), and everyone at a PE firm knows why he’s there: to buy companies.

You should do a little bit of homework prior to calling a PE firm. Look at the website, which often lists the firm’s portfolio companies and/or its areas of interest, sometimes along with the specific partner who handles a specific area. If you can determine the correct person, call that person. If you’re not sure, simply dial the main number at the PE firm and say

Hi, my name is [your name]; I have company for sale. I’m not sure who to talk to; can you help me?

Don’t delve into your spiel right away. Most people have a limited attention span; the longer you speak, the less they listen.

The person on the other end will almost certainly be ready to help you and will ask a simple question:

Tell me about the company.

Here’s where you need to be concise and to the point, which is why having a script with some talking points is important. The main facts you want to convey at this time are product/service, customer of that product/service, revenues, and earnings before interest, taxes, depreciation, and amortization (EBITDA). That’s all an employee of a PE firm needs to be able to route you to the correct person.

Don’t go into hyperbolic hyper-drive when making calls! Some people, especially beginners, tend to gin up their company and attempt to add a mega sense of urgency to the call. That just makes you sound like a snake oil salesman. Keep your pitch objective. State the facts without offering subjective opinions (such as “This is the greatest company! You better act fast!”).