Permanent Podcast: Real Talk About Private Equity and Buying, Selling, and Operating Small Businesses The Process: From First Call to Close (Do Diligence Confidently Ep. 3)
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Sep 14, 2023 This podcast episode explores the process of entering into a partnership with Permanent Equity, from the introductory call to closing a deal. The hosts discuss the importance of diligence and demystify the investment process. They also cover topics such as making an offer, due diligence, defining key terms, and the step-by-step process from the first call to final close.
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Model Fit and Growth Alignment
- Discuss both Permanent Equity’s stewardship model and its specific application to the business.
- Ensure alignment between Permanent Equity's growth approach, focused on long-term structural health, and the seller's growth expectations.
Site Visit Purpose
- Conduct site visits to verify information, build relationships, and assess factory conditions (avoid black mold and waste issues).
- Use site visits for two-way interaction and to meet the management team, fostering a strong foundation for the long-term partnership.
Letter of Intent (LOI)
- After the site visit, determine commitment and enter an exclusivity period with an LOI.
- This LOI signifies commitment, outlines terms, and restricts the seller from engaging with other potential buyers.