M&A lawyer for buyers and sellers of businesses @Albrecht_law for Indy Sponsors PE•Searchers; X - GibsonDunn @GeorgetownLaw @JohnsHopkins @IDF Special Forces
It is time for an introduction. I am an M&A Lawyer at @Albrecht_Law. I represent PE Groups, Independent Sponsors, and Searchers buying and selling businesses.
It has been a windy road. Here is my story:
Born in L.A., one of my first memories were of the curfews from riots in the early 1990s. We moved to inner city Milwaukee seeking a lower cost of living. I went to an Orthodox Jewish day school and public high school. The only thing that kept me in high school for 3 years was skateboarding and wrestling.
Then, 9-11. I committed to join the military to fight people who would kill American civilians sitting in their offices.
I learned about my German family who were wealthy assimilated Germans - all murdered in the Holocaust. My grandmother was the sole survivor. She escaped to Israel in 1939.
I dropped out of high school to join the Israeli Special Forces, first joining the paratroopers, then Unit 217 (Duvdevan), then onto another SOF unit.
After my service, I returned to the States. I raised angel funding, started an armed security company focusing on high-risk environments. I marketed to those who needed the most skilled security detail. I grew too fast and ran it into the ground. Investors forced an asset sale. I felt like I got screwed and attributed it to my lack of formal education.
I could work hard but had no formal education. I went to community college, first taking non-credit classes. I worked nights at a mental hospital and taught Krav Maga and defensive tactics to SWAT officers during the day to pay for school. It took me 2.5 years to get a 2-year AA degree.
I loved school and thirsted for knowledge, but I was a ship in a storm without an anchor. I met my wife and she was the anchor. When I was with her I could breathe more deeply and the fire in my belly burned at a simmer. She believed in me so absolutely that I started believing in myself. She loved me with no strings attached.
I transferred to Johns Hopkins University where I graduated top of my class. I focused on business, private equity, VC, and M&A. I was shocked that people complained when we got to sit at a desk and learn.
Studying for the LSATs my first son was born. The memories of financial worry lines on my dad's face drove me through late-night study sessions. I felt my key to financial freedom was getting into a good law school, so I dedicated myself to studying. I studied voraciously and I did well. On to Georgetown Law with a Deans Academic Scholarship covering most of my tuition. I took all the corporate law classes. I loved M&A and private equity.
My daughter was born. I tried to be there more for my family, but I remembered my parents taking items off at the grocery store checkout, so I dedicated myself to getting a BigLaw job. I summered at DLA Piper and was there for a year. I worked on great deals like Sprint-T-Mobile merger and Sole Source Capital's inaugural deals. I wanted more PE M&A.
I lateralled to Gibson Dunn. Tons of top-notch M&A work. Truly elite M&A practitioners. They went hard and I went hard. It was everything I wanted. I worked with incredible PE groups, like Platinum Equity, KKR, MidOcean, Arlington Capital, Liberty Hall, etc. I worked on splashy acquisitions. My deals were in the WSJ and I thought I was happy.
But, whenever I was not busy, 20-year-old memories of hearing my parents argue over their budget deficit as I was trying to sleep crept back into my head.
I prioritized work over everything. My home life was falling apart.
My third child, a little redhead was born. I was succeeding professionally. I bought the Teslas I always wanted and paid for Jewish private school in cash. Still, when I lay in bed at night, I heard the wolves at the door and a little voice inside my head saying, what if you lose all of this tomorrow?
If only I made BigLaw partner I could rest.
As I achieved my professional goals, my wife was drifting away and I felt like a stranger in my home.
I started struggling to find a better way. I wrote my thoughts on another platform (the more professional one). In a couple of years, my community had grown to over 50,000.
In May 2023, I sat with my wife and reevaluated everything. I interviewed at other BigLaw firms and was offered partnership. But, it did not feel like the success I thought it would. I loved M&A, but BigLaw partnership was not the life we wanted.
My family and I weighed the options. I told them our finances would be up and down based on my ability to bring in clients. I told them I would work late nights, but be in control of my own time.
We would determine our own destiny for our own family.
I told them I would work hard, but never again miss a school play or wrestling tournament.
I told them we would build something our family would be proud of.
My wife said to the kids, one day, you will grow up and you will know, Daddy bet on himself.
We were all in.
I handed back my key fob at my fancy high-rise office in D.C. and walked out the door for the last time ready for this entrepreneurial journey of building an M&A Law practice.
Since launching Albrecht Law, we have been representing incredible people buying and selling businesses. We have made people millions of dollars through our tax structuring department led by the incredible tax genius, @JoshuaASiegel, and represent our clients in all of their business's legal needs.
I get to represent real people and help them succeed in their business. I am building real relationships with clients I will work with for the next 30 years.
I have been more successful than I dreamed and I am more deeply connected with my family than ever.
Every once in a while as I put my head on my pillow, I hear the wolves growling, but, when I put my arm around my wife, and think of my children, the sounds of the wolves are drowned out by all the blessings in my life.
The absolute greatest thing about being a Dad is crafting the type of childhood I wish I had. Then seeing the world through their eyes and what an absolutely beautiful, exciting, and brilliant world we get to live in. God is good.
>PE group gives great offer to my Seller, Client.
>Pitches big Rollover (Second Bite, blah, blah).
>I ask for details on Rollover.
>Rollover is actually Common Units.
>I ask for Parent LLC Agreement.
>Rollover is actually profits interest.
>I review waterfall and participation threshold.
>Rollover Units starts participating after the company has tripled in value at the bottom of the waterfall, then, only partially participates, until value is higher (and more senior equity can be raised on top).
>Seller becomes less excited about the Second Bite will leave him hungry.
>>We accept a different LOI.
In independent sponsor deals or a new PE platform, it is actually fairly common to roll into pref (more in Indy Sponsor than PE), but more common to roll into Common that participates closely after Pref. Lastly, sometimes the "Rollover" is a grant of incentive units (which is not Rollover at all).
But, even when rolling into Common/Pref, there are tons of tricks that devalue the equity (i.e., waterfall subordination, offsets for indemnities, forfeiture for termination of employment, company call option, ability to create new senior units).
Most of these are legitimate tools (and I use them when rep'ing buyers), but good counsel should communicate to Sellers the actual value of their "Rollover"
>PE group gives great offer to my Seller, Client.
>Pitches big Rollover (Second Bite, blah, blah).
>I ask for details on Rollover.
>Rollover is actually Common Units.
>I ask for Parent LLC Agreement.
>Rollover is actually profits interest.
>I review waterfall and participation threshold.
>Rollover Units starts participating after the company has tripled in value at the bottom of the waterfall, then, only partially participates, until value is higher (and more senior equity can be raised on top).
>Seller becomes less excited about the Second Bite will leave him hungry.
>>We accept a different LOI.
In independent sponsor deals or a PE new platform, it is actually fairly common to roll into pref (more in Indy Sponsor than PE), but more common to roll into common that participates closely after Pref, and sometimes a grant of incentive units (which is not rollover at all).
But, even rolling into common/pref, there are tons of tricks that devalue the equity (i.e., waterfall subordination, offsets for indemnities, forfeiture for termination of employment, company call option, ability to create new senior units)
Got on an issues list call with opposing counsel. He started with a little speech about having no flexibility, take it or leave it; this call will be a waste of time, but go ahead.
30 minutes later, we ended up finding great solutions on everything and scheduling lunch.
Buyers often receive pressure from Sellers to prove they have debt funding to do the deal. Often the debt is not committed until late in the process.
You may be tempted to do this, don't -->
@RobertMSterling@RoKhanna Agree with everything you say, Robert, and also, agree with this. Try going to any other country with the explicit purpose of anarchy against that government and see what happens.