Elliot Vickerstaff

Private Equity & Entrepreneurship

[Elliot Vickerstaff @vickerstaff_e]

@fivosaresti Agents

[Elliot Vickerstaff @vickerstaff_e]

@paulswaney3 INTEGRATION

[Elliot Vickerstaff @vickerstaff_e]

@thisguyknowsai Send

[Elliot Vickerstaff @vickerstaff_e]

@jn_jackk Credits

[Elliot Vickerstaff @vickerstaff_e]

@itsedaxe 85

[PrivateEquityGuy (Mikk Markus) @PrivatEquityGuy]

There's an interview with a husband and wife duo in their 30s who acquired over 30 companies and created a $600 million enterprise value. Less than 3k views.

Meanwhile, a gentleman grilling a TOMAHAWK STEAK with over 297,000 views.

Damn.

[The Icahnist @TheIcahnist]

The Private Equity Titan of Britain.

Why not buy boring assets and turn them into gold?

Guy Hands turned rusty British trains into £600mm.

Here's his playbook:⬇️

[Will Schryver @Will_Schryver]

SMB owners contemplating a sale to private equity need to understand the importance of Net Working Capital (NWC) and what is expected to be delivered as closing.

In a cash-free, debt-free transaction, NWC is your current assets (excluding cash) minus your current liabilities (excluding interest bearing liabilities).

To keep it simple, the bulk of this will be AR + Inventory for current assets minus AP as current liabilities.

Why is cash and debt excluded? In a cash-free, debt-free transaction, the cash is swept to the seller at closing and any debt on the balance sheet is also the responsibility of the seller to pay off.

Back to NWC.

Private equity expects the business to deliver a certain amount of NWC at close. We call this the NWC target, or “peg”.

Typically, this is a trailing twelve month (TTM) average of NWC but certain situations warrant using a shorter time horizon.

Why does PE require you to deliver a certain amount of NWC? They don’t want to step into a situation where the seller has stopped paying their bills (AP), collected as much as possible on AR, and drained Inventory without replenishing. They will be upside down on NWC day 1.

Here’s an example of how it works:
TTM Avg. NWC
$0.8million AR
$1.0 million Inventory
$0.3 million AP
= $1.5 million NWC Peg

The peg is set at $1.5m to be delivered at closing.

If NWC delivered is actually $2.0m, the Buyer would owe Seller $0.5m after a true-up period since more NWC was delivered above the peg.

If NWC delivered is actually $1.0m, the Seller would owe Buyer $0.5m after a true-up period since less NWC was delivered below the peg.

NWC isn’t meant to be a value grab from either side. It’s meant to be fair to both Buyer and Seller.

I always say think of when you buy a new vehicle from a dealership and you expect the vehicle to come with a full tank of gas. The vehicle is the SMB private equity is buying and NWC is the gas in the tank.

[Elliot Vickerstaff @vickerstaff_e]

@AalayRasool_ @framer Autrix

[Aalay Rasool @AalayRasool_]

Alright, it’s finally here!

Meet Aurix – a premium @framer SaaS template built to scale SaaS businesses.

For the next 48 hours, I’m giving it away FREE!

Just like, repost, and comment "Aurix" below, and I’ll DM you the link.

(Make sure you’re following so I can reach you)

[Elliot Vickerstaff @vickerstaff_e]

@janvmusscher template

[Elliot Vickerstaff @vickerstaff_e]

@SergeGatari AI

[Elliot Vickerstaff @vickerstaff_e]

@benkellyone Portfolio

[Elliot Vickerstaff @vickerstaff_e]

@CharlieImperium Blueprint

[Elliot Vickerstaff @vickerstaff_e]

@Jus3G Houston

[Elliot Vickerstaff @vickerstaff_e]

@JordanLeeGrowth framework

[Elliot Vickerstaff @vickerstaff_e]

@SergeGatari B&R

[serge gatari @SergeGatari]

“No-code AI tools are going to make it incredibly cheap to copy any existing business in 2024” -Chamath Palihapitiya

I went from 30k/m to 600k/m with B&R -the only way to avoid getting copied

Just made a 13-hour biz masterclass on this

RT, Like and Comment “B&R” to get access

[Boring_Business @BoringBiz_]

Have been saying this for a while.

Private equity will be democratized over the next decade.

The industry secrets are no longer secrets.

They are now accessible to the everyday person thanks to online resources. Bullish on micro private equity

[Elliot Vickerstaff @vickerstaff_e]

@kevinsozanski AI