Success Story (1 Viewer)

[chet]

I had dinner with a friend--let's call him Ray--last week. 4 years ago, he was an M&A attorney and hated his job. One day he quit and told me and some other friends he was going start a private equity firm. I introduced him to another friend--David--who'd started a successful PE fund some 10 years earlier. David said Ray was incredibly naive after they'd done an introductory call.

6 months later, Ray identified his first acquisition candidate and asked if I wanted to invest. I politely declined as it wasn't the right industry, risky etc. He got the deal financed but almost bankrupted his family because he got to the closing and didn't realize he needed to prepay the legal and accounting fees. Somehow, he cobbled together the ~$300k needed to pay the lawyers and accountants and closed the deal.

3-years later, he's bought 5 other companies and has started buying out the original equity investors so he can own everything outright. His group of companies does $25-30MM in cash flow annually. I had dinner with him last week and he was sporting a $100k Patek and was looking at a $25MM plane and getting ready to build or buy a $20MM house.

From zero to hero in under 4-years. Very impressive.

 

[Nick Vermeil]

Hopefully he picked up the check.

 

[Doctor Detroit]

I thought this thread was going to be about Eminence.

 

[Rushmore]

How many hotel points has he accumulated?

 

[Bucky86]

A $100,000 watch and $20 mil house is now the definition of success? FML

 

[El Floppo]

Mr zero M&A attorney. probably was living out of his car... good for him.

 

[Thorn]

Can I be your friend?

 

[Dentist]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

 

[TheIronSheik]

I once got a $500 Christmas bonus.

 

[Donkey Derp]

I'm trying to decide if he lives above his means or is actually doing fairly well.

Your obsession with what other people earn and spend is really quite creepy.

 

[Bucky86]

I'm trying to decide if he lives above his means or is actually doing fairly well.

Your obsession with what other people earn and spend is really quite creepy.

New around here?

 

[Doctor Detroit]

Anyone that buys a watch for $100k is a tool imo. By a $5k watch and donate the rest to charity.

 

[5-ish Finkle]

I'm trying to decide if he lives above his means or is actually doing fairly well.

Your obsession with what other people earn and spend is really quite creepy.

He enjoys being pooped on, but this is what's creepy about him?

 

[TheIronSheik]

Anyone that buys a watch for $100k is a tool imo. By a $5k watch and donate the rest to charity.

If you've earned it, spend it however you want.

 

[Bucky86]

Anyone that buys a watch for $100k is a tool imo. By a $5k watch and donate the rest to charity.

Many people can afford a $5k watch. How else are you going to prove to your rich friends that you're doing really well?

 

[kentric]

I thought this thread was going to be about Eminence.

Come back in four years.

 

[The_Man]

If I were having dinner with someone, I would have no idea if his watch cost $1k, $10k, or $100k.

And if I continue to live my life right, I never will.

 

[El Floppo]

If I were having dinner with someone, I would have no idea if his watch cost $1k, $10k, or $100k.

And if I continue to live my life right, I never will.

whatta loser.

right, chet?

 

[johnnycakes]

From zero to hero in under 4-years. Very impressive.

In fairness to those who may think "anyone" could do it, he probably did not start at zero.

 

[Officer Pete Malloy]

Yes, a real "Riches to Riches" story. Warms my heart.

 

[gianmarco]

Anyone that buys a watch for $100k is a tool imo. By a $5k watch and donate the rest to charity.

Many people can afford a $5k watch. How else are you going to prove to your rich friends that you're doing really well?

Buy a $25M plane?

 

[CletiusMaximus]

Can you sum up what a private equity firm is and what it does in a paragraph or less?

Buy successful healthy companies and suck all the value out of them.

 

[wilked]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

If only there was a place one could ask such questions, say type it into a box and hit enter, and out would pop the answers. In this futuristic utopia the answers to simple questions would be right at your fingertips (literally!)

 

[chet]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

 

[chet]

From zero to hero in under 4-years. Very impressive.

In fairness to those who may think "anyone" could do it, he probably did not start at zero.

Correct although the zero part really referred to his near bankruptcy.

 

[chet]

If I were having dinner with someone, I would have no idea if his watch cost $1k, $10k, or $100k.

And if I continue to live my life right, I never will.

whatta loser.

right, chet?

Come on. I am not judging anyone. Financial success is only one metric.

 

[TheAristocrat]

Good for him. I wouldn't be sporting the 100k watch or buying $20M homes if I had that money, but to each his own. Pretty quick and cool success story.

 

[chet]

Good for him. I wouldn't be sporting the 100k watch or buying $20M homes if I had that money, but to each his own. Pretty quick and cool success story.

You're in for the plane though?

 

[TheAristocrat]

Good for him. I wouldn't be sporting the 100k watch or buying $20M homes if I had that money, but to each his own. Pretty quick and cool success story.

You're in for the plane though?

I think a plane would be necessary between my condos in 10+ cities.

 

[Dentist]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

200k to a mill, wow that's actually a lot more than i thought. I figured the range would be 80-300k.

What's the difference then between these private equity firms and like a Hedge fund, because what you describe sounds like what i've heard about hedge funds.

 

[Dentist]

I'm trying to decide if he lives above his means or is actually doing fairly well.

Your obsession with what other people earn and spend is really quite creepy.

He enjoys being pooped on, but this is what's creepy about him?

I think the lines between schtick and reality get blurred a lot on online message boards.

I have never been pooped on, or pooped on anyone else. On rare occasions I will view these types of things though.. i'll admit to that.

I am overly obsessed with what people earn and spend, that's reality.. i'll admit to having an unhealthy obsession with that.

 

[Leeroy Jenkins]

Good for him. I wouldn't be sporting the 100k watch or buying $20M homes if I had that money, but to each his own. Pretty quick and cool success story.

You're in for the plane though?

Hell yes! I am in multifamily housing and am all over the country. My firm needs a private jet for sure (and are always looking for high net worth individuals or equity funds to partner with).

 

[Brony]

He'd be a lot cooler if his aunt tried to seduce him in her husband's mansion pool house. MMM-bow-bow. chicka chicka.

 

[chet]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

200k to a mill, wow that's actually a lot more than i thought. I figured the range would be 80-300k.

What's the difference then between these private equity firms and like a Hedge fund, because what you describe sounds like what i've heard about hedge funds.

Hedge funds are largely unregulated investment companies that typically invest in publically traded securities. However, there are some hedge funds that look more similar to PE companies because they invest in illiquid debt securities.

 

[Dentist]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

200k to a mill, wow that's actually a lot more than i thought. I figured the range would be 80-300k.

What's the difference then between these private equity firms and like a Hedge fund, because what you describe sounds like what i've heard about hedge funds.

Hedge funds are largely unregulated investment companies that typically invest in publically traded securities. However, there are some hedge funds that look more similar to PE companies because they invest in illiquid debt securities.

how does one invest in these private equity firms?

I mean I can't imagine there being that many of these firms around. There's a pretty limited number of millionaire investors in the country.

 

[Maik Jeaunz]

heartwarming stories like this always make me feel like crap.

 

[Dentist]

Good for him. I wouldn't be sporting the 100k watch or buying $20M homes if I had that money, but to each his own. Pretty quick and cool success story.

Agreed, I'd quit.

That quick of success doesn't actually make me think he's successful, if anything it makes me think he's running some type of scam wolf of wall street style and the #### is going to hit the fan soon enough. Of all the people i've met, the ones who achieve massive success in a hurry... they're going to crash hard... The long term success stories are generally slower and steadier.

 

[chet]

Good for him. I wouldn't be sporting the 100k watch or buying $20M homes if I had that money, but to each his own. Pretty quick and cool success story.

Agreed, I'd quit.

That quick of success doesn't actually make me think he's successful, if anything it makes me think he's running some type of scam wolf of wall street style and the #### is going to hit the fan soon enough. Of all the people i've met, the ones who achieve massive success in a hurry... they're going to crash hard... The long term success stories are generally slower and steadier.

He pumping shares in private companies--except that he's the one buying.

 

[Maik Jeaunz]

pfft, get back to us when he's sporting this bad boy. then we'll know he's finally made it.

 

[chet]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

200k to a mill, wow that's actually a lot more than i thought. I figured the range would be 80-300k.

What's the difference then between these private equity firms and like a Hedge fund, because what you describe sounds like what i've heard about hedge funds.

Hedge funds are largely unregulated investment companies that typically invest in publically traded securities. However, there are some hedge funds that look more similar to PE companies because they invest in illiquid debt securities.

how does one invest in these private equity firms?

I mean I can't imagine there being that many of these firms around. There's a pretty limited number of millionaire investors in the country.

There are plenty of millionaire investors but most of the investment money in PE firms is institutional in nature. Pension plan, insurance company etc.

 

[Dentist]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

200k to a mill, wow that's actually a lot more than i thought. I figured the range would be 80-300k.

What's the difference then between these private equity firms and like a Hedge fund, because what you describe sounds like what i've heard about hedge funds.

Hedge funds are largely unregulated investment companies that typically invest in publically traded securities. However, there are some hedge funds that look more similar to PE companies because they invest in illiquid debt securities.

how does one invest in these private equity firms?

I mean I can't imagine there being that many of these firms around. There's a pretty limited number of millionaire investors in the country.

There are plenty of millionaire investors but most of the investment money in PE firms is institutional in nature. Pension plan, insurance company etc.

interesting, I guess I didn't realize those types of firms invested in what i'd consider risky assets like Hedge funds or PE firms... I thought they were made up of just massive portions of S&P 500 types of investments and the bond market.

learn something new every day.

 

[Nick Vermeil]

If I had the dough I would buy my own jet. I hate air travel that much. But when I wasn't using it that thing would be shipping organs, cancer patients and their families and war zone refugees around the clock.

 

[Cjw_55106]

heartwarming stories like this always make me feel like crap.

Why? Just cobble together the ~$300k and you'll be set.

 

[Nick Vermeil]

pfft, get back to us when he's sporting this bad boy. then we'll know he's finally made it.

I love that it's $990,000 crossed out, and "our price" is $990,000. SOLD!

 

[Dentist]

a dude I sort of know through my wife is now a CFO of a local private equity firm.

Can you sum up what a private equity firm is and what it does in a paragraph or less?

I wish i knew what this dude makes, he's new to the firm, and I have no concept of what corporate pay structure is like. He's an accountant for what it's worth.

I'm trying to decide if he lives above his means or is actually doing fairly well.

A PE firm buys ownership stakes in private companies with other people's money. Obviously, there are exceptions to this, but in a nutshell, that's what they do. Their revenues are dervived in two ways: 1) they charge an annual management fee of 1-2% of invested capital 2) they are paid an incentive fee of 20% of the profit realized from an investment.

Typically, the CFO is not a rainmaker in a PE firm. S/he's an accountant who interacts with the limited partners for capital calls/distributions, marks the portfolio etc--they perform the treasury function within the company. They don't make investments, raise capital, manage investments or any of the functions that the partners usually perform. They are well paid but not crazy money. I'd guess that annual comp would range from 200k-1000k depending on the size and success of the fund.

200k to a mill, wow that's actually a lot more than i thought. I figured the range would be 80-300k.

What's the difference then between these private equity firms and like a Hedge fund, because what you describe sounds like what i've heard about hedge funds.

ok, i was wrong he's not a CFO, he's what's called a corporate controller

What is that and what's that position worth?

 

[Gawain]

From zero to hero in under 4-years. Very impressive.

In fairness to those who may think "anyone" could do it, he probably did not start at zero.

Correct although the zero part really referred to his near bankruptcy.

Still, he was able to come up together 300K.

http://www.npr.org/2010/01/21/122725771/Bail-Burden-Keeps-U-S-Jails-Stuffed-With-Inmates

Look at these poor fellas who can't cobble together 500 bucks to get out of jail.

 

[IC FBGCav]

I had dinner with a friend--let's call him Ray--last week. 4 years ago, he was an M&A attorney and hated his job. One day he quit and told me and some other friends he was going start a private equity firm. I introduced him to another friend--David--who'd started a successful PE fund some 10 years earlier. David said Ray was incredibly naive after they'd done an introductory call.

6 months later, Ray identified his first acquisition candidate and asked if I wanted to invest. I politely declined as it wasn't the right industry, risky etc. He got the deal financed but almost bankrupted his family because he got to the closing and didn't realize he needed to prepay the legal and accounting fees. Somehow, he cobbled together the ~$300k needed to pay the lawyers and accountants and closed the deal.

3-years later, he's bought 5 other companies and has started buying out the original equity investors so he can own everything outright. His group of companies does $25-30MM in cash flow annually. I had dinner with him last week and he was sporting a $100k Patek and was looking at a $25MM plane and getting ready to build or buy a $20MM house.

From zero to hero in under 4-years. Very impressive.

None of these businesses have employees or expenses? Since when does cash flow equal profit?

 

[Dentist]

None of these businesses have employees or expenses? Since when does cash flow equal profit?

Exactly. You see this is the pattern I've seen with these people.. money starts flowing in, they buy up figuring the success will never end, then things start sinking, payments can't be met, and then they suffer lifestyle erosion... so instead of living a pretty nice lifestyle for a lifetime, they are no different than athletes with maybach's and a posse and cribz, and then when the money runs dry they have to sell it all and live a very average life. This guy will be the same way albeit most likely in less dramatic fashion because at least he has a degree and will have some type of a decent job to fall back into whereas the athlete generally has nothing.

 

[chet]

I had dinner with a friend--let's call him Ray--last week. 4 years ago, he was an M&A attorney and hated his job. One day he quit and told me and some other friends he was going start a private equity firm. I introduced him to another friend--David--who'd started a successful PE fund some 10 years earlier. David said Ray was incredibly naive after they'd done an introductory call.

6 months later, Ray identified his first acquisition candidate and asked if I wanted to invest. I politely declined as it wasn't the right industry, risky etc. He got the deal financed but almost bankrupted his family because he got to the closing and didn't realize he needed to prepay the legal and accounting fees. Somehow, he cobbled together the ~$300k needed to pay the lawyers and accountants and closed the deal.

3-years later, he's bought 5 other companies and has started buying out the original equity investors so he can own everything outright. His group of companies does $25-30MM in cash flow annually. I had dinner with him last week and he was sporting a $100k Patek and was looking at a $25MM plane and getting ready to build or buy a $20MM house.

From zero to hero in under 4-years. Very impressive.

None of these businesses have employees or expenses? Since when does cash flow equal profit?

I define cash flow as EBITDA so that number is after most cash expenses.

 

[chet]

None of these businesses have employees or expenses? Since when does cash flow equal profit?

Exactly. You see this is the pattern I've seen with these people.. money starts flowing in, they buy up figuring the success will never end, then things start sinking, payments can't be met, and then they suffer lifestyle erosion... so instead of living a pretty nice lifestyle for a lifetime, they are no different than athletes with maybach's and a posse and cribz, and then when the money runs dry they have to sell it all and live a very average life. This guy will be the same way albeit most likely in less dramatic fashion because at least he has a degree and will have some type of a decent job to fall back into whereas the athlete generally has nothing.