Buy the CEO Spot

By Renee LaBran
Partner, Rustic Canyon/Fontis Partners, LP

Whether because of a glass ceiling or other reasons, women may find themselves wondering what else they can do to obtain the CEO title.  Or maybe they have been a CEO and want to figure out their next move.  In these situations, few women think about “buying” the spot.  What do I mean by that?  As a private equity investor, we look for strong operators to back.  These executives come to us with a company that they have identified to acquire and are looking for investment capital.  These executives are almost always men.

Where are the women?  I believe that there are a number of reasons for the dearth of women seeking to do a private equity backed acquisition.  For one thing, women are less likely to take risk than men.  Buying a company is risky, no doubt about it.  But it can also reap big rewards, personally and financially.  Second, women tend not to be as self-promotional as men, and you have to be willing to put yourself out there with a high degree of confidence when you go ask someone to invest millions of dollars into your plan.  Finally, women tend not to be connected into private equity networks in the way that men often are.

If you are a seasoned executive with strong functional and / or industry expertise, acquiring a company in partnership with investors may be a good way to attain that CEO spot.  The company you target might be the company you work for, or a competitor that you know of.  It should be a company with fundamental strengths that are perhaps underutilized because of sleepy management or a lack of capital, where a fresh and strong management team can drive value.  It may take some time to find the right company.  Once you find it, you need to find the right partner as your source of capital.  The private equity firm should work with you to complete diligence on the target and to refine your business plan, in addition to finding a way to structure the deal.  The importance of fit with your partner cannot be overstated.  Your investors will have a lot of say in key decisions, and you want them to be a partner in the true sense of the word.

Renee was a featured speaker at the Broads Circle lunch event titled Buy the CEO Spot on May 26, 2011.

Rustic Canyon/Fontis Partners, LP
http://www.rcfontis.com/

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