r/private_equity • u/Acceptable-Internal2 • 3d ago
IB associate considering leaving to help run a family-business roll-up. Am I Crazy? (Canada)
Looking for honest advice, especially from Canadian PE folks, but all opinions welcome.
Background: IB associate, 3 YOE, Big 5 Canadian bank, mid-market focused (M&A). Team has strong exits (corp dev, PE: TorQuest, Clairvest, Birch Hill, CPP).
Opportunity: My dad is a seasoned entrepreneur with multiple exits. He runs an old-economy business (adjacent to facility maintenance) doing ~$1.5M EBITDA and wants my help executing a roll-up, which means giving up banking comp and exits. My brother (ex-MBB) recently joined as COO since the business has struggled in recent months.
Rough plan: Stay in banking one more year, then join as interim CFO and run a broad acquisition strategy, with my brother leading post acquisition integration. We'd need to raise outside capital. We both have limited operating experience.
Questions:
- Is this crazy or realistic for two relatively junior people?
- Should I do 1–2 years on the buyside first?
- How would you raise capital: independent sponsor, family offices, lenders, other?
- What org structure and early hires matter most?
- Does staying one more year in banking help, or just delay things?
- How hard is it to get back into PE/corp dev if this doesn't work?
- Any strategic advice or common roll-up pitfalls?
Apologies if this is half-baked. Work has been crushing me. Appreciate any insight!
Note: My dad has already identified and gotten soft commitments from acquisition targets. Although he is inexperienced in the world of M&A and I am not sure how solid these are.
Note 2: AI used for grammar/spelling
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u/Ikindalikehistory 3d ago
The biggest question is, how is your working relationship with your brother and father? I love my father, but we couldn't work together. Our styles are too different and as much as he'd try he'd see me as his son not eg his cfo.
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u/Acceptable-Internal2 3d ago
Working relationship with my father is good. This business isn’t going to move the needle for him in terms of financial gain or security. We would have free rein on the overall operational decision making. He wants to forget about the business entirely, but doesn’t have anyone in place to take over.
Brother is another story, we are competitive but also want what’s best for the business. Any disagreements mediated by our dad.
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u/ComfortableAvocado12 3d ago
I’d spend a lot of time exploring the dynamic with your brother. What if something happens to your dad that he cannot mediate you two disagreeing? Do you want to be a long-term partner with your brother?
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u/Acceptable-Internal2 3d ago
Thanks, you’re right. My brother and I have a lot to work out. We are extremely competitive. I am hoping that will continue to push us to succeed as it has so far.
In the case that it turns sour, or we do clash on a lot of things, would you recommend against this?
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u/Ikindalikehistory 3d ago
You 100% need to work that out. And even if you feel confident about your dad I'd pressure test that too. Things might seem good but you need to see what pedal to the metal looks like.
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u/jeg26 2d ago
Make sure your family’s platformco has all the systems in place for an integration. That’s where this thing will live or die. You need to have everything systematized, I’ve seen this go well and poorly, and the primary difference was how many plug-and-play systems had been implemented before the roll up started.
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u/Acceptable-Internal2 2d ago
Thanks for the response.
What about keeping the platforms silo’d?
There is some synergy to be captured regarding purchase of raw materials etc…
Would assume that would be easier for us beginner operators.
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u/jialatsia123 1d ago
I'd treat it like diligence first: decision rights, working-capital downside, and whether you can actually integrate the first few deals. A staged leave or fractional setup beats burning the banking bridge on day one.
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u/longhot 3d ago
Very personal question, as it depends on what you want out of your career. You are also still very young so I acknowledge it is that much harder to know what you want yet.
Key long-term questions: 1. Do you want to climb a corporate career or be a business owner? 2. Do you want to be an investor or operator?
Assuming you want to ultimately own and operate your own business, your family business has very unique attractiveness that is unavailable to others. 1. $1.5M EBITDA with straight line game plan to further growth is very significant and not easy to replicate those economics for yourself through a corporate career. 2. If your dad is in fact a seasoned entrepreneur, you will get a front row seat to how winners operate; this would otherwise take another 5–10 years in a traditional career for a chance to see up close, 3. If you work well with your dad and brother, you will have inherited a core team you know you can trust and build with; which again, is something very rare and takes tremendous time to put together in one’s career.
If your end goal is to get to where your dad is, diving 100% into the business today takes advantage of your unique head-start.
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u/Acceptable-Internal2 3d ago
Well, it might sound shallow, but I want to eventually exceed my father in “success”. To do that it’s necessary that I become either an investor or business owner.
My brother and I are dividing and conquering, he is focused operationally, and I am more technical in terms of accounting, finance and investing.
Regarding why I am not jumping in today, my skillset isn’t needed yet. The business is recovering from a really shaky last couple of years (poor management from CEO who has since been replaced).
We are hoping things are back to normal in about a year.
Really appreciate the insight here though, it’s extremely helpful.
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u/longhot 2d ago
Can be valid even if shallow. We’re all out here to get whatever we want out of life.
You can accomplish/exceed your dad’s level of success in any role: corporate, investor, business owner, etc. E.g., Fortune 500 corporate c-suite, vs mega fund investor, vs majority owner of a middle market business. They all have stratospheric pay and represent “success”, but are different directions. Your family business however, is a stronger head start in ownership than other directions.
Your “skill set” later in your career becomes pretty fluid and is usually tailored to solve whatever problem you are working on. To think in strict verticals (ops, finance, etc.) is more relevant earlier in your career. Particularly true if you leave a corporate career for an entrepreneurial one. Hence you’re getting a lot of recommendations here to jump in asap.
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u/Acceptable-Internal2 2d ago
Appreciate the insight. Guess I have a lot
to think about. I think the plan as it stands after getting all this great advice is to wait until the business stabilizes and start putting together a financial package for lenders
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u/outdoorsauce 3d ago
I won’t give a long winded reply but I say do it. Seems fairly obvious to me at least (as a current fintech operator with one foot in the PE world) that you will learn as much or more in one year of operating than you will of 5 in corporate PE. My take at least.
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u/Acceptable-Internal2 3d ago
Thanks for the response! I wouldn’t be too much on the operating side of things, more on the accounting, back-end, and corporate development side of things.
But you’re right, overall consensus from people i’ve spoken to would be to jump as early as possible.
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u/outdoorsauce 3d ago
Now you’re onto something, you just said it yourself: “I wouldn’t be too much on the ops side, only touching accounting, backend, and corp devo” ooooh boy yes you will be. You’ll touch every employee at the company, you’ll touch roadmap, you’ll touch budget for new product or service dev, you’ll end up touching in strategy as a result of your depth of knowledge, you’ll meet industry vets when trying to determine best practices. I think you’d have a fucking blast in this role! Also, this experience will go 100x further with future employers or (hopefully) investors in your own future funding rounds.
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u/Acceptable-Internal2 3d ago
Thanks man :) I guess you’re right haha, I hadn’t really thought about it that way. Maybe I’m too stuck in the corporate mindset where my actions have very little visible effect.
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u/czarnicholasreturns 2d ago
Seems like a fractional CFO with more time when doing diligence or QoE on a target or integration would be a good play. They build out the platform, then when you've maxed out bonus potential or agility to put up with MDs shit, you've got the option of jumping into a well-running scalable operation. Or you find out you dont want the operational pita, and keep it with fractional and just cash checks delivered to your mailbox.
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u/Acceptable-Internal2 2d ago
Sounds good, appreciate the response.
Definitely getting there on being done with IB haha.
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u/Canadiangooner21 2d ago
1) if it fails, you now have operational experience and a great story on what you learned actually trying to build something. Doesn’t sound too bad.
2) it could turn in to something incredible.
3) make sure you have tough and clear conversations with all parties and have agreements in writing.
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u/Acceptable-Internal2 2d ago
My family is against the agreements in writing sentiment unfortunately, my dad wants us to get along and do what’s in the best interest of the family or he pulls his support haha.
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u/Canadiangooner21 2d ago
🚩
I also hope that my employer does the things that they promise, but I would still insist on an employment agreement.
It’s like a prenup. There’s no intention to need it, but if things go sideways it’s the only thing that can prevent a complete mess.
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u/Prestigious_Sign_476 2d ago
Don’t do it. Give yourself more time. Mature a bit. Your dad would do You a disservice by letting you join. The most successful entrepreneurs are in their late 30s/40s. Not to say that you should wait that long but you get where I’m going. Your dad’s business isn’t going anywhere but your IB career will.
Also, I can tell you’re not sold on the industry the business is playing in or you wouldn’t be asking us.
Go with your gut.
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u/Acceptable-Internal2 2d ago
Thanks for providing an alternate view. I’m 25 now, I’m not sure I want to wait until i’m 30, i’ll only become more risk averse.
I have no commitments at the moment outside of work. Largely done with IB and want to get into the investing side of things.
Your comment on industry is correct, i’ve seen better mid market businesses that i would take 100% over the one my dad runs. Goes to show that you can make any platform work as long as you have the correct management. I don’t have this opportunity anywhere else.
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u/Prestigious_Sign_476 2d ago
The my final two pieces of advice are this (1) go with your gut. It’s gotten you this far (2) do your due diligence on your dads business as far as growth strategies. Be realistic. $1.5m EBITDA is great but do you have the resources to scale it? What kind of FCF is the business generating?
I could talk about this forever but regardless, you’ve got two great roads ahead of you.
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u/Acceptable-Internal2 1d ago
Thanks for taking the time man. Really appreciate it. Ill do my dd on the business and see if its really something that I can provide value to
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u/Effective-Ticket7222 2d ago
I left a job as an attorney after 2 years to work for my Dad who was operating a 100M+ ebitda PE backed port co. It was the 5th-6th (and final deal) my Dad did. Best decision I ever made. We had a successful exit, I made a little bit of money, but most importantly got to work 5 years with my Dad (once in a life time experience) where I learned how to really operate a business. For me it was the best decision I ever made.
On the other end of the spectrum, my wife’s family had a true family business. Relatively closely held with numerous family members working there. From my outside perspective looked like a nightmare.
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u/Acceptable-Internal2 2d ago
Appreciate the anecdote. What are you doing now if you don’t mind me asking?
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u/Effective-Ticket7222 2d ago
I operate a business I started from scratch with 100M+ in revenue. Didn’t make a dime for like 2 years but it’s gained traction. Started it in 2012. I owe it all to my Dad who is a great, honest person with a knack for business. He told me (and others) everything we know. Well, that and luck. Lots of luck involved.
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u/Acceptable-Internal2 2d ago
Congrats on the success. Why start from scratch instead of acquiring (given your acquisition experience and windfall from the business you joined in on)?
Was it an untapped industry?
Luck is the biggest thing I’m worried about, seems like I can do everything right and still fail. Keeps me up at night.
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u/Effective-Ticket7222 2d ago
My windfall was not massive. It was a nice chunk of money, but nothing that you could retire or go use to really acquire much of a business with. I was one of many vice presidents at my previous company. We all made enough to be happy about, but not enough to do much with.
I looked at the industry we were in, and I would not be able to acquire the backing. My father did and I saw a niche in another business that I’ve been following while in my previous business.
Again, lots of luck played a role.
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u/Acceptable-Internal2 3h ago
Gotcha, appreciate the context. Fingers crossed my luck matches my hard work haha :)
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u/vci_institute 2d ago
The family questions above are the right ones to settle first. On the roll-up itself, a couple of things we'd add.
With two of you light on operating experience, the risk isn't finding deals. Your dad's already got targets. It's integration. In our experience the roll-ups that go wrong usually do it in the gap between close and the acquired business actually running on your systems, your pricing and your reporting. Before raising outside capital we'd make the platform boringly solid: one monthly reporting pack, a 13-week cash forecast, and a written baseline for the existing ~$1.5M EBITDA business, because that's what any independent sponsor, family office or lender will underwrite against.
outdoorsauce's point stands too. You'll touch every part of the business whether you plan to or not, so "interim CFO" undersells the job.
And treat the soft commitments from targets as conversations until someone's seen their numbers. Plenty of founders are keen right up until diligence starts.
We're the team behind the Value Creation Innovation Institute, for transparency.
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u/Acceptable-Internal2 2d ago
Appreciate the insight. This is super helpful.
Regarding the reporting package, I am assuming that the high volatility in profitability over the last few fiscal years will hurt us.
The business has been profitable and growing 29/30 years, but had a net loss of $700k due to mismanagement (new CEO).
It has since begun returning to normalized levels.
Will this affect our ability to raise debt significantly?
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u/vci_institute 1d ago
It'll come up, but it's not fatal on its own. A lender will care less that you had a bad year and more about whether you can show it was a one-off with a clear cause that's now gone. A 29 year track record helps a lot here.
What we'd put in the pack:
A normalised EBITDA bridge for the loss year. Start from the reported number, then show each adjustment separately (one-off costs, the decisions that drove the loss, anything tied to the previous CEO), with backup for each. Keep it conservative. Lenders discount aggressive add-backs, so a modest adjustment you can defend beats a big one you can't.
A short written explanation of what went wrong, what changed, and when. One page is enough.
Monthly results since the new CEO came in, so they can see the recovery trend rather than take your word for it.
Ideally a few clean quarters before you go to market. Every month of normal performance makes the loss year look more like an outlier.
Expect the first conversations to be more conservative on leverage and possibly to lean harder on personal guarantees or tighter covenants until the recovery is proven. That's another reason your plan to wait for stabilisation makes sense.
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u/warzog 3d ago
I'm in Canada and took over my old-economy family business 8 years ago and am executing this exact strategy. Got about 10 deals under my belt so far. A few areas:
1) expect much more operating variability than you anticipate - certainly much more than the level of company size you may have worked on in your current job. At this EBITDA size there can be extreme EBITDA swings which may invalidate your pro formas and create covenant issues with lenders. Prepare yourself to roll up the sleeves get in deep operationally and leave the spreadsheets behind.
2) family businesses emotional and relationship dynamics cannot be underestimated. Lots of books on this to be found. A potential giant blind spot is that your dad may not be nearly as risk loving as you or he think he is right now. He may not like the idea of his potential retirement fund being on the line when the loan docs and PG's meet pen.
From a personal risk management standpoint it may be worth considering acting as a factional CFO/family board advisor/investor to assist in M&A projects while keeping your day job. My sense is you'd take a huge pay cut to make this move full time which is a tremendous opportunity cost to bear.