Business case study explainer videofrom @amandasabreah

Transcript

Imagine you walk into a room to bid on a billion dollar company rank across the table from you is Citibank. You've got a two man team, no traditional fund, and a fraction of their balance sheet, and you win. Welcome to the magic of a strong position. You have a position too, and most people just never understand it enough to properly value it. So let's meet Reginald Lewis. He was a Harvard trained lawyer who wanted to buy companies and not just advise the people buying them. In 1983, he started his own firm to do what they call leveraged buyouts. A leveraged buyout is you buy a company mostly with borrowed money and then the company's cash flow and assets pay down the debt over time. So you use a small amount of your own capital, your own money, and a much larger amount borrowed against the company's future. So what you are selling in order to do this is the story of what comes next. Move number one, you've gotta position the asset first. His first target was McCall Better, a century old sewing pattern company in a shrinking category. And to the lenders, he sold one thing, a story around predictable cash flow. Flow. And this was the right story for lenders because lenders fund what? A credible story about future cash flow backed by real numbers. You make that story believable and it becomes collateral. But hold on. The story doesn't stop at just closing the deal. Move number two, you've got to articulate and amplify your wins. Three years later, he ended up selling McCall for around mid sixties, let's say $65,000,000 Worst people would take that win, bank it, and use it as a talking point over dinner, but Lewis hired a PR firm. He landed a New York Tier piece that was titled literally 90 to one return for best. And then he mailed that article to everyone that he did business with. You cannot be ashamed to self promote. This is something even I'm still learning to do. You've got to treat your wins like inventory, something that you can spend to buy the next thing. The takeaway here for you is a result is private until you make it travel. And stories are the only thing that can get in the room before you do. And number three, stack your wins. And this is where we have his claim to fame, Beatrice International. This is a company that he wanted to buy and it was not a small company. It was a portfolio of 64 of them across 31 countries. And at the table was Citibank, Pillsbury giants with real money. Lewis, on the other hand, still had no fun. But what he did have was McCall, a 90 to one return no could argue with. And that result is what got a two man team taken seriously on a billion dollar deal. One undeniable win with