Beyond the Conventional: Fresh Perspectives from the 2024 APAC ETA Forum
I left the forum with a renewed sense of excitement for the future of search funds, fueled by the palpable momentum and shared passion within the community. Many of the panels served as a powerful reminder that while conventional wisdom offers a valuable foundation, true success often lies in challenging established norms and embracing the unique circumstances of each individual search and acquisition.
In this post, I will delve into the key takeaways from the forum, exploring how experienced operators are defying expectations in their first year of ownership, and how debt advisors are encouraging a more nuanced approach to lender relationships. I will also touch on other noteworthy moments, including a provocative presentation by demographer Bernard Salt.
Salt's address, which centred on the notion of Australians being "addicted to lifestyle," offered a compelling lens through which to view the local entrepreneurial landscape. His assertion raises important questions about how this cultural emphasis on work-life balance might influence the search process, the types of businesses available for acquisition, and the strategies employed for driving growth.
Join me as we dissect these themes, drawing practical implications from the diverse perspectives and experiences shared at the ETA Forum. We'll examine how challenging conventional wisdom can lead to more informed decision-making and ultimately, greater success in the search fund journey.
Year One Reality Check: Insights from the Trenches
One of the highlights from the ETA Forum came from hearing the unfiltered experiences of those who have walked the walk. The operator panel, featuring searchers who are more than a year into running their acquired businesses, offered invaluable – and often humbling – insights into the challenges and triumphs of those crucial early days.
A recurring theme was the sheer difficulty of getting a handle on the business in year one. Several operators spoke candidly about the challenges they faced:
Navigating the Learning Curve: Perhaps the most common experience shared was the steep learning curve that comes with stepping into the leadership role of a newly acquired business. Operators often found themselves needing to adapt quickly to unfamiliar systems, processes, and company cultures. This initial period of learning and adjustment, while challenging, also presented valuable opportunities for growth and discovery.
Data and Systems Deficiencies: Accessing reliable data and establishing robust systems proved to be a major hurdle. Many found themselves grappling with outdated or fragmented information, making it difficult to gain a clear picture of the company's performance and make informed decisions.
Team Building Trials: Assembling a high-performing team and aligning everyone around a shared vision also presented significant challenges. Issues like talent gaps, cultural mismatches, and resistance to change were common experiences.
Interestingly, these experiences challenged a common piece of advice often given to searchers: "Don't rock the boat in year one." While the intention behind this advice is sound – to allow time for learning and relationship building – several operators expressed regret for not acting sooner on certain issues. They felt that delaying key decisions or changes, due to a desire to avoid disruption, ultimately hindered their progress and prolonged the period of uncertainty.
This highlights a tension in the early stages of ownership. While a period of observation and learning is essential, it's equally important to be decisive and address critical issues head-on. Finding the right balance between these competing priorities is a key challenge for any searcher in year one.
Debt Advisor Panel: Navigating Lender Relationships
The debt advisor panel provided a diverse range of perspectives on financing options, with a strong representation of non-bank lenders alongside an experienced debt advisor.
A key takeaway from the panel was how to best communicate with lenders. It's easy to assume that lenders want to be kept in the loop about every challenge that arises, but the panelists suggested a more strategic approach.
Rather than simply reporting problems, they recommended approaching lenders with a solid understanding of the issue, its potential effects on the business, and a clear plan to address it. This demonstrates not only awareness but also a proactive and thoughtful approach to managing challenges, which builds trust and strengthens the relationship with your lender.
This highlights the strategic importance of communication in securing debt financing. By presenting not just the problem, but a clear path forward, searchers can demonstrate their leadership capabilities and build confidence with potential lenders.
Championing Inclusion: A Step Towards Greater Diversity in Search Funds
Beyond the core panel discussions, a particularly noteworthy moment emerged from the ETA Forum, signaling a positive shift within the search fund community.
The presence of an investor specifically focused on supporting female searchers was a welcome development. This initiative reflects a growing recognition of the valuable contributions women make to the entrepreneurial landscape and provides an encouraging sign of progress towards greater inclusivity within the search fund model. This dedicated support will undoubtedly empower more women to pursue this path, enriching the community with diverse perspectives and talent.
In sum, the ETA Forum proved to be a rich source of insights, connections, and inspiration. Whether you're a seasoned searcher or just beginning to explore this path, events like these offer invaluable opportunities for learning, networking, and growth. Mark your calendars for next year's gathering – I look forward to seeing you there.
Key Takeaways and Next Steps
Wow, what a whirlwind! This year's ETA Forum was filled with insights, connections, and inspiration. Here's a recap of some key takeaways:
Year one can be tough. It's a time of intense learning, adaptation, and growth. Be prepared for the challenges and embrace the journey.
Communicating effectively with lenders. While early communication with lenders is important, it's even more valuable to approach them with a clear understanding of any challenges, and a well-defined mitigation plan.
Increasing diversity in the community. The search fund model thrives on a diversity of thought and experience. The increased support for female searchers strengthens the community as a whole.
On a personal note, the forum served as a powerful reminder of why I'm so passionate about this space. The energy, the shared ambition, and the sense of community were truly inspiring.
Until next year's gathering, let's continue to learn, adapt, embrace the unpredictable, and support one another on this exciting path.
Now, it's your turn!
What were your biggest takeaways from the forum? Feel free to connect with me on LinkedIn – I'd love to hear from you. You can also check out my LinkedIn post for some additional reflections on the event here.
Let's keep the conversation going and support each other on this journey. Onwards and upwards, searchers!
