Perhaps you have heard — the US M&A markets are “overly competitive owing to high valuations." This piece gives a great synopsis of what is going on.
Ask pretty much anyone in the game… it is a seller’s market right now. To paraphrase what a local M&A guy (name withheld) wrote in a piece recently, if your company is not getting unsolicited calls about being bought, then you must not have much of a company. To paraphrase what a local private company investor (name rhymes with “carrot core”) proclaimed to some buddies recently when drinking beers at Dockside, company valuations are so high right now that people are going to suffer the proverbial nosebleeds.
So, if you’re an investor like me who prefers not to stick twisted paper towels in his nostrils, what do you do? How do you find private company investment opportunities in this market?
Well, I am doing a couple of things perhaps of note. For one, I am looking to create ways to make money in existing, stable markets. For another, I am looking to capitalize on opportunities in emerging, fast-growing markets.
Let’s look at the former way first. People eat a lot of chicken. They have been eating chicken for a long time and all indications are that considerable consumption will continue well into the future. Like every industry, poultry processing has a supply chain with opportunities for outside financing. The ecosystem is pretty stable, the economics are fairly straightforward, and, most importantly, the demand is there. I have been made aware of an opportunity that has compelling risk-reward parameters, so I have jumped in with both feet… and my checkbook.
Now let’s look at the latter way. I love pickles (baby dills for me), but I really, really love pickleball. So do a lot of people, as this article explains. Whether or not it is THE fastest growing sport in America, there is plenty of evidence to suggest that lots of people are picking up this wonderfully weird hybrid of badminton, ping-pong, wiffle ball and tennis. The demand for pickleball equipment, apparel, clinics, tournaments, facilities, etc. is exploding. With exploding demand comes opportunity, so I am — you guessed it — jumping in with both feet… and, yes, my checkbook.
Private company investing can seem like a Rubik’s cube. There are complexities that come into play, sure, but it all comes back to finding opportunity where others cannot or will not see it. You have to know how to capitalize, which comes down to people and their ability to execute. If you can find those people to collaborate with and you can find the right spot on the supply-demand vortex, there is money to be made.
About Merrette Moore: Merrette Moore is the Managing Partner of Tidewater Investment Company, overseeing the operations of the firm. Merrette has over 25 years experience working in finance, company management and innovation. He has been involved in over 50 private investments, serving as the lead investment representative for many of these deals. Merrette has participated on the boards of several privately held companies either as the executive chairman, director or an observer.
About Tidewater Investment Company: Tidewater Investment Co. is a North Carolina investment firm focusing on small company direct investment as well as healthcare venture capital. Tidewater provides unique access to subordinated debt, small company private equity, growth capital, and venture capital investments for high net worth individuals, family offices, and small institutional investors. The firm’s investment platform allows investors the flexibility to invest on a deal-by-deal basis without any upfront commitment of long-term obligation.
For More Information, please visit our website: www.tidewaterinvestco.com.
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