John Hu, founder of Stan.Store share tips and tricks from simple outreach methods to nitty gritty sales techniques, he learned during his working years in Private Equity.
This are some of his favorite stories from his time in PE.
Intro (00:00:00)
- John shares their excitement about going to the beach and plans to share some of their favorite war stories from working in private equity.
Setting The Scene (00:00:21)
- John describes himself as a hungry 22-year-old when they first got a job in private equity and the strong desire to prove himself and make it in the world.
- In private equity, sourcing a deal is crucial, and the best deals are often those that no one else has seen before. John emphasizes the importance of being a good deal maker and hustling hard to find opportunities to get ahead in the PE World.
- They recall driving to work early in the morning and making cold calls to companies on the East Coast, even while driving.
Story #1: The “Drive-By” (00:03:01)
- John received a lead for a company called Norgon in North Carolina and spent a Friday night studying for and paying to take the Norgon JPRO certification, which he passed on the third try.
- Despite his efforts, the CEO of Norgon did not respond to his email. It took a few months to John actually get a meeting with the CEO.
- John also made an impromptu visit to the office of Noron, another company he was interested in investing in, and convinced the receptionist to let him meet with one of the co-founders, Dave.
- Dave was impressed by John’s efforts and agreed to meet with him, leading to an hour-long discussion about Noron’s business and its potential.
- John learned that Noron was a highly profitable and growing company but ultimately decided not to accept investment as they had sufficient capital.
Outreach Strategies (00:11:10)
- Used creative methods to get into companies that had no interest in talking to investors, such as:
- Sent a pizza to the CEO’s office with the company’s acronym made with pepperonis.
- Sent two cents via Venmo to the CEO with a message expressing interest in helping grow their business.
- John believed he differentiated himself in a crowded market by being fun, creative, and memorable.
- His Key Takeaways is to genuinely focus on adding value to people’s lives.
Story #2: Sourcing The $90M Deal (00:12:31)
- InvBusiness Technologies, a Bloomington, Indiana-based company specializing in government technology compliance software, caught the John’s attention as a private equity investor’s dream.
- The company’s impressive year-over-year growth and unique cash flow dynamics due to government procurement processes made it even more attractive.
- To secure the deal ahead of the founder’s planned investment banking process, John’s firm made an aggressive move called “preempting the process” by presenting an unsolicited bid based on the founder’s claims of growth and profitability without seeing the company’s financials.
- John emphasizes the importance of building a genuine relationship with the founder, understanding the market and competitive landscape, and knowing when to be aggressive based on conviction in the business.
- As a result of their efforts, they secured the largest investment they had ever made at the time, totaling $90 million.
John Hu is Loved by Creators
We continue to be amazed by how transparent and funny John is around the challenges and joys around building his company Stan.Store in public and all the behind the scene knowledge on the PE World.
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