FREQUENTLY ASKED QUESTIONS
Will you invest outside of your HLP partnerships?
We are frequently approached by other members of the ETA community, or deal-makers from beyond, with opportunities to invest in “deals.” We are currently investing in sole-sponsored, traditional, and self-funded search. We also have the ability to invest in funds that have a gap in their equity commitments in traditional search.
Will you invest outside of the United States?
Currently our mandate restricts us to searches and acquisitions within the United States.
How does the economic relationship with your Sole-Sponsored Entrepreneur Partner work?
We provide search capital in two contributions: at launch and after 11-12 months
We provide the equity required to close the acquisition (including all deal fees and costs)
We also have the senior lending in place for any deal we’d like to do
Our partner has the right to invest with us, pari passu (on the same terms), for up to 20% of the deal value
Our capital contributions go into the deal as participating preferred units, accruing a 10% annual coupon rate
Upon close of the deal our partner is granted 10% ownership of the business, in common units
Our partner vests into an additional 15% ownership, in common units, vesting quarterly over 4 years
HLP collects 100% of profit distributions from the company until we have recovered our equity and accrued preferred interest, at which point we convert to common units
Our partner gets a catch up, meaning she then collects 100% of the distributions until generating 25% of the total funds distributed up to that point
If Halstatt converts to common before our partner's 4-year vesting window is complete, she fully-vests immediately
We split future distribution streams on a pro-rata basis
What does HLP look for in Entrepreneur Partners?
We are looking for exceptional people with whom we can be proud to be associated for a long time. Our partners tend to be the following:
Gifted communicators, skilled in writing, speaking and listening
Empathy. They are in the habit of trying to understand first, and influence or manage second.
Persuasive and skilled at building relationships
Reasoned decision-makers who seek information and opinions to inform themselves
Willing to candidly discuss mistakes, evaluate how they happened and take steps to prevent them from recurring (they've all made mistakes too... sometimes big ones)
Humble. They don't think they know everything, or that they're the smartest person in the room. They don't regard any job or person as beneath them. They're never embarrassed to ask a dumb question, and they are not shy about asking for help.
Extremely self-aware. They have a fully-formulated reason for pursuing entrepreneurship, which has been vetted by their spouse or partner, broader family, mentors and anyone else who's opinion matters to them.
Biased toward action. Yes, they’re thoughtful, but when the time comes, they move forward with a decision in the absence of perfect information or a perfect process.
What is your process to evaluate a potential Entrepreneur Partner?
We are looking to find alignment between HLP and a partner in terms of entrepreneurial objectives, decision-making method, and leadership philosophy. We are not at all concerned whether a potential partner has ever been an i-banker or worked in PE. They have varying degrees of prior management experience and pre and post-MBA work experience, and they've come from different industries.
Depending on the type of search, the evaluation process can range from weeks to months. We believe it’s smart for both parties to take their time in evaluating one other. The result is that as partners we never wonder how the other thinks or works, and our partner never wonders whether the capital will be there to close the deal. Once we’re partners we only need to evaluate the merits of an opportunity, not each other.
Are there specific industries you're most interested in?
Our interests are driven by the skill, experience and interests of our partners. The result of our relationship development work is a shared thesis about the type of company that would make our partner happy and successful. That thesis is idiosyncratic to each partner. That having been said, there are a few areas where we are not interested in making search investments. They are the following:
Opportunities closely tied to the Real Estate new build cycle
Opportunities with innovation or market development risk (technology, life sciences, software, pre-profit or early-stage companies)
"Sin" industries (alcohol distribution, tobacco, cannabis, pornography, etc.)
For the sole-sponsored searchers, we would not be interested in opportunities that secure revenue through small business set-aside contracts or disadvantaged business enterprise (DBE) designations
What is your expected holding period for each investment?
We would prefer not to sell productive investments and like to work with partners who have a long-term perspective on their entrepreneurial journey. That doesn't mean we would never sell. It means we prefer to invest in businesses and with partners who will generate sustainable value over the long-term. If someone approached our partner with "an offer we couldn't refuse," we would certainly consider it. If our partner decided she no longer wanted to lead the company, then we'd have to work with that partner to determine the best plan for the company (sell, find a replacement for CEO, etc...). We enter into an acquisition with the expectation that we will own the company with our partner for decades.
Do HLP's entrepreneur partners have to work from Naples, Florida?
Our partners are certainly welcome to work within our Naples offices, but we don't expect it. They come down here to visit periodically, and we travel to them regularly.
How did Halstatt Legacy Partners get involved in Entrepreneurship through Acquisition?
Halstatt Legacy Partners is the result of Halstatt's interest in the following:
Continuing its prior success in direct private equity investment
Forming long-term partnerships, defined by aligned incentives, with exceptional, young entrepreneurs
Protecting communities through the economic benefits of small business success
Generating investment returns through long-term ownership, profit distributions, and potentially liquidation events
How much capital does Halstatt have?
In the interest of protecting the family's privacy, we prefer not to disclose that information. Suffice it to say, Halstatt has allocated enough capital to Halstatt Legacy Partners to provide fund 100% of the equity required for each of our partners' acquisitions.
Halstatt is a family owned investment firm located in Naples, Florida, and proud to be affiliated with the Barron Gift Collier legacy. We have enjoyed a long history of successful real estate development in Southwest Florida, and over the years we have cultivated a valuable network of trusted operating partners and investment managers. Today, Halstatt and our affiliated firms manage our own capital as well as that of a select number of family offices and institutional investors across a broad range of asset classes. Halstatt and our affiliates conduct direct investment across real estate, venture capital, private equity, public markets and entrepreneurship through acquisition. Halstatt Legacy Partners' sole source of capital is Halstatt.