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June 5, 2024
Escalon Services’ maestro of numbers shares how his career can impact your business.
Welcome to our new series, Meet the Expert at Escalon, where we introduce you to industry leaders shaping your business’s future.
In this edition, we’re in conversation with William Webster CPA, an experienced business advisor for PE-backed companies. William brings a rich background from notable firms such as Ernst & Young, PitchBook Data, and Tegus.
William’s finance and business development journey is marked by a series of impactful roles in which he has driven growth, crafted strategic initiatives, and developed resilient businesses. In this interview, we delve into his perspectives on the evolving landscape of private equity and venture capital. We explore how technological progress reshapes the industry and what startups need to capture investor interest.
Join us as we explore the dynamic landscape of PE and VC through the lens of an industry expert.
William Webster (WW): What first sparked my interest in Private Equity was working on a bookkeeping assignment for a large family office in Kansas City right after university. It was fascinating to see one family own so many investments, with no overlap between the family and the operators. From that moment, I wanted to learn more about investors.
WW: There are several, but the most significant challenge is the Deal Flow. Entrepreneurs are the lifeblood of the private markets; without new business ventures, there’s nothing to invest in. At the same time, the proliferation of tools like SourceScrub, PitchBook, Grata, and others has allowed PE funds and investment banks to boil the ocean in the hunt for new investments. In the current environment, high interest rates are wreaking havoc on private equity fund managers, as the high cost of capital slows deal-making and lowers returns.
WW: You have to be a constant student of the game. I turn to newsletters from Axios Pro Rata, Fortune Term Sheet, and PitchBook Data and read the Wall Street Journal daily. For accounting standards, I regularly listen to webinars from Thompson Reuters and other key CPE providers.
WW: I foresee more corporate divestitures – many listed companies gobbled up assets during COVID. Now, these large strategics have seen their stock price tumble. To increase share prices, they will spin off non-accretive business units.
I also expect PE funds to invest more in single-family homes. Blackstone is already acquiring many of these properties. With baby boomers retiring and millennials behind the 8-ball on savings, I expect significant PE funds to create SPVs that acquire homes directly from property owners. In the VC sector, there will be increased scrutiny and diligence on earlier-stage companies, with investors demanding revenue and low churn before writing a seed check.
WW: Know your numbers, market, customers, and KPIs. These are all essential for any conversation with an investment firm. Additionally, it’s helpful to know some comparable valuations for public companies and previous M&A deals.
WW: There’s a rise in robust BizDev function at PE, VC, and investment banking. Traditionally, B2B SaaS organizations have utilized several tools, such as Zoom Info, Outreach.io, HubSpot, Salesforce, and Highspot. As the hunt for deal flow remains at the forefront of every fund strategy, implementing a solid B2B SaaS approach to deal sourcing will be the differentiator for funds performing in the highest IRR quartile. More significant funds like The Blackstone Group Inc., The Carlyle Group Inc., TPG Capital, and Sequoia Capital already utilize proprietary tech stacks to uncover the best investment opportunities.
WW: At Escalon, we offer outsourced accounting, fractional CFO services, and outsourced HR solutions across industries. Before speaking with a business owner or founder, I research key investors in their niche and recent VC, PE, and M&A transactions. Starting with the end in mind is crucial because an organization’s accounting and finance functions are often overlooked. After all, nobody starts a business because they want to reconcile cash and revenues.
WW: At PitchBook, I worked with an emerging fund manager, raising their first fund. The team was diverse in both background and experience. They had some track record, but pitching LPs was going to be tough. Specifically, how do you find LPs with an appetite for your investment thesis, and how do you get a meeting? By understanding the fund managers’ backgrounds, I helped craft a pitch appealing to LPs, connecting through shared colleges, firms, and local ties. Ultimately, they were able to close a $50M fund as a result of my input.
WW: I am an eternal optimist and believe that enterprise and technology can alter the course of humanity. The industrial revolution created vast opportunities and alleviated poverty. Each conversation with a business owner and founder is an opportunity to appreciate their work and its potential for positive outcomes.
William Webster started his career working with a family office in Kansas City and has spanned stints at companies like Ernst & Young, PitchBook Data, and Tegus. He’s passionate about ensuring that small business owners can achieve the dreams they’ve set for themselves as they grow their companies. Further, his experience ensures that he has the interests of everyone, from investors to business owners, when looking to broker deals.
Want to learn more about how Escalon’s experts can help your business? Talk to us today.
Arya Chatterjee is a freelance writer and consultant from Mumbai. With a background in journalism and over five years of creative writing experience working with legacy media like Architectural Digest and Femina India and brands like The Label Life, ThinkRight.me and Macy's, she crafts unique and compelling stories that engage the readers. She enjoys writing about health, beauty, fashion, and lifestyle and exploring the symbiotic relationship between thriving businesses and happy employees through her writing. She is always looking to explore new avenues to expand her creative energy.
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