Episode Details

Welcome to Step by Step, a 5-part series from Future Commerce to help walk you through how to launch and grow a successful business. This season, we're talking about funding. Today is episode 4. Today, Phillip & Brian are joined by Jeremy Muras of Lion Capital Group to discuss Private Equity.

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Show Notes

Main Takeaways:

• In today's episode, Brian and Phillip are joined by Jeremy Muras from Lion Capital to talk about the ins and outs of private equity.

• What are some of the major differences between Private Equity and Venture Capital?

• Private Equity benefits brands with not only large amounts of capital but a proven track record of successfully growing brands.

• How can Private Equity help brands resonate with their ideal customers and tap into previously unexplored channels?

Jeremy's Journey: A Look Into His History:

• Jeremy has been in the digital industry since the early 2000s and got interested when he was located in Hong Kong and he got close with the team that built Monster.com.

• He worked for a luxury lingerie company called Agent Provocateur, ran TopShop.com for a brief spell, and then made his way to Burberry where he worked as the eCommerce Manager for Europe.

• While at Burberry, Jeremy and his journey were the first to execute purchasing directly from the runway, in-store pickup, and various othering pioneering innovations.

• From there, he found his way to Lion Capital where he operates as an expert on digital marketing and allowed him to expand his expertise.

Distinct Differences: Private Equity vs. Venture Capital:

• Essentially, private equity is equity or shares that represent ownership or an interest in a particular company that is not public.

• Private Equity requires companies to prove that they can scale and be able to demonstrate a number of years of profitability.

• Part of the challenge that Private Equity firms face in today's ecosystems is that a lot of successful DNVBs have exponential growth, but haven't demonstrated consistent years of profitability.

• Lion Capital typically invests over $100 million into a business and tends to not go much go lower than that.

• The goal is to achieve a positive return on investment in 5-7 years.

Going Deeper: How Does It Work?:

• Private Equity firms typically get their money from large institutional investors such as pension funds, insurance companies, and banks or other accredited investors like high-value individuals.

• Large institutions are investing in what is effectively betting on entrepreneurship being a growing portion of economic advantage in the United States.

• Unlike Venture Capital, Private Equity is not going to make risky investments that have not proven themselves.

• The gates that brands need to get through to acquire private equity are designed to give confidence and assurance to investors that their investment will be profitable.

Hands-On or Hands-Off: How Involved Are Investors?:

• Jeremy mentions that the consensus is split pretty evenly amongst investors whether they want to be hands-on in scaling their investment or not.

• As the industry has become more competitive, the active investor has started to take dominance in the preferred model of a firm.

• Demands are higher with the disruption coming from digital and other verticals.

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