From Seed to Success: How Private Equity Helps Accredited Investors Invest in Tomorrow's Giants

Private equity (PE) plays a pivotal role in nurturing small businesses and startups, transforming them into industry leaders. This investment strategy involves injecting capital into companies with high growth potential, providing them with the resources needed to scale operations, innovate, and expand their market reach. Below, we explore how private equity has been instrumental in the growth of various companies across the web-tech, transportation, and logistics sectors, including insights from Scott Hauck, General Partner and Founder of the Legacy Capital Fund.

Massive Amounts of Undervalued Businesses:

A 15x increase in small businesses for sale each year in the US, economic recession, and high interest rates will lead to business owners selling for much lower multiples. This means the market will be flooded with more undervalued businesses than buyers can handle. Private Equity historically offers higher returns, lower volatility, and less risk compared to public investment markets (uncorrelated with public markets).

Case Studies from Legacy Capital Fund’s GP Scott Hauck:

CASE STUDY - KELE INC.

We were hired by a PE firm to help build and eventually sell Kele Inc., a business valued at $53.8M. In three years, we helped Kele reach a $158M valuation and be acquired by another PE firm. We did it by doing the following:

Completely rebuilding their digital presence, implemented and integrated a new ERP system, rebuilt their eCommerce platform, created a state of the art advertising model, integrated their CRM platform, sales enablement, and lead routing programs into one major platform.

We also implemented new partnership selling channels, a mobile-friendly eCommerce tool and app for on-the-job purchasing and sourcing, built new social media channels, and a commercial Amazon presence.

Pre-Acquisition Valuation: $53.8M

Acquisition Valuation: $158M

Increase in Valuation: 194% (3 yrs)

CASE STUDY - GALILEO

We acquired the Galileo business valued at $400M. In three years we helped Galileo reach a $1.2B valuation and be acquired by SoFi. We helped them with the following:

Rebuild their entire marketing and sales model in order to more accurately track marketing and sales channel attribution tied to revenue operations (RevOps).

Provided valuable strategic direction that helped them scale their sales and marketing efforts while leveraging advanced technology integrations, AI, top-down corporate restructuring.

Pre-Acquisition Valuation: $400M
Acquisition Valuation: $1.2B

Increase in Valuation: 200% (3 yrs)

CASE STUDY - UNISHIPPERS

We acquired the Unishippers franchise third-party logistics business valued at $15.5M. Over the course of three years we partnered with them do the following:

Completely rebuilt their digital presence, created a state of the art advertising model, CRM integration, and sales enablement and lead routing programs to drive new leads to logistics franchises throughout the US.

Launched new RevOps model/platform (Marketo) as well as integrated all of their internal lead and prospect touch points, aligned marketing, sales, and advertising channels, and created a robust ROAS calculator and channel attribution model. This allowed us to manage all sales enablement, lead generation, web optimization, and marketing campaigns for over 250+ transportation franchises.

Pre-Acquisition Valuation: $15.5M
Acquisition Valuation: $75M
Increase in Valuation: 384% (3 yrs)

Additional Case Studies

Legacy Capital’s Scott Hauck has an extensive background in successful raises, operational improvements, revenue increases, and profitable exits with Private Equity investments. He has had:

• Over $2.5B in revenue generated for businesses and clients

• 20+ years business management and private equity experience

• 6 mergers and acquisitions completed including Unishippers, Galileo, Kele, and GlobalTranz

(Web-Technology) Cisco

• Background: Cisco's Global Demand Generation business was significantly enhanced through strategic interventions by Legacy Capital.
  

• Private Equity Impact:

  • Built a decentralized global team of 100 additional full-time employees.

  • Implemented a 20-point project management process and new software.

  • Launched new marketing automation software (Eloqua) and digital assets, leading to a 276% increase in leads and a 163% revenue increase year-over-year.

(Transportation) WWEX/Unishippers

• Background: A third-party logistics business that was transformed with the help of Legacy Capital.
  

• Private Equity Impact:

  • Developed a new online presence and state-of-the-art advertising model.

  • Integrated CRM and sales enablement programs, significantly boosting lead generation.

  • Managed marketing campaigns for over 250 transportation franchises, resulting in substantial revenue growth.

Additional Examples of Private Equity Successes:

Shopify

• A leading e-commerce platform that has grown exponentially due to private equity investments, enabling it to support millions of merchants globally.

Stripe

• This fintech giant received substantial private equity funding, which has been crucial in developing its advanced payment processing solutions for online businesses.

Square

• Known for its comprehensive financial tools and point-of-sale solutions, Square has expanded its market presence with the aid of private equity.

Adyen

• Adyen has utilized private equity funds to scale its operations globally, offering cutting-edge payment solutions to e-commerce businesses.

Zebra Technologies

• Specializes in tracking technology and solutions, Zebra Technologies has leveraged private equity to advance its product offerings and market reach.

Flexport

• Flexport has transformed the freight forwarding sector with its technology-driven platform, enhanced by private equity investments.

Convoy

• This digital freight network has optimized logistics processes thanks to private equity, improving efficiency and reducing transportation costs.

Transfix

• With the support of private equity, Transfix has grown into a key player in the digital freight marketplace, innovating logistics solutions.

Coyote Logistics

• Initially bolstered by private equity, Coyote Logistics was later acquired by UPS, showcasing the value added through strategic financial backing.

Wrap Up

Private equity serves as a catalyst for transformation within burgeoning companies, equipping them with the necessary tools to disrupt markets and achieve sustainable growth. For accredited investors, investing in private equity offers the opportunity to be part of tomorrow's success stories, contributing to and benefiting from the next wave of global industry leaders.