New private equity firm Think3 has $1B to take over companies that don’t quite reach “unicorn status,” but aren’t crashing and burning either — so founders can “stop wasting their lives.”
The fund targets middle-of-the-pack businesses in the “sweet spot” of $5m-30m in revenue, paying out 1-2x annual revenue in exchange for the company.
They then give those companies’ founders either $500k of backing with no equity, or $1m with equity, for their next venture.
Or at least that’s how Think3’s positioning it. They’re capitalizing on the trend of “serial entrepreneurs”: people who live for the thrill of starting and growing a business for the sake of the “sport,” and who are always looking for their ticket to that “big B” valuation.
So, where most firms require the founder and team to stay on with the acquired company, Think3 encourages them to go off and pursue their next big idea and pull the ripcord sooner on their current venture.
You know, the entrepreneur who stays on for decades as CEO of the company they founded — think Bill Gates and Warren Buffett.
Instead, we’re entering the age of ‘free agent entrepreneurs’ — people who transition companies every 3 years, with varying degrees of success.
Think3 is giving this new breed of founder an avenue to exit their company quickly, instead of, as they put it, wasting the prime years of their entrepreneurial career at a “so-so” business.