Mar 6, 2024
The Surge of Interest from Wealth
Management Firms
In a recent wave from January to June 2023, Lindsay observed an
unusual trend: a number of wealth management firms expressed keen
interest in investing in the wedding industry, specifically wedding
venues.
After some thorough research, she confirmed that these firms were
independent of each other and scattered across the US, from New
York to California. Their goal was to invest large sums, often with
the intent to acquire and grow various wedding venue
businesses.
- Diverse Interest: Multiple wealth management firms are looking to invest in the wedding industry.
-
Investment Goals: Strategies range from flipping
venues for profit to monopolizing local markets.
Initial Skepticism and Due Diligence
Lindsay shared her initial hesitations about
these inquiries, emphasizing the importance of due diligence. She
expressed concern over the firms' approach, which seemed to
undervalue the hard work of venue owners by referring to their
businesses as "mom and pop" venues. The firms aimed to purchase
profitable venues, with profits matching their investment, which
Lindsay questioned, suggesting that a venue making significant
profits wouldn't likely sell for just one year's
earnings.
- Protecting Venue Owners: Approach inquiries with skepticism and due diligence.
-
Understanding Value: Consider the true worth of a
profitable business before entertaining offers.
Negotiating Power and Legal Protection
The hosts advised venue owners to involve legal counsel in any serious acquisition discussions. With wealth management firms likely having extensive legal and financial advice, it's crucial for venue owners to level the playing field with their own experts, particularly acquisitions and real estate attorneys.
- Legal Representation: Engage an acquisitions attorney and a real estate attorney when approached.
- Know Your
Worth: Ensure you understand the full value of your
business and have professional financial advice.
Emotional Considerations and Strategic Decisions
Moving beyond the financials, Kinsey and Lindsay discussed the emotional and strategic aspects of potentially selling a venue. They advised venue owners to separate emotions from the decision-making process and to consider the long-term implications for the industry and their personal lives.
- Emotional Detachment: Keep emotions away from the transactional aspect of selling your business.
- Future of the Industry: Reflect on the potential impact of such sales on the wedding industry's sustainability.