Thread by @tsludwig

Years ago, I was excited by the idea of forming a holding co. I dug in pretty deep, but ended up pursuing deals on a stand-alone basis. I’ve had a few independent conversations lately with folks mentioning similar ideas, which made me revisit my plan. tldr: It's still good

The key structural benefits I saw
- Ability to recycle capital and reinvest at high rates of return
- Lower cost of debt as portfolio scales (x-collateralize)
- Institutional systems w/ FO time-horizon
- Tax-deferred, long-term compounding
- Lower trans costs & reinvestment risk

Using $20M called over time, my model shows a 25x MOIC in 20 years, net of carry. Most interesting was comparing that to a similar portfolio of more traditional PE investing w/ regular sales. In that scenario, MOIC was ~5x.

My model (no formulas): bit.ly/37ssN7e

At the time, in casual talks w/ investors, no one was interested. Too long of a hold/no liquidity, my limited track record, unfamiliar model...just couldn't find the right investor fit. Now @PermanentEquity, @chenholdco, others are visible proof-points (though still early).

I apologize for all the financial/PE jargon in this thread. I hate doing that, but given character limits, this was the most concise way of communicating the key points.

Takeaways: timing, connections are really important w/ new ideas; w/ good execution & team this idea would 🚀

To sharpen my thinking, what haven't I considered or misjudged?