Desert Horizon Capital is a search fund founded by Craig McNally and Kamran Cheema, two ambitious entrepreneurs and business professionals. They founded the company in 2022 to enter the private equity realm through the search fund model. Their diverse backgrounds and experiences form the backbone of their strategy to acquire and foster growth in a US-based company. But it's not just about business expansion for Craig and Kamran; they are equally passionate about preserving the legacy of the businesses they acquire.
Finding A Needle in the Haystack
Upon completing their fundraising in July 2023, they are now looking for their first acquisition. With an open mind and no preconceived niche, they are casting a wide net but gradually focusing their search. They are mostly looking into growing industries, yet, only focusing on the ones that have enough companies to make it interesting.
The task of finding the right business is akin to finding a needle in a haystack, and it's essential for their success. It's a challenge, but one they are eager to take on.
To find the perfect deal, their strategy is threefold:
1) leveraging personal networks
2) brokerage outreach
3) proprietary deal flow
And the last one is where Inven, the AI-powered deal-sourcing software, comes to picture.
How did Inven stand out from other softwares?
To build proprietary deal flow, Craig and Kamran have used deal sourcing softwares to compile lists of prospective companies.
Craig and Kamran have earlier used Grata for their deal pipeline. Yet, they jumped into a demo call with Inven to start a free trial and it clicked right away. "It started with a free trial, and we really liked what we saw,” Craig said.
After comprehensive testing, they can say that Inven could bring a real benefit on top of their current deal strategy: Inven helped them find companies they would have otherwise missed, and fill the gaps they didn’t even realize existed.
Inven's 'intent to sell' feature was a unique selling point that directly catered to their needs. "We're pretty excited and bullish about it," Kamran confessed, reflecting their aim for identifying businesses ready to sell.
A Seamless Search Experience
Kamran also highlighted Inven's Descriptive Search, which offered an intuitive search experience. This feature was distinct from other platforms they had encountered, making deal sourcing even more efficient.
Expansive database to help build their deal flow:
Craig and Kamran also highlighted the breadth of Inven's database. "There are a lot of companies that Inven has which other platforms don't. The same search with Inven brought a vast number of companies that softwares like Grata missed." Craig pointed out. For them, this expansive range means more leads and a higher chance of finding the ideal business for their acquisition goals.
While they acknowledged the merits of other platforms, Craig and Kamran found Inven to be more aligned with their needs and goals. From its user-friendly design and accurate data to its innovative features, Inven stood out as the right choice for Desert Horizon Capital in their venture into the private equity realm.
Leveraging the Comprehensive Database to the Fullest
While Craig and Kamran are still looking for the perfect opportunity, their exploration with Inven has already yielded some promising prospects.
They’ve mainly used Inven to compile lists of companies in their desired sectors. The merits of incorporating Inven into their strategy quickly became evident for Desert Horizon Capital.
"There was especially this one company we found on Inven that we were interested in buying. It’s a financial services company, which actually was not on any other platform, " Craig told.
Although that exact company turned out to be larger than what they wanted to acquire, the conversation took a surprising and advantageous turn.
“We were able to build a win-win partnership with the company which eventually unlocked a new source of deal flow for us,” Craig continued.
On top of that, Craig revealed that they have started discussions with a few other firms they’ve found through Inven.
In essence, Inven has been instrumental in opening up avenues for Desert Horizon Capital that might have remained unexplored otherwise. The platform's expansive and accurate database, coupled with its user-friendly design and innovative features, has proven to be a game-changer for the firm as they continue their venture.
Tips from Desert Horizon Capital for Acquisition Hunting
1) Don’t overlook cold outreach
Even though personal networks and business brokers are valuable channels for finding acquisition opportunities, those are not the only ones. Craig and Kamran emphasize the potential of cold outreach as well.
This involves directly contacting companies that aren't currently on the market but might be open to negotiation. Although it may seem like a long shot, this approach can uncover hidden gems and lead to unexpected opportunities. It's all about being proactive and taking the initiative to reach out.
2) Leverage AI to boost efficiency
Building that proprietary deal flow and cold outreach layer can be time-consuming. There are also way too many companies and websites to go through for any single person or team. That’s where technology comes in.
Desert Horizon Capital has found value in harnessing the power of artificial intelligence through platforms like Inven. AI-powered deal-sourcing allows them to build company lists fast, and find companies in their desired niche without having to go through tens of google search pages and hundreds of websites. Leveraging AI allows them to focus their efforts on the most promising leads. Merely considering the significant time savings alone validates a positive return on investment for the software purchase. That's without even factoring in the added value of identifying the ideal deal.
3) See opportunities even in a “no” answer
A "no" answer isn't always a dead end. Sometimes, it can open up new avenues for collaboration or partnership. Desert Horizon Capital experienced this firsthand when they approached a financial services company for acquisition. Although the company was larger than what they were looking to acquire, the conversation led to a mutually beneficial partnership. So, even when an acquisition doesn't pan out as planned, keep an open mind. You never know where the conversation might lead.