Last issue, I wrote one line I now have to live up to:
So I'm going to Italy.
Here's what happened when I pitched my plan to a private equity fund in the UK.
It took them one question to find the problem.
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"Would it be you leading the business as sort of CEO?"
No.
The plan, the way I put it to them: buy a small Italian business that makes things for luxury brands. Bring in an experienced operator to run it. I'm involved, getting stuff done. I'm not the CEO.
Why not run it myself?
Because I'm young, I don't have the pedigree yet, and that business needs domain knowledge I don't have. There'd be a lot of challenges in me becoming CEO without someone older and more experienced involved.
I said exactly that.
They said no.
Twice, actually.
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The two no's
No #1: wrong country.
I asked to make sure. They only invest in UK businesses. Italy isn't the UK.
Deal over in one sentence lol.
No #2: nobody running it on day one.
This is the one worth your time.
They back management teams that are already inside the business. Bringing in a brand new CEO is rare for them. And my structure doesn't even have the CEO yet.
Then this:
It's not that I don't believe that works, it's just not what we tell our investors that we do.
Read that twice.
The no wasn't about me. It wasn't really about Italy. It was about a promise the fund had already made to the people who gave it money.
Every fund has one. Most will tell you what it is if you ask.
When the call ended I said one thing out loud:
good thing I didn't go in person.
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The exception that tells you what they actually want
I asked what would work.
They will back a CEO who wants to leave after eighteen months, as long as that CEO ties a big part of their own wealth into the business and rolls equity, so they still have "skin in the game."
So it's not age. It's not even experience.
It's: who is already in the building, and what do they lose if it goes wrong?
My plan has no answer to that yet. Which means the first job in Italy isn't finding a business.
It's finding the person who'd run it.
That's what this trip has been about. Where it's taken me so far, and where it goes next:
Oct 2: Milan
Oct 5: Rome
Oct 7: Bologna
Oct 9: Milan
Oct 10: Mallorca
Oct 13: Barcelona
Oct 21: home
It's been amazing so far. I've met brokers, lawyers, consultants and, of course, investors and business sellers.
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So why Italy at all
Here's the thing almost nobody outside Italy noticed.
Between 2020 and 2026, three groups bought up roughly sixty family workshops that physically make clothes for Europe's luxury houses. Knitwear. Embroidery. Leather goods. Shoes.
One of them started in 2020. Three years and 26 companies later, a private equity firm bought a majority at a valuation above €1 billion.
The size of what they bought?
One of the workshops these groups bought: €2.5 million revenue, 30 employees.
Thirty people is the unit of a billion-euro roll-up.
And they didn't buy the cheap ones. The CEO of the billion-euro group, on what they buy: no turnarounds, "the companies in the group are all healthy." Same lesson as last issue, from a different country.
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The asterisks
A thesis without its problems is a pitch. So:
The customer is also the competition. The big luxury houses are buying suppliers directly. One of them took stakes in three in a single spring. The houses you sell to can just buy your supplier.
Lots of workshops, the same few customers. Every one of them sells to the same dozen houses. That's concentration, not diversification.
The market turned in late 2023. The slowdown that makes owners willing to sell also hits whoever buys them.
I'm not the CEO. Which is exactly the thing the fund wouldn't back.
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What you can steal
Before your next call with anyone holding money, an investor, a fund, a lender, write down three things:
Where they invest.
How much they write.
Who they expect to be running the company on day one.
If you don't match all three, stop pitching. Ask for the referral instead: "Is there anyone whose thesis fits this better?"
I did. I got one name.
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What I want from you
If you bought a business tomorrow, would you run it yourself or hire someone to? One line is fine. No deal experience needed, I'm asking about you.
Hit reply - I read everything.
Selling a business? [email protected] - tell me what it does and what it makes.
Want the Indian deals themselves rather than the reasoning? That's Kautilya's India Deal Sheet — what's actually for sale, every week.
Further along, and want someone to find and buy one for you? Reply "Kautilya".
– Dev
P.S. - The fund said no in one sentence. Then it gave me a name. Always ask for the name.
