Kevin Cassidy

88 posts

Kevin Cassidy

Kevin Cassidy

@kevinpcassidy

Matthew 7:7-8 | Founder of Hanging Valley Holdings

New York, NY Katılım Mayıs 2025
423 Takip Edilen510 Takipçiler
Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
“Venture capital has created the biggest businesses in the world and private equity has not” - @jeremygiffon This comes down to the cost of being wrong. In VC, the fatal mistake is passing on the winner. In PE, the fatal mistake is buying the loser. That’s why VC takes many shots. One outlier pays for the portfolio. PE takes few, deliberate shots because there is no outlier coming to bail out a bad deal.
Patrick OShaughnessy@patrick_oshag

My second conversation with @jeremygiffon. His first episode became one of the most popular we've ever done. Since then he's become a friend I talk to every day, so this is a taste of one of those conversations. We discuss: - The billion dollar PDF - Why billionaires have become subservient to the "poaster" class - The philosophers who secretly shaped Silicon Valley - Lessons from the last 18 months in private markets - East v. West coast finance - Buffett + beating the market - and much more Enjoy! 0:00 Intro 5:50 The Billion Dollar PDF 11:31 Algorithms and Power Laws 20:28 Peak Guy 31:19 Opting Out of the Timeline 36:14 AI and White-Collar Jobs 43:31 The Next Era of Finance 53:56 The New Economics of Software 1:03:22 Underwriting Emerging Managers 1:18:17 Silicon Valley’s Hidden Philosophy

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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
@TheIcahnist Search funds and independent sponsors are the most disadvantaged buyers in an auction process x.com/kevinpcassidy/…
Kevin Cassidy@kevinpcassidy

What a lot of people fail to realize about ETA or being an independent sponsor is that you are the most disadvantaged buyer. Many people come from PE firms or strategics and assume it will be just as easy to close a deal on their own. However, you no longer have a capital base, credibility with the counterparty, and most notably, the ability to pay up. You have the highest cost of capital. Oftentimes your LPs have LPs, so your LPs need a much higher return to be able to collect fees and achieve their DPI target. You also have no synergies and in fact have the opposite, as you will likely be adding G&A and fees to the business day one. All of this moves your bid lower and makes an auction process for a quality company incredibly difficult to win.

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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
Great read on the IS market. Data may not be 100% accurate, but I do believe the flexibility and often more focused approach of the independent sponsor model can allow for superior risk-adjusted returns in the LMM. Below are a few great highlights: “Our performance analysis shows that independent sponsor investments have generated strong absolute returns and, more importantly, competitive-to superior relative performance compared to matched non-IS buyout transactions” “suggesting that higher returns are driven by greater upside rather than lower risk. These results are consistent with the hypothesis that independent sponsors are able to exploit informational frictions, sourcing advantages, and bespoke structuring opportunities that persist in smaller and more complex private companies.” “Independent sponsors appear to represent a differentiated channel for accessing less intermediated deal flow while delivering attractive risk-adjusted returns comparable to, and often exceeding, those of traditional buyout strategies.”
John Caple@BigJohn043

Thought this was pretty interesting. I am a bit skeptical about the data set. IS investors all tell me that the loss rate is higher because when a deal goes bad the sponsor has limited incentive to fight. I am also skeptical about the small loss rates just given the size of the deals and the multiples they are paying.... uncipc.com/publication/in…

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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
@LoganARobison The timing does not matter for you. What you need is a meal plan you don’t deviate from and to train to failure. Could probably do with less cardio unless you enjoy it.
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Logan Robison ⚡️
Logan Robison ⚡️@LoganARobison·
Health/fitness question: I'm 6'2" and weigh 185lbs. I lift M, W, F, S and run T, Th. Probably 20% body fat My issue is I tend to overdue it on the snacks. My solution has been to restrict eating from 11am - 7pm. However, I like to work out in the morning (6am) which means I'm not getting protein until 4 hours after my workout. Is it an issue that I'm not getting protein until 4 hours after my workout? I think the benefits from fasting and calorie control probably outweigh the negatives of delayed protein but not sure
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
What a lot of people fail to realize about ETA or being an independent sponsor is that you are the most disadvantaged buyer. Many people come from PE firms or strategics and assume it will be just as easy to close a deal on their own. However, you no longer have a capital base, credibility with the counterparty, and most notably, the ability to pay up. You have the highest cost of capital. Oftentimes your LPs have LPs, so your LPs need a much higher return to be able to collect fees and achieve their DPI target. You also have no synergies and in fact have the opposite, as you will likely be adding G&A and fees to the business day one. All of this moves your bid lower and makes an auction process for a quality company incredibly difficult to win.
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
@tom_sietsema Buying smaller with less revenue and employees is also generally riskier. These deals are more expensive and of lower quality making the risk adjusted return less attractive.
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Tom Sietsema
Tom Sietsema@tom_sietsema·
So the median searcher today is paying ~70% more than in 2006 for a company with less revenue and half the employees. The whole community converged on high margin, low headcount and now pays 6-7x for what used to trade at 5x. You can see the crowding in the funnel data. In the 2007-2010 cohorts, 86% of funds that concluded bought something. Recent cohorts are under 50% with record capital raised. Sourcing didn't get harder there are just a thousand people screening for the same business. The 49% IRR vintages were buying at 5x. At that entry price the structure does most of the work - debt paydown and a turn of multiple expansion get you a long way before you've improved anything. At 7x that engine is much weaker and the exit arb thins out because you're already paying close to what the next buyer up pays. The recent cohorts showing decent IRRs are mostly unrealized marks on short holds. The employee number is what's more interesting to me. Many searchers know they can't manage a 60-person blue collar workforce, so they bid up the businesses that don't require it and avoid the ones that do.
Justin Mazeka Vogt@J_M_Vogt

How is the market for search funds changing? These charts tell the story

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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
PE is this generation’s doctor/lawyer track. It’s prestigious, structured, hierarchical, and well paid. But it is not a moonshot. If you’re entering PE today expecting to be flying private with a penthouse and a $10mm second home at 35… that’s a pipe dream.
Restructuring__@Restructuring__

Incredible timely post on how Private Equity is really crowded at the top and how seniors will never leave Made only $2mm of carry after many years in MF PE "PE is the new very well paid corporate job, however will demand genuinely 2x the hours and 5x the stress of a regular one"

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Jesse Tinsley
Jesse Tinsley@JesseTinsley·
Imagine telling someone in 1999… The year is 2026. The President is Donald Trump in his second non consecutive term. The richest man in the world is PayPal cofounder Elon Musk… but not because of fintech or Paypal. Because of rockets, electric cars, AI, satellites, brain chips and something called “Boring Company”. Apple is worth trillions but its main business isn’t computers… its selling glass rectangles everyone stares at for 9 hours a day. People don’t watch TV. They watch teenagers explain geopolitics, finance, and relationship advice in ~60 second videos. The biggest taxi company owns no taxis. The biggest hotel company owns no hotels. The most powerful media companies are social networks where everyone argues with strangers for free. Kids are making millions filming themselves playing video games. AI Robots write emails, code, legal memos, songs, essays, and breakup texts. The internet is mostly bots arguing with humans who are trying to prove they aren’t bots. You can summon a car, groceries, a doctor, a date, a private jet, or a dog walker from your phone. People pay real money for invisible currencies, digital monkeys, AI girlfriends and pictures that disappear after 24 hours. The richest companies in the world don’t sell oil, steel, or cars. They sell attention, compute, data, and addiction. And somehow, after all of that everyone is still using Excel.
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
Funny how self-funded searchers scoff at businesses with no barriers to entry… when search itself has none
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
If you play small games, you win small prizes
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Kevin Cassidy retweetledi
jay plemons
jay plemons@jayplemons·
David Sacks just delivered an economics masterclass on Elon becoming the world’s first trillionaire. @davidsacks: “People see the headline and imagine Elon suddenly has a trillion dollars in the bank. That’s not how it works. His balance sheet didn’t change overnight.” Why? The real point is deeper. Wealth isn’t in the “stuff” we consume. Food, shelter, clothes. Things that depreciate and disappear. It’s in the machines that create stuff for decades: tools, workflows, and corporations. These are the true engines of human progress. “If you create a machine that makes more stuff, then there’s a discounted present value for all the stuff in the future that machine might create. That’s where the wealth comes from.” Elon started with nothing. An immigrant who slept on the floor building Zip2. He created these machines from vision and relentless effort. Thousands joined him, including a SpaceX welder who turned his labor into a million dollars in stock. That’s the magic of tech and free markets: labor can become capital. It’s fluid. The outrage misses this entirely. The people building machines that deliver medicines, energy, and abundance are creating lasting prosperity for everyone. What do you think? Does viewing wealth as future productivity change how you see stories like this?
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
Well said @chamath All the excess, especially the kind you see on Instagram, doesn’t signal high status or elegance. In fact, it does just the opposite…
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
10:30am has to the the best time to the hit the gym
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James Chanos
James Chanos@RealJimChanos·
This isn’t even remotely true. $AMZN went public in 1997 at a $450M valuation, or 3x revenues. $GOOGL went public in 2004 at a $23B valuation and at 7x revenues. $META had a $104B valuation in 2012 at 20x revenues(and immediately sold off almost 50%). SpaceX dwarfs these numbers.
The_Real_Fly@The_Real_Fly

"BUYING SPACEX, OPENAI AND ANTHROPIC AT IPO WILL BE LIKE BUYING $AMZN, $GOOG OR $META IN THE EARLY DAYS."

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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
Dropping your fear of being cringe might be the best decision of your life
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Kevin Cassidy
Kevin Cassidy@kevinpcassidy·
Everyone and their dog is looking to buy a small business. The barrier to entry is effectively zero as capital is currently abundant.
One Man LBO@OneManLBO

When @Sam_Rosati officially changes guidance and recommends proprietary deal sourcing from day 1 (in conjunction with brokered deals), you listen up Also, great anecdata from @JackieHirsch_ on deal interest in this market 150 NDAs within 24 hours? INSANITY (Hearing similar numbers from intermediary contacts here in... IDAHO, not even close to a tier 1 coastal market) If you think brokers have time for relationship building in the heat of a live deal, you are sorely mistaken. They're just trying to survive and triage. So proactive relationship building is once again key across both brokered and proprietary sourcing. Highly speculative, highly long-term oriented. So freaking challenging to make friends and plant seeds. How do you even know how to allocate your limited time anymore? Which brings me back to one of my core tenets: you need a thesis in this market, whether it's geography or industry focused (I had both last year), so you can even start to understand where you should be making friends and build relationships. This small business buying game is shifting further and further away from the actual transaction. You need to be so early now. It's almost VC-like in terms of speculating which broker or owner may have a good deal down the road and getting ahead of it, WAY further up in the funnel. Sourcing timelines are extending, and I know several good and talented people who are in year 3 of searching now. WELCOME TO ULTRA HARD MODE

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Keşfet

@jeremygiffon @TheIcahnist @LoganARobison @tom_sietsema @jakepaul @altcap @JesseTinsley @davidsacks