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Continued: Flying out of the corporate safety nest

  • Article by: TODD NELSON , Special to the Star Tribune
  • Last update: October 14, 2007 - 5:15 PM

Goldberg had known Tom Lyons, president and founder of Faelon, through professional networking for a couple of years before she began working at his firm last June.

That idea came after she read a profile of Lyons and Faelon in this column last March.

In that piece, Lyons made a point of saying he hoped to recruit a couple of younger partners-to-be as part of his own exit strategy. (A second newcomer, Mike Hart, also joined Faelon after reading that earlier column, Lyons said.)

Goldberg, a graduate of William Mitchell College of Law, had practiced law for 15 years before joining Faelon. "I had been doing some soul-searching, I guess, about frankly what was fulfilling and where I wanted to grow in my career," she said. "I loved the people I worked with, but there was something missing. I just wanted to have deeper relationships with my clients."

As a business broker, Goldberg can use her legal experience to help business owners make sure they're asking the right questions of their accountants, financial planners, trust and estate attorneys and other professionals before they sell a company.

At Faelon, Goldberg works largely independently to find and close deals on her own.

Taking the gamble

McGregor, who describes himself as something of a gambler, took what may be the biggest gamble of his life in September 2006, when he left his corporate position to start his private equity fund.

He wrote a private placement memorandum and within 60 days attracted more than enough investors to raise the money he needed to open Rational Equity. He and his wife, who have two children in college, also put a good deal of their savings into the fund.

McGregor wants both to acquire a company and, in a departure from most private equity firms, run one.

He is targeting software companies with $5 million to $25 million in revenue that would sell for up to $20 million.

Once he buys a company, he will move to wherever its headquarters is and oversee operations. "A lot of the companies I look at are stagnant," McGregor said. "They're looking for the entrepreneur who probably started it to leave and get a fresh start from someone who has done this before and would have a vision. That's my competitive advantage against another private equity fund."

Through internal growth and further acquisitions in the same field, Rational Equity would have a bigger, more successful company to sell at some future date.

"I made a lot of other people a lot of money," McGregor said. He's looking for his turn now.

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.

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