Three of a Kind: Generational Equity, The March Group and RSM Equico

Eddie Grogan has been to all the M&A seminars. He owns a business and would like to sell it some day for maximum dollars. He’s accepted invitations to attend free seminars from three firms: The March Group, GW Equity and RSM Equico.  He says the message and sales pitch of each are virtually identical.

The business model was pioneered by the late and notorious Geneva Companies – a firm that was the target of a class action lawsuit that claimed that it was little more than an up-front fee collection scam. The Geneva employees generally went to … or ended up at … three firms – The March Group, GW Equity (now Generational Equity) and RSM Equico. These firms run a seminar-based business model and collect a significant number of up-front fees.  The question is what percent do they sell?

My guess is 5% or less actually end up selling.

According to Grogan, the messages of each are identical: “Limited auction selling”, “overseas buyers” and “just a year or so left and then this great window of opportunity to sell your business will have passed.”

It’s also “pay us $30K up-front today and we’ll send you a nice valuation report. Oh, and we’ll also use our best efforts to sell your business … but no guarantees.”

Mr. Grogan called me last week and shared his experience with me.  He so very badly wants to believe that if he just pays $30K (or whatever) then he’ll get millions in return.  But, down deep, he knows that his business is probably not worth what these firms are saying they could get for him. He knows that his father was right, that there’s no free lunch.  But, darn it, why not just one free lunch?!

Trust me.  If it sounds too good to be true, it is.  The United States is the wealthiest country in the world. Do you really think that there are some overseas buyers just waiting to pay you millions for your little U.S.-based business?  Yes?  Okay, then pay the retainer and then call me in a year or two and share with me the result. I’ll share your experience on my blog.

PS. So what about the examples of big dollars they’ve achieved for past clients?  First, don’t ever assume that the facts are fairly presented. These firms have one thing in mind and you know what that is.  Second, if 10 clients out of 500 sell each year, surely they can find one or two a year – for a total of 10 from the past 5 years – that are worth presenting to prospects. The question is, are you prepared for the low odds?

PPS. If any of these firms are willing to prove to me that any of the above is untrue or unfair, I’ll readily correct the information and/or assertions here.

PPPS. If you have been a customer or employee of any of these firms, please call me (918-760-2715) or email me (dperkins@acquisitionadvisors.com) to share the facts of your experience.

PPPPS.  Please know that I, through my firm, also consult on the purchase and sale of private companies.  To that end I could be considered a competitor and therefore writing these things for competitive reasons.  This is simply not the case.  There are hundreds – even thousands – of firms that consult in this area.  I only select and write about these three here — using my right of free speech — because of what I think are questionable practices. And because my passion and my business is serving owners of private companies.