Tin Drum Acquisition Shows Difficulty When Buying from Founder
Entrepreneurs do not like to give up equity, points out Scott Pressly, managing partner with Buckhead Investment Partners in Atlanta.
Yet his private equity firm recently bought two concepts, Tin Drum AsiaCafe and Tropical Smoothie, from their founders. He detailed the delicacy of that task in an interview as the year waned, and nominated the deals for the new Franchise Times Dealmakers project.
“Price was not a main topic of discussion. When you buy from a private equity firm, price and liquidity are the big issues. Here, it’s their baby; it’s their brand. They have to believe that I’m going to grow this with the ideas we can bring,” Pressly said.
Steven Chan is the founder of Tin Drum, and he’s an architecture major from Georgia Tech who had never had a partner before talking with Buckhead, Pressly said. “It took six months explaining” what Pressly would do for the brand before Chan would agree to sell a minority stake.
Buckhead bought a majority stake in Tropical Smoothie from the founders, and moved the headquarters to Atlanta. They are working to "professionalize" the company to allow for faster growth, Pressly said.