An Alternative Path to Entrepreneurship

UCLA Anderson lecturer Kent Weaver (’99) is the founder and CEO of Granite Point Partners, a private investment company that acquires, manages, and builds small to medium-sized businesses. A graduate of USC with a degree in finance and a one-time Pepsi executive, he was working as a product manager at a software startup — his first professional entrepreneurial role — when he enrolled in UCLA Anderson’s Fully Employed MBA program. A class taught by Professor Al Osborne altered his career path.

“I took Al Osborne’s class focused on buying small businesses, and he became a mentor to me,” Weaver says, nothing that he became a TA for the course. “I just loved the class. It turned on a lot of light bulbs for me on what life after business school might look like, and it laid out a path toward entrepreneurship.” Weaver says that when he graduated from Anderson, he felt motivated to go down the entrepreneurial acquisition path, and he ultimately found a small health care company to purchase in Sacramento. He moved north with his family and worked as a CEO for nine years.

Since then, he’s continued along that path, investing in, growing and selling various companies. He also joined the faculty at his b-school alma mater when Osborne, founder of the Price Center for Entrepreneurship & Innovation and now professor emeritus, asked him to teach a course in entrepreneurial acquisition. Now Weaver inspires current Anderson students much as his mentor Osborne inspired him.

Q: If someone asked you, say, during an airport layover to describe your class and its goal, what would you tell them?

The class provides students with an introduction to an alternative path to entrepreneurship by purchasing an existing company much like I did, rather than starting from scratch. A lot of people don’t know this path exists. Then, throughout the class, we help students further understand how to purchase a company, how to finance it and how to begin the process of building a company and a business.

Q: It’s valuable that you’re teaching from experience. In addition to what you bring to the course as an entrepreneurial professional, what type of materials are used in the course?

I start by trying to bring great energy to the class, I’m very excited about this work. We use case studies from Harvard Business School, UCLA and other business schools, and some we’ve custom written for the course. This is still an emerging area in an MBA program.

I have done this work for over 20 years as an operator, researcher and investor. So there are anecdotes and stories from my career I can share with the students that are practical and pragmatic.

We also invite guest speakers, including several with a UCLA Anderson connection.

Q: Let’s brag a moment. Could you tell us who they are?

Sure, there’s Fiona Yu (’21), a star student from our “first search” class, who recently purchased a Madison, Wisconsin-based business called Kollath CPA. Sam Swan (’20) was a TA for my first class, and he ended up purchasing a work management software business called TaskRay. There’s Derek Kozacko (’92), who has bought and sold multiple business over the years. Giacomo Prandelli (’23), who is part of the senior leadership at a niche software company called Higher Me, has spoken in the class. Alex Wang (’01) was CEO of two self-funded search companies and now invests in them through his company, Riviera Capital. And there’s Martin Lopez (’22), who also took the class and was a TA. He conducted a search and just bought a South Florida dry cleaning service called Dryeco.

Q: There are startups and there are big companies or individuals who purchase other large, existing companies. One is a type of entrepreneurship-from-scratch, and the other is a matter of high-dollar acquisition. This course seems to be teaching about a phenomenon that’s somewhere in between. So, what type of companies are you talking about — companies that, when purchased, are still considered entrepreneurial ventures?

These companies have profiles that are usually between two and 25 million in revenue. They’re beneath the radar of private equity of a leveraged buyout, or LBO, fund. But they’re a little bigger than what a solo entrepreneur would buy, and they’re run like a mom-and-pop business. They’re younger and more formative, so the emotions and stresses an entrepreneur there goes through every week have a different look and feel than they would at someplace larger.

In class we spend time talking about how to form the search for an entity and how to raise money from investors. We discuss who the right kind of investors are to support and give nourishment to a young entrepreneur looking to go down this path.

One of the big questions is, strategically and tactically, how does one search for a company and what does a productive search look like? So, we look at how to evaluate a company and conduct industry analysis. We leverage tools that students have learned in other classes, like performing a Michael industry analysis.

We ask, “What are some of the company characteristics that that bode best for this type of entrepreneurial journey?” We dig into types of revenue quality, unit economics, margins and cash flow generation. We leverage financial models and we talk about how these companies build value.

Q: What are some the class requirements, and what kind of vibe do they generate among the students?

There’s a heavy emphasis on participation in class. We discuss situations a lot, we debate. A lot of this journey is great, but it doesn’t fall nicely into a textbook chapter. It’s entrepreneurship, it’s rangy, there’s a different kind of edge to it. So we’re talking a lot in class, unpacking situations together, collaborating and drawing conclusions together that sometimes don’t form perfect answers.

The speakers in class are like North Stars, providing guidance and a form of nourishment that you just can’t get from reading about this subject. We do a lot of things that are outside the box, like reading real-life confidential memorandums that were written by real entrepreneurs, that are not sanitized, and we’ll debate and unpack things that have a lot of ambiguity to them.

The most popular class every year has been when we bring in real-life investors. The students pick a company and they present to the investor for a whole class meeting, pitching why they should make a deal. Then we all come back in class together, and we facilitate a discussion about how that went, the goods and the bads, and what we learned. We have a lot of fun, but it’s a lot like real life, and the students get some really incredible feedback.

Every year the finale is an Anderson-only speakers showcase made up of entrepreneurs that have gone down a path like this. It’s a panel format, and we usually have a searcher, an operator and an investor. We try to coalesce around all the things we’ve learned over the prior nine weeks. We unpack their stories and we give the students time for a full a Q and A session.

Q: Let’s say I’ve passed your class, I earned an A. What am I qualified to do now that I wasn’t able to do three months ago?

For the students that decide to pursue an entrepreneurial path, there’s now a playbook. There’s more of an understanding of real-life tactics. But even for students who don’t go down that route, there’s a deeper appreciation of the spirit of entrepreneurship. There’s an entrepreneurial edge to the class that they can take with them.

We deepen our knowledge about how to look more analytically at industries and what’s good quality about a company’s characteristics and how those factors link to value creation.

By the end, we’ve talked a lot about decision making and we’ve tied together lessons from this class and other classes the students have taken, and we’ve brought them all together. Remember, a lot of these lessons apply whether you’re working with clients as a consultant, or you’re in private equity or investment business, or on the entrepreneurial side of a big company.