UPDATE: Why did I do this?
Adventures in Executive Education
A year ago, I completed an executive education course on the subject of Private Equity at Imperial College London.
It was genuinely one of the hardest academic experiences of my life – I barely got through it!
What’s happened in the year since? Here’s the original blog plus an update on how I’ve used what I learned.
Back to 2021...
“It’s very simple, estimate the unlevered cost of capital from CAPM. The WACC assumes a constant D/E ratio and uses after-tax cost of capital. Find the DCF…”
I briefly turned off my camera on Zoom to hang my head and scream softly in frustration.
Why was I doing this to myself?
In May, I signed up for the Private Equity course at Imperial College London’s executive education program. Spark Compliance’s facilitated training game software, Compliance Competitor, was growing so fast that I was (and am) considering venture capital to grow it. Spark Compliance had been hired by a private equity firm to review compliance at its portfolio companies, and several of our new clients were private equity-owned.
I had two objectives. First, I wanted to understand the words used by the private equity folks. In my experience, correctly using industry words makes people feel you understand them and are one of them. Second, I wanted to learn how people in the private equity firms think about deals.
Imperial College advertised the class as being for:
People already in private equity looking to expand their careers.
People in finance interested in transitioning to private equity firms.
CEOs and executives at companies that might take venture/private equity money.
Bingo! Number three applies. I applied for admittance and was thrilled to be accepted. As I filled in the credit card form, I noticed that the sign-up page had a note that said, “this class will not focus heavily on valuations. You do not need a finance degree to take this class.”
Well, that was good since I had a law degree and a film and television degree.
Decades since I took a math class
True confession: the only time I got a near-failing grade (D) in my entire academic career was in math the spring semester of my junior year of high school. I didn’t understand the concepts at all.
My undergraduate degree required two math/science classes. I took microbiology and astronomy. I thought math was behind me for good.
Turns out that running a company requires a fair amount of math. Usually the math is pretty simple – revenue minus expenses equals profit. I thought I’d be relatively prepared for the private equity class. I was wrong.
Wanting to give up
The first week of the private equity class was pretty good. We did a case study and I was able to contribute from a non-finance perspective. People in the class didn’t consider sanctions issues or bribery concerns in the deal, so I felt good about having something to add.
By week three, the math descended. I spent hours on Investopedia trying to understand the words being used because not understanding them meant I couldn’t start working on the equations.
By week six, I was burned out and frustrated. I flirted with the idea of giving up. This class was taking eight or more hours of my time per week. That meant giving up significant chunks of time on weekends or working late into the night. It was exhausting.
When it was darkest, I posted to my class’s WhatsApp group about my frustrations and feeling defeated. A classmate sent back this message, “I’m actually learning so much from you Kristy. This includes how you are responding to whiteboard questions. You are helping me (from a non-finance background) to understand many of the concepts. Don’t feel demotivated. You are truly inspiring me to stay the course.”
Wait, I was making a difference? Really?
Choosing to Stay
I realized that my objectives were being met. I was learning the words, even if I had to look them up six times. I was learning how private equity firms think about deals. I decided that even if I failed the course, which I was pretty sure I would, I had come here to learn and I was. I chose to see it through.
Getting to the Finish Line
I finished the class in August and was elated when I learned I’d passed. My certificate made me genuinely proud.
Am I ever going into private equity as a career?
But foraying into an area where I was deeply uncomfortable helped me to grow. Meeting new people in a totally different field expanded my network – especially when you consider all of the contacts-of-contacts I now have access to.
I’m always advocating for us in the compliance field to keep learning and growing. While at times it was painful, it was worth it. And, strangely enough, I can do the DCF and WACC calculations now. My certificate proves it.
What’s Happened Since…
It’s been an exciting year.
I was approached twice by parties interested in opening discussions to buy Spark Compliance, one backed by private equity, the other by angel investors. Because of my private equity class, it was easier to evaluate the deals. This included the review of the proposed structures, timeframes, expectations, and, with the case of the private equity-backed buyer, the synergies in their portfolio of companies. (we aren’t selling)
Compliance Competitor (Spark’s innovation-award-winning online training game for high-risk employees) has caught fire. It even has its own dedicated salesperson – a first for Spark. We’ve been approached by investors and are continuing to consider whether we should take capital and whether that’s a good fit for us. Because of my class, I have a much stronger understanding of what that entails and what it will mean for the company.
More than anything else, I’ve become more confident in my businesses. My expanded knowledge of math, investment strategy, and business structures has made me a more competent businesswoman.
Would I do another private equity course?
A year ago, I’d have said absolutely not! But now, maybe. Never say never…
CEO of Spark Compliance Consulting
Kristy Grant-Hart is the founder and CEO of Spark Compliance.
She’s a renowned expert at transforming compliance departments into in-demand business assets.