10+ hours of podcasts, in 5 minutes.
10 quotes from 1 episode on Private Equity Funcast, each with a timestamped link to the source.
Amanda Blank points out that acquiring medical spas demands intricate legal structures to comply with healthcare regulations. Extracting cash flow requires master services agreements that sweep funds from 100% doctor-owned professional corporations into a management organization.
Building an institutional medical spa platform is legally complicated enough that several law firms refused to take the work.
“I was turned down from a few legal firms and who said this is too comp…”
Presenting a transaction to the existing clinic staff directly yields significant operational lessons for the acquiring company.
“I mean then we came to the company we made the announcement like hello nice to meet I mean learned a lot from doing that announcement…”
Washington state requires clinics to remain entirely owned by licensed doctors. Buyers extract value by using a master services agreement to sweep cash from the doctor-owned practice to a management organization, racking up millions of dollars in legal fees.
“…the PLLC's are 100% doctorowned in the state of Washington.”
“…the master services agreement and it sweeps the cash from the PLLC's to the MSO.”
“I'd be spending millions of dollars less on legal but it unfortunately is healthcare…”
From Amanda Blank on Med Spa Roll-Ups and Bad Market Research
Investors misunderstand the actual customer acquisition funnel. Standard reports project Botox as the first purchase. Amanda Blank states the actual entry points are lower-friction treatments like hydrofacials and laser hair removal.
“The report said, you know, women's first foray into med spas is going to be injectables, Botox. And I'm like, it's probably like a hydroacial or laser hair removal.”
From Amanda Blank on Med Spa Roll-Ups and Bad Market Research
“…there's such a disconnect between people who are investing and looking at these businesses and people who actually understand these businesses.”
From Amanda Blank on Med Spa Roll-Ups and Bad Market Research
Buyers test the quality of services and inspect operational consistency by acting as anonymous customers before committing capital to a transaction.
“Oh, I should have mentioned in that deal process I did a little secret shopping. You got to go test the quality of the services.”
“First step is finding a company to buy.”
“We created an SPV acquired the or SPV that held an new cos.”
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