About the interviewee
David Mahmood – Chairman/Founder Allegiance Capital
Over the last 25 years, David Mahmood has served as an investment banker managing hundreds of complex, multi-million dollar transactions in North and South America. His 45 years of experience, ranging from Fortune 500 companies to entrepreneurial start-ups, gives him first-hand knowledge of a wide variety of business transactions. His ability to create and engineer financial transactions has provided Allegiance Capital with a strong following, including both business owners and shareholders.
Mr. Mahmood launched his career in the Twin Cities of Minneapolis and St. Paul, where he was born and worked for a variety of Fortune 500 companies. His early business career included:
Creating and developing the Hoyle Playing Card Company by age 28
Serving as vice president and director of sales for Brown & Bigelow, at the time the world’s largest specialty advertising company
Earning the distinction as the first licensee for National Football League and American Football League posters
Working as vice president and director of marketing for CPS Industries, an international consumer products company
He has served on numerous boards and industrial groups and is a member of Who’s Who in Business and Who’s Who Worldwide. Mr. Mahmood has been a frequent keynote speaker for national and international trade organizations and universities, and he has been featured in numerous publications.
Tell me about your firm (number of employees, location, type of companies you work with, etc.).
Allegiance Capital has approximately 50 employees. The corporate office is located in Dallas, TX, with offices in New York City and Chicago. Our clients are the owners (CEO’s) of privately held or closely held middle market companies with annual profits of $5 million or more.
We work with all industries and this year we have already closed seven transactions valued at almost a half billion dollars. Most recently, we sold companies in the following industries: oil field services, healthcare, telecom, and retail.
What type and size of companies do you have as clients?
Our clients are the owners (CEO’s) of privately held or closely held middle market companies with annual profits of $5 million or more.
We work with all industries and this year we have already closed seven transactions valued at almost a half billion dollars. Most recently, we sold companies in the following industries: oil field services, healthcare, telecom, and retail. We work both domestically and internationally. We are also members of a global organization that includes 36 M&A firms located in 28 countries around the world. This helps us market client companies to international buyers and to assist other international firms when they are seeking buyers in the U.S.
What comes to mind when you see this topic? When you must pitch to the mid-market enterprise.
#1 The most difficult issue is identifying CEO’s of middle market companies who are ready to either refinance their company or sell part or all of their company. Also finding those who make more than $5 million in annual profit narrows the field even more and makes it even more difficult.
What comes to mind – You have to have extremely accurate information sources and databases that can identify the companies and the owners. If you don’t have accurate information you will have issues contacting the CEO’s.
What are the best practices when it comes to this issue?
Purchase the best database services you can find and ensure they provide accurate information.
Owners want useful information they can use to make a decision. That is not always a sales pitch. We spend a lot of time educating potential clients about their options and what will be involved in the sales process before they become a client. This ensures we understand their personal and financial goals and it also ensures they understand what they are about to go through during the process.
Experience counts – successful owners want to work with experienced people who can empathize with them and understand what they have been through to build a successful company.
Honesty, trust and confidentiality – if you are not honest you cannot build trust and without trust you cannot get a deal done. They also have to know that confidentiality is a given and they do not have to worry about the information they provide.
Hire Business Development people who can establish trust through phone conversations, letters and emails. While sales skills are important, relationship building is often more important than sales.
Tenacity and persistence – sometimes it may take 2 – 3 years of working with an owner before they become a client. You have to build a strong pipeline and continue to work the warm leads over a long period of time.