For Men’s Cosmetics, the Timing Was Right For Investment – NY Times

When an intermediary told them about Menaji, Ms. Viglielmo said they thought the timing was right for men’s cosmetics. The taboos about men’s wearing makeup — known as color in the industry — were fading, she said. “You have older guys in the workplace and men dating at different ages,” she said. “These products are needed.”

To me, the bigger question was, What do a beauty consultant and two finance guys who spent most of their careers at a large firm know about running a company? I wanted to test their assumptions with more seasoned advisers while also identifying the common mistakes that such D.I.Y. private equity teams make.

SELECTING THE INVESTMENT Before investing in Menaji, Mr. Fisher said, the team spent almost a year doing due diligence. That was on top of the nearly two years the group had spent looking for a company in which to invest.

“We resisted the temptation to move quickly or else we would lose the opportunity,” he said. “We needed time to perform thorough due diligence and develop a comprehensive plan.”

When they were comfortable, the group put up 75 percent of the investment, with the other 25 percent coming from seven other investors. (They declined to disclose the amount.) They also took out aloan from the Bank of Fairfield, a community bank, after many others, including Chase, passed. To secure the loan, the group had to sign personal guarantees, further tying their financial futures to this investment.

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