Page 303 - James Caan - The Real Deal

30 · Private Equity

‘OK. What else?’
What I was doing with these questions was performing a risk
assessment: I didn’t need to be convinced of the potential upside;
I needed to understand what would happen if I failed. I wanted to
know why I would fail and how I would fail: if I knew what the
issues and concerns were I could assess the risk. It seemed to me
that the biggest risk was the costs I would have until I could sell
on my first investment. I did some quick maths: I added up the cost
of hiring my team – a lawyer, an accountant, a banker, a secretary,
etc. – and the cost of renting an office. I reckoned it would cost
me £800k a year, but I also reckoned that with my operational
experience I could get a return in three years. So my total exposure
would be £2.4 million before I’d find out if I had a talent for
private equity. The key questions were these: did I believe in myself
enough to invest that £2.4 million to find out? And did I think I
could make more than £2.4 million from investments in that time
frame? When I realised that I thought I probably could, I became
incredibly excited. Not only had I been able to put a figure on the
risk, but I had started to map out my next business.
It took me a couple of weeks to realise what was happening: I
had stopped faffing about. I was getting up earlier, I had a focus,
I wasn’t playing. Aisha and the girls were relieved, too: Finally,
he’s found himself something to do! Over the course of those
couple of months I stopped being a semi-retired millionaire and
embarked on a second career. As I thought about what I could
achieve, about the changes setting up my own fund would create,
it was a bit like standing in a Savile Row tailors and trying on a
suit. Private equity fitted me, I felt good when I imagined myself
starting a new venture in a new industry, and I started to feel
confident about what could be achieved. I had found the thrill, the
buzz, I had been looking for in planes and helicopters and fast cars
in an idea for a business. I was on an adrenalin high and I had a
real sense that I had started the next chapter of my life. I took the

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