alumni
The Search is On Kyle Polanski is up to big things down at Halibut Flats His company’s name could be the setting for a blues song, or a hardscrabble Steinbeck tale. But the fact is, times are pretty good for Kyle Polanski (MBA 2008) and Halibut Flats Partners, LLC, the search fund he built by sheer force of ambition during his second year in the Foster School’s Full-Time MBA Program. Polanski convinced 12 investors to finance his search for an established, profitable Northwest small business—with potential to grow. If he finds one and negotiates a favorable deal, his investors will bankroll the acquisition, eventually reaping a healthy return if Polanski can transform the business from good to great. Some big ifs? Not really, asserts Polanski who, despite an admitted aversion to risk, likes his odds.
30 fo s t e r B USI N ESS
Short-order mastery of unfamiliar industries has become his stock-in-trade. After graduating with a degree in biology from Colorado College, Polanski landed a research job with a Seattle mergers & acquisitions investment bank and ascended to vice president in less than five years, working on a wide range of deals. To experience the other side of the deal, he joined Intracorp Capital, a Seattle private equity firm. He also launched a small wholesale birdseed business, but soon recognized its limits. “I realized I wasn’t going to service Fred Meyer and Home Depot out of my garage,” Polanski says. “That’s when I decided that maybe going to business school would help me start at a point further along the growth of a company.”
The Foster School completed his portfolio and emboldened him to become a kind of small-business-private-equity-entrepreneur. He took further inspiration from his MBA internship with Saltchuk Resources, a holding company of un-sexy operating businesses owned by Foster School advisor Mike Garvey. “It turns out that there are a lot of interesting smaller companies whose owneroperators are no longer willing to take the risk of investing in further growth,” Polanski says. “Saltchuk invests in companies, treats people well, rolls up their sleeves as operators, and does a good job of growing them over time. By working hard and honestly in these tough, boring industries, they’ve done really well. It gave me an idea of where I could go with this.” First Polanski had to win over some investors. Last winter he approached more than 100 contacts, business owners, advisors, past employers, friends and friends-of-friends. By spring break, he raised $270,000 in seed capital. By graduation, he launched Halibut Flats Partners (named for the old Ballard micro-neighborhood where he lives). A few months later, he had already identified a number of local companies that fit his investment parameters and was negotiating an acquisition. And then he really steps up to the plate. But Polanski has studied the odds of a successful search fund, and has done everything in his power to improve his own. “A lot of people have said, ‘Wow, you’re taking a big risk,’” he says. “I turned down a few really good job offers. So that’s risky. But since I raised the start-up capital, it doesn’t feel that risky. The way I think about this search fund is that I have a distinct skill set—understanding how to find and evaluate companies, how to negotiate deals, and how to learn new industries. And I’m hedging my relative lack of management experience by finding a company that’s already doing well. I’m a lot more comfortable and confident in my ability to take on that kind of challenge than I would be to start a company that doesn’t exist. “Now I get to apply the skills and experience I have developed over time and fine-tuned at the Foster School.” n