Where did it all go right?

Forbes offers 10 very good reasons why one should visit the Mexican city of Merida. Twice named the American Capital of Culture, the city’s unique heritage offers an enticing blend of traditions inherited from the ancient Maya civilization dating back to 2600 B.C., combined with customs brought by Spanish conquistadors.

Bustling markets, a dazzling array of cuisines, white sandy beaches, all drawn together by a stunning display of compelling, eclectic architecture that boasts wide central plazas and beautiful cathedrals, Merida sounds like the perfect holiday destination. However, on the face of it, Merida does not appear to be the sort of place one would choose to base oneself to run a leading software company.

However, for Mexico City born Alonso Alcocer, a London Business School MBA alumnus, Merida is not an out of the way hamlet, but rather a respectably sized city offering nonstop international flights to US cities such as Miami, Houston, and Atlanta, and a 3-hour drive to Cancun or Tulum.

“Merida is the safest city in Latin America, offering a 20-minute drive to the beach, attractive places to live and a tremendous wealth of great food and entertainment,” says Alonso.

Becoming a co-CEO of a well-established company in an affordable, beautiful location begs the comically ironic question that was once put to Manchester United football legend George Best at the height of his fame: “Where did it all go wrong?”

Where it all went very right for Alonso was in his other favourite city: London. Gaining his MBA from LBS in 2021, Alonso originally trained as a chemical engineer. Born and raised in Mexico City, with experience living and working in different parts of the world, it is the business and cultural thrum of London that continues to draw him back to his alma mater each year. That and the fact that LBS gave him every reason to take his business career to the next level.

“London Business School gave me the tools to make things work - in life and professionally - in an altogether better and bigger way,” says Alonso.

And boost his career LBS most certainly did. Following a rigorous search fund exercise, Alonso, along with his business partner Santiago Estevez through their investment fund Duhau Capital, he has recently invested in National Soft, the largest point of sale (POS) software for restaurants in Mexico, with a growing presence across Latin America.

“London Business School has given me the ability to think big, no matter what the circumstances,” says Alonso, who credits the tenacity and perseverance he has to use and deploy in his recent business majority investment to what he learnt during his time at LBS.

“The confidence one acquires from one’s time at LBS as an MBA student, gives one the power to overcome obstacles with more efficiency and self-reliance than ever before. That, combined with the remarkable stories one tends to hear in the classroom - from professors, and outside of the classroom from one’s friends and classmates - proved a constant reminder to always think bigger and be more ambitious,” says Alonso.

“I met incredible people at LBS, some who have had to overcome significant adversities in their lives. Those experiences, along with academic case studies and lessons learned from my courses, I soon found that I was quickly and comprehensively being given the tools to explore more deeply the way to make things work, and to enhance my professional and personal life.”

Entrepreneurship through Acquisition

During his time at LBS, Alonso Alcocer attended the Entrepreneurship through Acquisition (ETA) course taught by Simon Webster and Luisa Alemany.

ETA involves 5 phases: fundraising, searching, acquiring, operating, and exiting. In the fundraising stage an entrepreneur raises a small amount of capital, ~£450k for a single searcher and ~£700k for a partnership, to fund their search phase using the capital to support the operation of the fund (salary of searchers, due diligence expenses, rent, analysts, etc.). In this phase, they look for a business to buy that aligns with their set of predetermined criteria (e.g. growing industry, recurrent revenue and double digit EBITDA margins, among many others).

When the entrepreneur finds an attractive business, along with executing a thorough due diligence exercise with third-party advisors in the financial, legal and tech (if it applies) fronts, they raise a second and much larger round of investor capital to acquire the business, and take over as CEO, this being the acquisition phase. Then comes the operating phase in which the entrepreneur runs and grows the business, typically, for a period of 5+ years.

Finally, the entrepreneur produces a return to its investors either through the dividends or, refinancing the company, in both cases remaining as CEOs or through a liquidity event generated by selling the company.

Simon Webster, company director, LBS alumnus, investor and LBS guest lecturer and former searcher, teaches this Strategy & Entrepreneurship course at LBS in collaboration with Luisa Alemany, Associate Professor of Management Practice in Strategy and Entrepreneurship, that explores entrepreneurship through acquisition (ETA).