What Does a Capital Advisory Firm Do? | Jesse Welch, MidCap Global
A founder who went from film producer to AI founder to investment banker explains what his firm actually does, using one unusually structured deal as the example.
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Castro What does a capital advisory firm do? Jesse Welch, Founder & CEO at MidCap Global, explains how his firm works buy side, sell side and on financing for lower middle market companies, and walks through a structured music IP roll-up built around an SPV, preferred equity and an equity ratchet.
About Jesse Welch: Jesse Welch is the founder of MidCap Global, a capital advisory and investment banking firm that advises on selling, buying and financing businesses. He also hosts Capital Love Letters, where he reads real deal documents on camera and shows which clauses decide who gets paid, and when.
Connect with Jesse Welch:
Website: https://www.midcapglobal.com
LinkedIn: https://www.linkedin.com/in/jeg26
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Joshua Wilson:
All right, Jesse, for the PE podcast, why don't you tell us a little bit about your group and what kind of things do you like to focus on on?
Jesse Welch:
Yeah, so I'm Jesse Welch. I run MidCap Global, a boutique capital advisory investment bank. we work on companies $1 million to $50 million in EBITDA. I work both buy side and sell side and the financing. The sectors that we like are entertainment. That's mostly because of my background. So video games, music, IP, roll ups, feature films, television here and there. And then I really like trade businesses. I like blue collar, boring businesses. I think that's because I like the operators the most. I just I tend to get along with them. They tend to make the most money as well. like I mentioned, my background's in entertainment. It took a weird road to get here. I was a film producer, then I moved into tech. I was fortunate enough to found a couple of AI companies, exited some of those sadly about 10 years too early to become a billionaire. and then I moved into finance in 2019 when I launched MidCap. I would say a a good example of of what what we do on the more interesting side. We had a music IP roll up about a couple of years ago, thirty million dollars. sponsor brought a meaningful chunk of equity. And we did something off balance sheet. So we set up an SPV, which owned the music and the IP, and the fund that brought in the debt and some pref some pref equity as well. They owned that or 85% of it. And they kept 85% of the profits. and then we had our operating company, which charged that fund or that SPV a fee to manage those those songs. Cause songs they don't they don't make any money if you don't get into video games and commercials and stuff. And we also set up a ratchet. So as we paid that pref down, more and more of the equity flipped back to my clients. So it only really worked. We only ever owned the IP if if everything worked and and and we paid everybody off. And then we also had a little bit of senior debt on top of the holding company as well. So that was pretty structured, pretty novel, worked out well. And then the other half of what I do is Capital Love Letters. That's a media company. We just talk about private equity strategy. I break down clauses. on camera so operators can see what the actual wording is of who gets paid and what and when.
Founder & CEO, MidCap Global | Host, Capital Love Letters
Jesse Welch is the founder of MidCap Global, a capital advisory and investment banking firm for companies doing $1 million to $50 million in revenue. He advises on selling, buying and financing businesses in the United States and Asia Pacific, and his deal work has included SPAC transactions.
He also hosts Capital Love Letters, where he reads real deal documents on camera and shows which clauses decide who gets paid, and when. The channel has more than 70,000 followers across YouTube, Instagram, LinkedIn and TikTok.
Jesse founded MidCap Global in 2019. COVID hit eight weeks after launch and nearly shut it down, and he rebuilt it into the advisory firm it is today. He also founded a real estate private equity firm in Hawaii and co-founded and sold a crypto hedge fund. Earlier, he produced films in China, raised money for feature films across Asia, served on the Film Development Council of the Philippines, and co-founded and exited AI technology companies, but he was about 10 years too early to become a billionaire.