Ray Fan (A): An Entrepreneur’s Journey through Acquisition

Four months into his search for a business to acquire, Ray Fan (Kellogg '16) had found a promising lead: a dermatology practice in Los Angeles called LA Dermatology Associates (LADA). Although he had no direct experience in the healthcare sector, he was reasonably certain that the deal was solid. Unlike his funders, who benefited from portfolio diversification, however, Fan could only place one bet. His lack of experience in the industry meant the odds were higher that he could be missing something, which worried him. But experience had taught him perseverance and hustle, and he believed these qualities could mitigate most, if not all, unforeseen risks. For now, he needed to synthesize LADA's pluses and minuses to be realistic about determining whether acquiring the company would be a fruitful move for him, his investors, and the doctors and patients the company served. Given the price and structure of the deal, was the risk worth the potential reward, or should he pass on the deal and pursue another opportunity?