If you're looking to sell private equity and don't have a clear idea of whom to approach, Gary Cino might help focus your thinking. Rather than peddle his stock to anyone who expressed an interest, Cino, whose company operates 98¢ Clearance stores in Northern California, saw it as a golden opportunity to tighten relationships with people he relies on. Among those he targeted in his recent $3-million offering were landlords and merchandise vendors.

Wooing landlords made a lot of sense in the context of an increasingly competitive retail market, says Cino (who over the next three years plans to go from 18 to around 40 stores). "If you want a bigger sign on your store or permission to hold a parking-lot sale, then you want landlords who are vested in your success." Having vendors in your corner can't hurt, either, he feels, especially when supplies are tight and vendors can't give all customers the quantities they want.

Since outside investors will own only 20% of the business (and none of them will own more than 2%), Cino says he doesn't worry about a loss of control.

-- Researched by Michael P. Cronin

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