Alka Oaks Co-CEO's

Host Chris Ryan speaks with Co-CEO's Monica Rekhan and Charles Gay of Alka Oaks.

Episode Transcript

Speaker 1 (00:00):
Welcome to CEOs.

Speaker 2 (00:01):
You should know I am Chris Ryan and we have
a pair of co CEOs today that we're so excited
to meet as Charles Gay and Monica raycon join us
from alca Oaks Partners AOP, as they're referred to, is
a private investment fund run by operators and backed by
top investment funds and family offices. They're looking to purchase

(00:23):
businesses looking to sell. For information, you can go to
alcaoaks dot com. Charles, Monica, thank you so much for
joining us.

Speaker 3 (00:33):
Thank you Chris having us.

Speaker 2 (00:35):
So let's start with with Charles and tell us a
little bit about the company's mission and how it fits
with with who you are as an individual.

Speaker 4 (00:46):
Yeah. Absolutely, I'll jump here and Monica be anything else,
definitely let me know. But you know, I grew up
in Westchestern, New York, worked in Boston for a very
long time and was always around you know, small small
family businesses, you know, these companies where people get their
whole lives to it. And so we decided to launch
Alcoholics Partners AOP with the goal of, you know, investing

(01:08):
in acquiring one of these businesses and helping it grow.
I think that's been a really really amazing experience for
both of us.

Speaker 2 (01:14):
And for for Monica. What is the problem you're trying
to solve, you know through your company, something that is
out there that perhaps is different it was different in
the past, or is the current environment that you're looking
to change.

Speaker 3 (01:30):
Yeah, there's actually a huge wave of business owners who
are looking to retire and not many of them have
still figured out how to keep their businesses alive post retirement.
That is what happens to their employees, what happens to
the culture they build, the clients that they have when
they if and when they retire. So this model specifically
gives these businesses a chance to continue. We I enjoys

(01:52):
both step into the company along with our investors and
board members and partner with the existing team like employees,
and try to protect the brand and grow the legacy
that the business owners have built. And meanwhile, all of
this gives flexibility to the owners to design what their
next chapter or what ownership they want to have in
the business. So for this name, because it's such a

(02:14):
personal endeavor for us, we name this nd Alcohol Oaks
because Alcoh is my mom's name and Oaks is reminds
Charles of his hometown in Westchester. So this symbolizes in
some ways how personally we are dedicated towards this problem
and actually figuring out helping helping business owners retire.

Speaker 2 (02:33):
I think this is such a unique and interesting concept
because a lot of times New Hampshire, where I'm from,
is a small business state, and they when folks are
looking to retire, they don't know what to do with
the business. They really want there to be kind of
a legacy piece. At times it's handed over two children
who are involved with the business, or maybe somebody that

(02:57):
worked there in the hope that there's.

Speaker 1 (02:59):
Going to be kind of a sustained legacy piece.

Speaker 2 (03:02):
So I guess this kind of takes us back to
the beginning and the formation of the company in that
why did you identify this as being an area of
need and how did the company get started?

Speaker 1 (03:14):
We'll start with Monica on this one.

Speaker 3 (03:17):
Yeah, So our origination the story is really start from
our Wharton Business School. I met Charles there. We both entered.
We both came from family business backgrounds, so we knew
we wanted to do something in that space because we
understood the unique and the complex challenges that section provided.
And we said we want to be entrepreneurs, and we

(03:37):
explored a lot of the entrepreneurial opportunities that Warton had
to offer, but we both of us got really excited
by the same opportunity, that is starting a fund to
help business owners retire. I think that fit our long
term values at the same time utilized our skill sets
and potential that we already brought. So we really hit off.
We knew each other for the two years at Wharton,

(04:00):
and we really fit as partners. We were different personalities,
complimentary skill set, it had similar values and goals. So
while other people in my badge were recruiting for traditional
jobs and we were nervous of what and how we'll
do this, but finally we ended up raising a good
amount of money to actually build this fund. So that

(04:21):
was now. Now we're supported by fifteen investors and have
the capability to deploy almost forty million dollars in our
company where the business owner is looking to retire. That's
that's our story and shot I hope that answers.

Speaker 2 (04:34):
Yeah, yeah, And Charles, if you wanted to add anything there,
picked up on the start and kind of what drove
a desire to have this type of company.

Speaker 4 (04:46):
Yeah, definitely. So you know, I grew up with my
dad worked in corporate for a long time, and you know,
eventually he decided to launch his own thing, became a
Broadway producer, and I like to say the hair grew
back on his head because he was so much more
excited about running his own busines. And so I decided
that was a really really inspiring kind of journey for us,
or for me to see. And so said, you know what,

(05:06):
I'm graduating from business school. I met Monica, we became
good friends, tied to launch this fund together. And if
I can do anything, I want to go out build
something on my own and build something with you know
these people who I've seen build really really amazing and
awesome companies. And so decided, you know what, this is
one of the best models for one to hit that
passion of working with small businesses, working in small communities,

(05:27):
and also to really have an impact in a very
large impact. And so, like Monica said, you know, We've
got fifteen amazing investors, some from all over the world,
some who built great companies in the US, and they
trusted us enough to say, you know what, we want
to back you guys. We want you to go out
find this business and grow it and scale it into
the future. And so that's I think a big part
of the push for at least me personally to get

(05:50):
involved in kind of this ecosystem.

Speaker 2 (05:52):
I'm really interested in kind of the process side of
this and how this works, and we're going to get
into that in just a little bit. With that, Charles
Gay and Monica Raycon from alca Oaks Partners more information
at alca oaks dot com. But first I want to
kind of learn a little bit about the both of you,
and then we'll get into, you know, the dynamics of this,
of how this works, how the businesses get run once

(06:16):
you purchase the businesses that are looking to have new
ownership and kind of retain some of the legacy that
they have had previous. But let's first get into who
the two of you are. Let's start with with Charles,
where you're from. You mentioned a little bit You're from
west Chester, New York, which might be where I'm from
as well, originally before coming up to New Hampshire for college.

(06:38):
What's your story and you've kind of gave us a
little bit of a clue and insight but in totality,
where you from and what is your story?

Speaker 4 (06:48):
Yeah, so I grew up in Rochelle, New York, which
is an awesome, awesome little small town just outside of
New York City kind of you know, grew up you know,
in the with with my dad and the entertainment industry
and just really surrounded by a lot of these you know,
small business owners, small shops, and so that was the
initial spark for saying, you know what, it's kind of
cool to own the local ice cream store. Things like

(07:09):
that that you know, you get excited about as a kid.
I went to Michigan University of Michigan for for college,
kind of studied business and psychology and you know, really
really fell in love with the Midwest and the football
games and all that kind of stuff, but ended up
out in Boston for work. So for the few, you know,
for a few years, was up there kind of doing investments,
working with honestly mostly retiring folks who were doing you know,

(07:31):
investing for their future and things like that. And decided,
you know what, I love this. I'm loving Boston. I
love New England. I used to hike in New Hampshire
all the time, go camping, up there, but decided I
want to do something. I want to do something my own,
I want to start something, and slowly but surely kind
of learned about this, this model of you know, investing
in these small companies, growing into it, becoming an operator

(07:52):
running the business, and said, you know what, the only
place I can actually do this, uh in the real
world is at business school. So it was very very
fortunate that they let me in at Wharton and spent
the next two years just trying to understand what it's
like to run a business, what it's like to you know,
what are the challenges, what are the issues they're facing,
and said, you know what, I think, I think I
can help people. I think I can work in this space,
and met Monica and together we decided, you know what,

(08:15):
let's let's raise the money and go after this. And
so it was a really really awesome and strange journey
from an undergrad psychology student to running a fund now.
But I think it's been a it's been worth awhile
so far.

Speaker 2 (08:26):
Yeah, thinking of Nourroschelle close to their Mamaranac Bronxville or
two communities I'm familiar with growing up and amazing main
streets with bakeries, restaurants, you know, shoemakers, all sorts of
entrepreneurs and you know in New Hampshire and other places
across the country, main streets have taken obviously, you know

(08:48):
a lot of beating over the years, and there's a
lot of efforts in order to try to revitalize main streets.
Does this focus of alcoh Oak's partners help in that
way in that a lot of times those small businesses
kind of when they go out, they go out either
because of financial issues or retirement. Is there is that

(09:10):
a part of your focus as well, revitalizing main streets?

Speaker 4 (09:14):
It really is. And it's funny you say that, because
there are so many companies that die, not because they
were bad businesses, not because they didn't you know, have
a good product of good customers. It's because the founder
got older, he got sick, or he needed to retire
and his kids didn't want the business, or you know,
no one could buy it out, or his employees couldn't
figure out how to run it without him. And so
what we're trying to say is, look, we know that

(09:34):
these companies exist, and we don't want them to go
away because, like you said, it's the ice cream shops,
it's the bakeries, it's the small shoe sellers, right, or
it's the large local business that you know what, they
employ five hundred people in a small town. And we
want to be in those spaces where we can come
with you know, Monica, and I'm sure you'll talk about
this later, but Monica's worked in global offices, She's run
giant teams. I have that investing. So we have these talents,

(09:56):
and we have these skills, and we want to say, look,
we want to keep thesempanies alive, and we also want
to revitalize them with a lot of the skills and
talent and money that we're bringing. So you're right, that's
actually our core Our core goal is to find those
businesses and say, look, if you're at a pivot point
where you don't know what's going to happen next, so
you're scared about the business and you're but you're also like, look,

(10:16):
I need to retire, I need to live my own life.
That's what we raise this fun for. And those are
the kind of companies that we that we want to
talk to because we know that they're the core of
their communities and we don't want them to go.

Speaker 1 (10:26):
With We'll bring in Monica.

Speaker 2 (10:28):
Now, tell us about your story, where you're from and
what drew you to this type of endeavor.

Speaker 3 (10:34):
Yeah, I grew up grew around Charles only very near.
I grew up in India. I am a view de
science engineer by education and then did a business degree.
I'm actually the first women in my family to ever
get to work or live independently for that matter, or
have a master's degree. It's like it was unheard of,

(10:56):
and my journey really inspired. I saw my journey inspiring
my sisters back at home to be financially independent as well,
and I'm very proud and grateful that I could play
a role there. So since then, I truly believed that
every step I take forward has a ripple effect and
really opens doors around me. And I was convinced that

(11:17):
I had to do something of significance so that the
ripple effects are of value. So that's the personal side
of it, and the second part of it is the
official thing. I worked with City Group as Charles was mentioning,
and I did that for around seven to eight years.
I was in middle management position, assistant vice president. I

(11:38):
actually saw businesses up front across geography. I went to
Taiwan and Singapore Asia side, and also had stakeholders in
the US UK in some of the projects. And I
had seen the global world around how the reorganizations happened,
the digital transformation happened, just technical stuff, and I knew
that there could be something that I could believe for

(11:59):
myself than helping like a very big organization. So we said, okay,
I had to reassess my situation and say how can
I actually do this? And I needed some space to
figure out what that was. So what in was that
space that I could actually come back do some white
board ex as, I understand what resources exist and say
what I could build from my own. One thing that

(12:21):
really helped me was I came from business community back home,
so I had seen my grandfather, father, brothers run their businesses.

Speaker 4 (12:28):
No one.

Speaker 3 (12:29):
I did not see any other women doing it, but
at least I envisioned the same that I could do
it for myself. But I thought, US is the better
place for me to be able to actually get a
chance and do this. So I really wanted to be
a business owner coming in and Wharton and this fund
actually we believe is the path for both of us,
me and h ours to actually reach there and own
a business of ourselves and grow it and use all

(12:52):
the skill sets we have taken from so many experiences
in our past lives and actually put that in that
one company that we will dedicate almost our next decade
or even not even the lives, if not the lives.
So that's the plan, that's my story. That's why I'm here.
I'm excited about what we are trying to do. Every day.
We have this enthusiasm that we'll find that one business
and we'll we'll step into it, grow it and hopefully, yeah,

(13:16):
make it of value to all the people around us
as well as for ourselves.

Speaker 2 (13:21):
Talking about you know, main streets as we did earlier,
one of the other major issues that happened is, you know,
in towns across New Hampshire, Massachusetts, Rhode Island, it.

Speaker 1 (13:31):
Really crossed this country. We saw a.

Speaker 2 (13:33):
Lot of mills and a lot of jobs where to
textile mills. Folks worked with their hands leave as a
result of being able to find globalization and lower wages
labor costs in other places. But I'm also thinking about
this right now, and if there had been a entities

(13:57):
such as as this.

Speaker 1 (13:59):
Or a more digital approach or a global approach.

Speaker 2 (14:02):
Do you feel that a lot of that stuff had
to take place because a lot of the communities fell
apart as a result of the you know, the fact
that the mill left and there wasn't an option you know,
available to kind of either fill that space with something
different or to keep you know, the current environment in place.
Kind Of a long question, but I think it's interesting
to a lot of folks around here when it comes

(14:24):
kind of the fabrics of a lot of these small
towns and communities. We'll start with Monica on that and
your thoughts about revitalizing kind of the small town around
these job centers and whether a lot of things could
have been different if there had been this type of approach,

(14:45):
particularly from a digital standpoint.

Speaker 3 (14:47):
Yeah. Absolutely, it's one thing you have to technical answer
of that is always for any community to thrive, access
of financial capital is very very important for any sustainance
of local economy or the businesses around it, and having
instruments such as this to truly helps figuring out the

(15:07):
capital allocation in technical works again is to figure out
how where the capital flows and if something which is
these businesses most of these businesses actually have a good
amount of talent and good sps and things that that
should be retained and is of value. So such a
model is really important for long term ensuring that this

(15:29):
sustains irrespective of someone on the like if someone wants
to step out, they don't have to take such drastic
decisions that they don't have. There's still the brand, the community,
the legacy, the customer, the services. Everything can sustain and
if it is efficient, it will be it will be
funded and at the same time sustained and important for
the local community. So that's how we're seeing it right now.

Speaker 5 (15:49):
Of course there are good assets, bad assers, but at
the same time it is important to conserve the good
assets and ensure that the capital flows where it is required,
fired and desilp.

Speaker 2 (16:01):
That is Monica raycon co CEO of Alca Oaks Partners,
and the other co CEO, Charles Gay, is with us
as well. So I want to get into the final
stretch of the program here the process piece and why
should a founder choose to sell to you versus any
other buyer?

Speaker 1 (16:21):
What's different about your approach?

Speaker 4 (16:25):
Yeah, I guess I can jump on this one. So
like Monica was saying, right, you know, we are looking
for those companies, those businesses that they're core to their community.
They you know, have been there forever, they're growing and
they really are those pillars of the community. And so
what we do is we're not trying to build a
portfolio of ten to fifteen companies.

Speaker 3 (16:45):
Right.

Speaker 4 (16:45):
We have the funding to buy a single business, to
grow with it, to grow with its team, and to
take it into the future. So we don't have that
model of you know, coming in, getting rid of people
and you know what and doing all that. We need
the team to stay, we need the company to grow,
and we need to work with the seller who wants
to partner with us. So this this model is much
more of a partnership, I think than a lot of

(17:07):
other investing models. And that doesn't mean investing model is
bad are good, but I think for sellers who really
value that personal connection, who value that that legacy, the
value of their team, and want things to you know,
want things to stay how they are and with the
people that they can grow and trust with, I think
that's what we really for event. So I don't know, Monica,
I'm sure you have some some more stuff to stay there.

Speaker 1 (17:28):
But for us, it.

Speaker 4 (17:30):
Really is all about partnership here and finding sellers who
know their ideal partner, know what they want to do
after they retire, but also want to say, Look, I
don't want to just sell by asset. I don't want
to just sell my business. I want someone who will
take care of it. And We've only got one shot
with the business we buy, so I will have to
take care of it as much as best as we canna.

Speaker 3 (17:50):
Yeah, yeah, I think the biggest thing that differentiates us
is your buyers with a soul. I guess we not
only put our brains with equity literally, but at the
same time we're really bringing the passion and the endurance.
To put in context, we both graduated from Warden and
we are just literally putting our professional career on stake
for this one company that we'll buy, and our personal

(18:12):
incentives monitoring or otherwise is also aligned to the health
and the well being of the company. That amount of focus,
energy resources from the two of us and our investors
concentrated on one business, along with all the technical capabilities
we shared, really unlocks unimaginable potential for that one company,
and this partnership model combination across all of the things

(18:34):
that we just mentioned is very hard to find in
most buyers out there. We personally care, we professionally contribute,
and we show up every day. Like we were talking
about values, I don't know if we'll cover that later,
but we truly believe in great humility and transparency and
that's what we will. We promise the sellers as well
as the other stakeholders around us, even our investors as well,

(18:56):
and that's who we are.

Speaker 2 (18:58):
Yeah, what do you do after acquiring the business and
what happens to the seller their their wishes? Like let's
say I own, We'll do an ice cream shop. But
Charles mentioned that earlier and I say, I really want
I really want Tim to stay on. He's a good manager,
that's my will. But you discover that Tim is actually

(19:19):
not that.

Speaker 1 (19:19):
Great of a manager.

Speaker 2 (19:20):
Miss Handle's money and all of that, Like, how do
you how do you go about figuring out the path
that's best for the business and it's financial viability versus
you know, what the sellers say is if the seller
wants to hang around and be a part of things,
do they do you allow for that? Is each situation individual,

(19:41):
either one of you could could pick that one up.

Speaker 1 (19:43):
Yeah, I can.

Speaker 4 (19:43):
I can jump on that one. So the first thing is,
you're right, every situation is different, Right, So you're going
to have a software company, maybe the engineering team is
super super brilliant and they want to stay on forever.
And maybe you have a company where a lot of
the executives are in their late six season they're all
thinking about retirements. That those be very different situations. But
what we like to say is we love to work

(20:03):
with the existing team, and we kind of have to, right,
we want we want companies that have strong teams that
know what they're doing, that are just they own. All
they need is an extra you know, an extra push
on that that talent and those scales, those connections that
we're bringing. So that's kind of the first really important thing.
We also love when the seller kind of supports us
in the transition, and you know, sometimes keeps keeps a

(20:26):
part ownership in the company. So you on ice cream shop,
maybe you keep a part of that ice cream shop
while we, you know, invest in the rest of it,
so that you're not only benefit benefiting from the future
growth of the company, you're also there with us, maybe
on the board, maybe kind of giving us advice, maybe
being consultant really really helping us learn about your business.
And and and because no one knows the business better than
the owner, right, so we want to work alongside people

(20:48):
like that when it comes to your situation, Like you said,
of hey, the seller loves or the owner loves this
one employee, but you know they're they're not managing money
while they're not you know, you know, managing teams. Well,
you're right in those situations. You know, maybe maybe it
might he might have to move on, but I think
you know, we're not jumping in with this decision of Okay,
fifty people have to be gone. We are going to

(21:10):
be in the business as leadership, as employees at that company.
So it's about the teams we work with too, So
we would we would kind of get to know and
hopefully like everyone we work with. And so yeah, it's
much more about you know, we're not sitting in an
office far away. We'll be in the office every day,
working just as hard as everyone else. And so that
energy we hope we'll see around, We'll see in everyone.

Speaker 1 (21:31):
That we work with.

Speaker 2 (21:32):
Monica, how do you determine what companies you're gonna buy
and what companies you're going to engage in.

Speaker 1 (21:39):
And you mentioned, you know, the.

Speaker 2 (21:40):
Values piece, so obviously I'd like for you to expand upon.

Speaker 1 (21:43):
That a little bit here.

Speaker 2 (21:45):
But how do you determine, you know, if somebody's making
a pitch to you, what company you're going to purchase,
what company you're not going.

Speaker 3 (21:53):
To Yeah, so right off the bat, we're looking for profitable,
growing established businesses which could be service or software, And
we have a range of valuation and profitability that we
have in mind for us to sustain and grow the
business in the manner that it will be comfortable for

(22:13):
both of us and will be applicable and relevant. But
if I have to break down break down that process
of how we reach there, the first thing is first
and foremost is the financial health of the company. The
second piece is the culture of the company, where we
can we see whether there is a fit for someone
to actually enter and grow and learn that business anymore ourselves.

(22:34):
And then third is the seller piece, which is is
the seller ready? Does the seller know? What does it mean?
And what does he have clarity around post retirement life
and so on and so forth. So these are top
three that we choose and then once we are aligned
on these three things, then we have a process of
getting down further to understand what the industry is, what

(22:54):
the customers are, what that opportunity looks like, and how
sustainable that is for us to understand if it's a
good asset for us to that's the broader focus around
what we're looking for for any of these companies that
we're going after.

Speaker 2 (23:13):
If an owner is considering selling the next one to
three years, what should they be thinking about, what should
they be doing in order to prepare Charles?

Speaker 4 (23:23):
Yeah, so you know, we like to see companies healthy
financial statements. So if you're saying, look retirements around the corner,
talk to your accountant and say, let's get these books
clean so that anyone who's looking at my company, or
or anyone who's interested in buying the business can understand
really what's going on and what are the real drivers
of your business?

Speaker 1 (23:40):
Right.

Speaker 4 (23:41):
That financial story is really important. We also like to
think about owners who they started thinking about their post
retirement life. Right, So when you sell this business that
you might have dedicated thirty forty years to, what do
you want to do?

Speaker 3 (23:53):
Right?

Speaker 4 (23:53):
What's your next venture? What's your next retirement. Are you
going to Florida, you know, are you going to go
up to Maine somewhere? Like, really understanding what you want
to do is so important because we've met a lot
of founders who they sold their business and they just
weren't sure what was going to happen next. And so
we get excited about people's excitement or when you're excited
about what you're doing next. Selling the company doesn't have
to be this bad or this negative thing. It should

(24:15):
be exciting. It should be an exciting moment for you
to move on into the future. And again not all
the time. That doesn't mean you're leaving the business forever.
It just means you're no longer in their day to
day and that is a big shift that people should
think about. The last thing is we really think people
should have an idea of their their seller, right who
or their buyer? So who is going to be your
ideal investment partner? Are they going to be another strategic

(24:38):
or another competitor in the industry or is it a
model like me and Monica's right? Do you want young
entrepreneurs to come in, grow the business and grow with
your team? So really understanding who that partner is I
think gives you a good idea of where your business
needs to be. Yeah, to prepare for that next stage.

Speaker 1 (24:54):
I want to get anything to add there?

Speaker 3 (24:57):
Oh, I think you should. It's if it is so
new for everyone. So if you're not prepared or if
you're not sure, it's best to reach out to people
like us. We are accessible. We mostly we reply most
of the emails and contacts that we get. Ask someone,
Ask someone who's already done this before. Ask someone how,

(25:17):
what does it feel, what the lies, what the next
life looks like? Get that clarity and knowledge, and we're
happy to talk whenever whoever wants to reach.

Speaker 2 (25:25):
Out for sure, and Charles, how do folks get in
touch with with you?

Speaker 1 (25:28):
Guys?

Speaker 2 (25:29):
What's your digital presence web address? And how do folks
get involved with you?

Speaker 4 (25:36):
Yeah? Absolutely so. You can read about us and our
investment criteria on our website www dot alca Oaks dot
com and that's a l K a O a k
s dot com. And you can also reach out to
me through email at CHARLESG at alca Oaks dot com. Also,
and again, we're always excited to hear from people, you know,
any kind of business, any kind of stage you're at.

(25:58):
We we love to talk and we also love to
share this kind of what we're doing because it's a
lot of fun. It is definitely a lot of fun.

Speaker 1 (26:03):
Monica, did you have anything else to add?

Speaker 3 (26:05):
No, I completely agree with what he's saying. It's so
much fun to do this. We're really excited.

Speaker 1 (26:11):
Well, thank you both for taking some time to join
us on CEOs. You should know.

Speaker 2 (26:15):
That's Charles and Monica from Alka Oakes Partners. Charles mentioned
the website is alkaoaks dot com. Appreciate your time and
look forward to talking again soon.

Speaker 3 (26:25):
Thank you, Thanks so much, Chris, thank you for having us.

Speaker 1 (26:28):
This is CEOs you should know.