October 18, 2023 • 52 mins
Canadian business executive opens up about his background along with building & selling a multi-million dollar company. The day of the exit is very interesting. You'll find him to be likeable and vulnerable as he shares some priceless wisdom nuggets in the world of M&A. Randy now leads the Mergers & Acquistion activities for a 6000-employee company, Valtech. The company has 60 offices in 22 countries. More information can be found at Valtech.com
Please enjoy the podcast. Send thoughts and comments to Chuck@BullStreetMergers.com
Thanks for listening.
Please enjoy the podcast. Send thoughts and comments to Chuck@BullStreetMergers.com
Thanks for listening.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:18):
Hello, This is Chuck Crumpton andwelcome to another episode of The Chuck Crumpton
Show. We are so excited tobe joining you this afternoon, this beautiful
afternoon. We are actually recording inthe month of September, which is a
beautiful month in wonderful Charleston, SouthCarolina. But I just want to say
(00:40):
thank you, heartfelt, thank youfor being part of another Chuck Crumpton show.
I have three quick favors to askof you, and then we'll jump
into our introduction of our guest.And I have a feeling you're gonna love
today's show. First of all,if you would please subscribe, makes the
(01:00):
show easier just keeping it top ofmind for you. It's very very easy
to do whatever platform that you listento the Chuck Crumpton Show. We're on
all the major platforms around the world. So if you would just subscribe,
it makes it easier to keep theshow cookies at eye level, so to
speak. Number two, if youwould share today's episode. Today is going
(01:23):
to be a great episode. Ithink it's a message and a conversation that
can benefit a lot of people.And if you would when you listen,
if you would just share it withsomebody that you think might get a lot
out of it. And then numberthree, if you could leave us a
review, hopefully a five star review. It just helps us with all the
(01:45):
algorithms that help the show get moreand more visibility. I do this for
free. I don't monetize this show. Every dollar that comes in goes right
back out for production and for growth. This is a way for me to
give back. So if you likethe show, please give us a five
star review. If you don't likeit, you can do a couple of
(02:07):
things. One, call me oremail me and say, Chuck, this
is a here's an idea to makethis show better. And I'm very very
open with willing ears to listen toyour feedback. And if you don't really
like the show, there are thousandsof other podcasts out there that you can
enjoy. But I hope you enjoytoday's episode. And we are thrilled to
(02:31):
have you, and we're thrilled tohave our guests. And we'll be right
back with our guest right after this. Thank you for tuning into another episode
(02:53):
of The Chuck Crumpton Show, anon for profit podcast making a difference where
conversations are real and raw. Weare grateful for your support as we build
one of the fastest growing podcasts inthe US. Please subscribe. More information
can be found at the Chuckcrumptonshow dotcom. Thank you for listening. Here's
Chuck, Thank you, Megan,and again, welcome to another episode of
(03:16):
The Chuck Crumpton Show. I lovebusiness and I believe that small businesses with
two to two hundred employees in NorthAmerica really is the engine that drives our
world economy. The messages you willhear on the show are real world business
(03:38):
conversations. I've been incredibly blessed tohave built and sold two of my own
companies, both that started in thetoolshed of my garage. This podcast actually
started in my toolshed, where conversationsare real and raw. I am a
practitioner of business. This is nota conversation about business theory. At Bull
(04:03):
Street Mergers, we help business ownersbuild and sell remarkable companies. If we
can help you, please reach outto us at Bullstreetmergers dot com. Okay,
let's get after this. My guesttoday is Randy Woods, and he's
coming north of the border in beautifulCanada, and he lives in a small
(04:27):
city right outside of Toronto. Heis a recovering entrepreneur. Nineteen ninety five,
he started an internet company with auniversity housemate before anyone, including him,
really understood what the internet was tobecome. Boy did we ever.
He grew that company, Nonlinear Creations, for twenty three years before selling it
(04:50):
to Valtech, a global digital agency, in nineteen ninety five. Today he
helps Valtech acquire other founder led companiesas well as advising startups and other entrepreneurs.
And this is a real unique opportunity. Randy Woods, Welcome to the
Chuck Crumpton Show. Oh thanks somuch, Chuck. I'm excited to be
(05:13):
chatting with you. Yeah, thisis really cool, man, And I'll
tell you why. We Obviously atBull Street and just in my life having
exited my last company, we dealwith a lot of people who have a
thought somewhere in the back of theirhead that they want to sell their business
one day and to get your perspective, and you have a unique perspective.
(05:40):
Not only did you build and sellyour own business, but now you're on
the acquire side, you're on thebuyer side, You're looking to buy companies.
So I think that's a unique perspectivefor the folks that I work with
and the people that listen to theChuck Crumpton Show. And I'll be quiet
in just a moment, but tolet you know that we have a ton
(06:03):
of leaders, a ton of CEOsthat listen to the Chuck Crumpton Show,
and a lot of people that aspireto be leaders and executives and CEOs and
potentially sellers one day. Right,So you've got a really good audience.
This is going to be a reallygood conversation. I want to jump into
(06:28):
the pool of vulnerability with you,Randy, and just ask you who is
Randy Woods? Outside of living outsideof beautiful city of Toronto and going through
what we just went through. Who'sthe real Randy Woods? Yeah, that's
a complicated question. We'd probably spendan evening over pint or something discussing it.
(06:50):
Who am I? So? Iwas born in a small farming town
in southern Ontarioville, and that kindof formed a bit of my world view.
I was fortunate enough to be bornon a street with a whole bunch
of really interesting characters, most ofwhom I still hang out with. So
I have along baseline those people,and I think it's kind of informed the
(07:10):
way that I approach life. Soit's a few things in the world that
think are important to me. Andit's kind of like a long time where
I kind of formalized this because Ithought it made it easier for me to
make life decisions. So when Iwas twenty something, I said, like,
I want to lead significantly in mylife. That's a piece of the
puzzle for me. I want toexperience widely. I want to see a
lot of things and really understand theworld. Because I had an academic bent,
(07:33):
I really did want to understand deeplythe world to whatever level I was
able to, and maybe it wasn'tas academically adept as I thought I might
have been. I wanted to loveauthentically right. I wanted to have family
and have meeting there. And Italk a lot about living vitally in the
sense that I want to be aroundfor a while, and I think you
don't take care of yourself, youcan't do that. So if you're asking
(07:54):
how I frame my life, thoseare the things that have been important to
me and really have been. Theyhaven't changed much since I was twenty four
twenty five when I first pulled thoseout and wrote them down on a notepad.
Oh that's awesome, man, Ithink we are in our third season.
Well, I know we're in ourthird season with the show, right,
three years of the Chuck Crumpton Show, in maybe fifty or so guests.
(08:20):
I think you just articulated that betterthan maybe anyone else has. That
was clear and concise and authentic.So thank you for doing that. No,
it maybe speaks to the you know, the tortured nights as an undergrad
trying to figure out what to dowith your life more than anything else,
So that's probably where that came out, right, right, right, right,
(08:41):
No, that's really cool, man. I'll applaud you, Randy on
the success that you've had both asa founder, entrepreneur and now you know,
as an executive in a six thousandemployee company. Very very very impressed,
and thank you for sharing who whoyou are because that frames us up
(09:03):
to be able to listen better.Right, We're going to spend the next
thirty to thirty five minutes together.It's a conversation between Chuck and Randy that
the world gets to listen to,which is just pretty damn cool. Right.
It does strike me sometimes that welive in an age of miracles.
(09:26):
Right, This didn't happen even tenyears ago. This wasn't really happening,
right, So the world has beenone where we are all allowed to be
our own producers now, right.We can all create, we can all
contribute to the bigger conversation, andI think we should appreciate that because it
didn't happen in the eighties. Ican tell you when I was growing up,
you saw what you saw on TVor heard what you heard in the
radio, and it was a oneway channel. So I think you're right,
(09:48):
this is an exciting opportunity. Oh, it really is. And you
know, I will tell you infull transparency. I am a growing,
ever ever growing host of a popularpodcast show, and I will tell you
when I first started, I didn'thave a clue what I was doing.
(10:11):
You know. I bought the UH. I bought the best equipment I could.
I learned as much as I could. I hired engineers to come in
and tell me where to sit andwhere to stand, and you know,
where to place the microphone and allof that kind of stuff. But it
generally does not go perfectly. AndI love that because it's authentic and it's
(10:31):
real and raw. I remember backto my first guest, a lady who
won Guest of the Year that year, and she's a phenomenal lady, a
CEO of a billion dollar pharmaceutical companyand a friend of mine, And think
goodness that she was such a goodconversationalist. I was trying to punch buttons
(10:56):
and figure out where to go,you know, as a as a host.
Then she just killed it. Andthank God for that, and I
have I have thanked her many timessince then because she pulled my rear end
out of the fire and made melook good because she was such a good
guest. And this is this isgoing to be no different. You're going
to be a great guest, andthis is going to be a great conversation
(11:18):
getting to the heart of the matter. Randy, you built your business,
Why did you sell it? Oh? Very good question, And I should
first be clear that you know,yes, I was a co founder of
the business, but it certainly wasn'tall on my shoulders. Shannon Ryan,
my business partner. Part of whatI'm most proud of is that for twenty
three years we didn't kill each other. I think that's that's something that I
(11:41):
can put on my gravestone. Andthen we had a cast of just incredible
people that we worked with, someof whom were with us for twenty of
those twenty three years. Right,So, as much as I can and
I do, take great pride inthe fact that we built this company and
sold it, it certainly doesn't allreside on my shoulders. Sure, But
your question about why in the timinga few things, I had a mentor
(12:05):
say to me, somebody else willsomeday own your company, whether you like
it or not. And you hearthat sometimes, but it really struck home,
right It was I was approaching fifty. It was clear that at some
point I'm not going to be around, so somebody's going to the company or
won't exist. There were some sortof business cycle things we're working in our
favor. We've been around long enoughto see that the window to sell your
(12:26):
company opens and closes. And dotcom Era it opened and then it closed
for a long time, and thenit opened again, and then two thousand
and eight happened and it closed again. And so we were at a point
where what we did was valuable tothe market. We could tell by the
fact that our revenues were growing,our profits were growing, we were getting
lots of inbound interest, and wethought, well, maybe this is the
(12:48):
time for us to think about takingsome chips off the table. And we
had a hypothesis about how the marketwas going to evolve, and we thought
we either had to get much bigger, or we had to join someone bigger
in order to to you to thrive, or we did reinvent the company.
We could have done that too,and we've done it before. So when
we went to market, we actuallylooked at either raising money to see where
you go out and actually buy abunch of smaller firms and kind of roll
(13:09):
them up into a larger company,or looking to join a strategic acquirer.
And after we looked at the conversations, Valtech was clearly the right decision for
us, and it's actually worked outreally well. Awesome, that's great.
I want to I want to spendmost of our conversation today Randy on peaking
(13:30):
under your tent. You are anexperienced acquire senior executive at Valtech, and
you guys do good deals. Youdo a lot of deals. You know
what you're looking for. I wantto, I want to, I want
to capture that I want to raisethe hood on the maserati, and I
want to I want to know howthe engine works, because I think a
(13:54):
lot of my listeners are going tojust savor this because they want to know
the mind of an inquirer. Right. So I'll get to that in just
a moment, but I want tocamp out on your transition having gone through
that, right, and we havea very similar path. You know,
(14:16):
I built my company over twenty yearsand I sold it to private equity.
You built your company over twenty threeyears and sold it to a strategic buyer.
And we won't get into the numbers. We don't need to see the
term sheet. We don't need toreview the LOI. That's not important in
today's conversation. You did well.You got paid for that hard work and
(14:39):
sacrifice, vulnerably speaking, take meto that moment when you work through the
process. And a lot of peopledon't understand the hairy nature of selling a
business, right they don't. Iwas with a client of mine recently,
and after a couple very strong alcoholicdrinks, he said, I'm just tired.
(15:05):
I'm tired of this process, anda lot of people don't understand the
fatigue and the fear, all thenon financial stuff that goes into selling a
business as a seller, because you'vepoured, in your case, twenty three
years into this, right, Buttake us on a journey for just a
moment to the emotion of the momentwhen you work through LOI you did your
(15:33):
due diligence, You're at the closingtable, the ink is wet, the
funds are being transferred, and themoment when it was all official. Wow.
Yeah, it's a moment. Notmany people get to experience it.
So first of all, I shouldsay I'm grateful that this was part of
(15:56):
my life story, because really there'svery few people who have that chance.
The honest truth is, by thetime we got there, it was a
combination of relief and exhaustion. Therewasn't a whole lot of like dancing around
with bottles of champagne and that kindof thing. Yes, my business partner
and I went and got a drink, but we were both just fatigued.
We did our due diligence in aboutsix weeks, wow, which is really
(16:18):
tight. Given that we had fourcompanies Britain, Brazil, Us, Canada,
so different law different lawyers. Itwas a very intense process. There
was lots of time, so weweren't certain we were going to be able
to get over the hurdle. Sowe got through it. But I don't
know that my entire life, I'vebeen as exhausted as I was when that
process finished. So I know theexpectation is that you run around and you
(16:41):
celebrate and you go to Disneyland,but really I just went home and slept
for like eighteen hours. I understandwhen I went through that. Just to
take a personal detour for a quicksecond. We closed my business on July
first of twenty twenty, obviously inthe peak, in the height of COVID,
(17:06):
and we were selling. So thisis the Chuckster story. I'm not
necessarily proud of this, but wewere selling our house, buying another house,
and selling a business all in thesame day. In one day.
(17:26):
The fact that you're still this sideof the grave, Chuck's impressive. That's
a lot to have happened. Ican't top that. But I did have
I used to box, and Ihad a charity boxing match that month,
So three days before we closed,I was in a ring with a gentleman
trying to knock me unconscious in frontof about a thousand paying guests, and
(17:48):
that wasn't the most stressful thing happeningin my life at that moment. I
was still answering due diligence calls onthe way into the ring as the music
was playing at the True Story,So to give me a sense that was
in context, maybe it was ait's an experience that leaves its scars.
Oh, it's it's not for thefaint hearted, right, my friend.
Well, you know, the thehairiness of it as we talk about it,
(18:14):
it is, it's incredibly you know, it's just full of fatigue because
you're doing your job as a CEOand then your second full time job is
answering all the doctor requests, goingthrough the conversations inside of due diligence,
and you know, it's like ahockey stick almost because it seems like half
(18:38):
of the attorney's time is spending thatlast week before closing, right, And
I don't know, maybe maybe willinvent a better way to do due diligence,
who knows. But it's it's incrediblyfatiguing, to say the least.
But the other side of that,it's incredibly rewarding to look. In my
(19:03):
case, you know, the headof the private equity firm said, Chuck,
check your phone and you'll see youryour bank account balance, and that
was wonderful. But there's a sensewhere and this is just on the emotion
of the moment, but since that, am I really is this thing done?
(19:25):
Right? Am I have? Ireally just released my baby to college?
Right for the next level. Andit didn't hit me until two weeks
later when we were working through postsell activities, a lot of administryvia and
I think the very last item onthat list was a two sentence memo memotifile
(19:52):
you know, effective today July first, I officially stepped down as you know,
chief executive officer or whatever. Andreading that memo that was prepared for
me to sign, I cried.I set in my chair and I cried.
And it's been wonderful. It's beena great transition. Private equid firm
(20:15):
could not have asked for a betterscenario, better relationship. They've done everything
they said they would do and more. I love those guys, and they're
taking our company to a better,bigger level. But the emotion of that,
until you birth the child or sellyour company, it's hard to understand
(20:38):
the emotion behind that. I thinkyou've nailed that, Chuck. So I
agree that the metaphor of like achild is I think pretty accurate. Right,
leaving home empty, nesting, allthat stuff comes to bear. Fact.
There's a bit of academic research thatthey did that suggested, looking at
MRIs that entrepreneurs often use the samepart of their brain when you ask them
(21:00):
questions about their company as they dowhen you ask them questions about their children.
Right, It's kind of wired,So it's not just a metaphor maybe
right. And I do think honestlythat a lot of entrepreneurs who sell their
company and don't feel sorry for them. They've had a payday. It's great,
but it's a life change which isreally difficult. You suddenly find yourself
having to deal with the big questionsof like what to do with the rest
of your life. You probably nolonger have to worry about making rent or
(21:25):
making your mortgage payment, but youhave a whole other set of worries and
involve like what can I do withmy skills that were rewarding after I've done
playing twenty rounds of golf for whatever? Your initial plan is, right,
right, exactly? I had agood buddy of mine who sold his business
did very well. He said,he spent eighteen days floating in the pool
(21:45):
with apail, and he goes,what's my life come to? You know,
eighteen days of floating in the pool. He said, I'll never retire
again. And he's, you know, a lot of juice left in the
tank, and he's right back atit. I've had the privilege, Randy,
of researching you, getting to knowyou a little bit prior to our
conversation today, and you brought upan interesting and this is again pre of
(22:12):
altech, but an interesting perspective onyou as a CEO entrepreneur right before you
sold, and that was around thetopic of career development for your folks.
I was I was drawn to thatcomment. Do you mind unpacking that for
a moment. Yeah. Yeah.We asked, you know, why did
(22:34):
we sell. There's always many reasonswhy you sell a company, but one
of them that had been on ourmind for quite a while is we had
we had an exceptional group of seniorpeople in the company who'd been with us
for a very long time, andsomeone that spent the whole career. They
joined us when they were twenty fourand now it's you know, thirty or
ten years later, fifteen years later, some cases twenty years later. And
(22:56):
what we were finding is they hadpotential beyond what we could deliver. We
could not grow the company fast enoughto give them the jobs that sort of
suited their capabilities. We could changethe title, but doesn't really do anything
right. We can make you grandpoohball, but you know, you could
become something more substantial. And soone of the fits for Beltech was that
(23:17):
we saw very clearly that they neededthe people that we had on board to
step up into the order to sayand step up. And we were convinced
that our people could become really importantparts of Veltech after the transition that's happened.
In many cases they've gone to muchmore senior positions than I have in
the organization. And so I takereally great pride in that they were great
(23:37):
people and we found the stage theycould perform on it was a lot bigger
than the one that I could build. Yeah, that's beautiful, And what
a gift that your people gave you. Right, they served you and your
business and I can tell, andwe're new friends, but I can tell
that you provided them servant leadership upand that you were looking out for their
(24:03):
interests, which is also a bigdeal. Man. It's one of the
privileges of being an independent owner ofa business. Yeah, So not venture
founded, not be back is thatyou can make decisions that are sort of
on behalf of the collective, notjust on behalf of the shareholders. Right,
Your fiduciary responsibility to yourself exists,but you also have the ability to
(24:27):
say, no, I think it'smore important that we keep this team together
and we take a loss for thisquarter than that we satisfy some external stakeholder.
So yeah, I feel like wehad a really strong team. It's
not like we didn't make mistakes.We had rounds of layoffs. There were
you know, sometimes planes find thebuildings. There's things you can't control.
For the most part, I thinkwe had built a group that really liked
(24:47):
each other, was high performing,and it took care of each other when
we could. Yeah. Yeah,And I think that there's something too,
And this is a simplistic way offraming it up, but the philosophy and
the integrity behind a sell is Ithink really often overlooked, right because I
(25:11):
think we in general, as businessleaders and business owners or whatever. We
look at the deal and we don'tpay. Sometimes we won't pay close attention
to the structure of the deal,right. I know, in my case,
we had five offers for my companyand I took the second highest,
(25:33):
which I was not running a five, one C three. I was important.
The numbers were important, but mypeople were very, very very important,
and the number two offer really setmy people up for you know,
a longevity and continued success. AndI don't think again, we take all
(25:57):
of that into consider, right.I think it's common for entrepreneurs, when
there's particularly it's such a fraught processto get very much caught up in the
number. The structure matters at leastas much, even even in terms of
financials, right when you get paidhow you get paid, because a really
big number that doesn't arrive because it'smainly based on future performance or earnout,
(26:19):
is a lot less attractive than asmaller number they're actually guaranteed. So even
on that side, but I thinkone of the ways that the the M
and A market is broken is thatthe business brokers are investment bankers that are
out there that help you sell yourcompany. They are incentive in virtually every
case by the dollar value, whereasI think for most, especially founder led
(26:41):
companies that are selling that are exiting, there's a whole bunch of considerations beyond
the dollar. In your case,it was your employees, right, it
might be family members in the business, it might be the properties that you
own, it might be the desireof a legacy, and those aren't really
taken into account by the bankers orbrokers because frankly, that's how the contracts
are structured and that's not how themotivations are aligned. So I do think
(27:02):
that choosing who you work with tosell your company is critical and making sure
they have some understanding of your motivationfor selling beyond just the dollars. Yeah,
yeah, I totally agree with you. I think you may be reading
my notes because that's a great segueyour comment into again, we're not we're
(27:22):
not going to impact the deal,your term sheet, your your closing document,
right, we're not concerned about that. I do want before we switch
hats, I do want to askone question. When you looked at your
deal, and by the way,it's incredibly fast due diligence period. So
(27:44):
congratulations to you and to the Valtechfor for making it so speedy. I
mean, that's just incredible. Butso keep your CEO founder hat on for
a moment, Randy, and talkto me about your view. And it
may be hard because you're wearing you'veworn one hat and you have a different
(28:07):
hat on now, but talk tome about earnouts. Sure, if you're
selling, you're not going to likethem. In a services business, they're
almost inevitable if you're selling a servicesbusiness. If you selling a product business
or a manufacturing company, might bedifferent. But in a services business there's
usually some level of earnout. Thequestion is what's that arnote based on what's
(28:30):
the criteria? How long is it? And then harder to figure out was
sort of what's the what's the motivationbehind the earnout? Is a company using
it to ensure your interests are aligned? Or are they using it as a
way of giving you a big numberand then not paying you. It's very
hard to tell in advance. Theadvice I gave to others and we pursue
(28:51):
this ourselves, is we called theother founders of firms that have been acquired
previously and asked them what the experiencewas like. Frankly, that's what closed
the deal for Baltech. We talkedto the founders of the firms that are
purchased across the board. They wereenthusiastic. They felt like they dealt with
the credible organization, that the peoplethere did what they said they were going
to do and were honorable when therewas conflict, and so that made us
(29:14):
feel pretty comfortable rolling ahead. Soearnouts can be challenging. In the best
possible world, you know, youget to check the clears on day one
and you walk away. But aservices business that's not always realistic. At
the very least, you're going tohave some sort of holdback to make sure
that things like contracts in progress getclosed out. So there's almost always some
money at risk. Today you serveas a senior executive with Valtech, again
(29:41):
a company with six thousand employees aroundthe world, multiple business units. I
want I want to ask you nowto put your hat on as an acquirer
because people want to know, rightyou know, my audience, the folks
that I deal with, probably alot of folks that I don't deal with
(30:02):
around the world, they want tothey want to look under the hood and
they want to know their business andthe prospects of selling their business from that
of a sophisticated acquired What do youlook for in a deal. There's a
couple of things, so big buckets, let's say, strategic fit and financial
(30:25):
fit. So strategically, there arethings we need. There are parts of
our business that are growing faster thanwe can bring people into them, or
perhaps an area where we're succeeding inEurope, but we have no offering in
North America, so we might doan acquisition to round out our offerings or
to increase the number of talented peoplewe have in the organization. Right,
so there has to be a reasonfor us to do the deal. But
(30:48):
that and that's always the truth.Right most organizations we are buying a company
are buying it for a reason.They have an investment hypothesis, let's use
it what it's called. On theother hand, there's the financial questions,
and the truth is that they mattermore now than they did a couple of
years ago. As interest rates havegone up. Your cash flow, your
EBIT of earnings before interest, taxes, depreciation and amortization, and your revenue
(31:11):
growth really matter. And I thinkthey get more inspection now than they have
Historically we look for firms which aregrowing quickly on some combination of top line
and bottom line, ideally both,although that could be hard to do.
So if you're selling your firm,you should think hard about doing everything,
(31:32):
pulling whatever levers you can to ensurethat you're showing consistent revenue growth, that
you're hitting your projections right, sothat what you're saying you're going to do
is actually what happens in the realworld, and that that's also falling to
the bottom line. I realize,by the way, that's a really hard
thing to do. But if you'recapable of doing that and able to convince
a potential acquirer that this is somethingwhich will continue, it will ram up
(31:53):
your valuation and make the deal muchmuch easier to get done. In a
conversation you had with John Warlow,who is a friend and a colleague so
to speak, and does a hellof a job as a host. By
the way, John asked a questionbecause as I understand your model as a
(32:19):
senior god bal Tech, right thatyou're going out and you're sort of probing
the market. You're talking to potentialsellers with the anticipation that val Tech will
you know, buy their business right, and as I understand your model,
you're going out and finding that prospect. And I like to say, and
(32:43):
I stole this from someone, soI can't take credit. But you leave
the cave, kill something, dragit home, right, and you know,
you bring it back to your mand a team and they go through
the all the formal stages of duediligence. God bless those people, by
the way, because I think Iwould want to jump off of a tall
building if I had to do that. That you're dealing with a potential acquisition
(33:10):
target, a seller. I was. I was very intrigued by the point
that you made, you and Johnmade about the tribal language, uh and
the connection to a seller. Walkus through that, Randy, what does
(33:30):
that? What does that mean?And how does that? How does that
play out? Yeah, it's oneof the most fascinating parts of the job.
So I show said this earlier.My job, as in acquisitions at
Beltech, is really pipeline development,so lead flow right, finding companies that
fitter model, and then I sometimeshave to do the business case for why
I should buy them, and thenperiodically I get involved in the integration after
(33:52):
the deal gets done. What thatmeans pragmatically is I'm calling a lot of
founders because we generally buy founder ledcompanies somewhere between I know, ten and
thirty five million dollars US and revenue. So I'm picking up the phone.
I'm I'm cold calling. I'm doingsales as I did back in nineteen ninety
five when we started the company.But the tribal language piece is where I
(34:13):
can very quickly, very quickly,we can establish a conversation with another founder
because you've you've had shared life experience, and most of these deal calls don't
go anywhere, right, Like,you know, it's like any other cold
calling environment. I make lots ofcalls, I have lots of nice conversations,
and very few of them bear fruitfor the ones that do matter.
But the conversations happen, I thinkbecause we have that ability to very quickly
(34:34):
establish that we've had comparable life experiences. You know, I always joke that
in most cases we've both had tomake payroll and not had the money in
the bank, because that's kind oflike the getting in price for being an
entrepreneur somehow, right, So youknow, it makes it. It's the
most enjoyable part of my job,this chance to reconnect with people who are
living the founder lifestyle. Yeah,that's really cool. How when you're having
(34:55):
those conversations, right, and we'llpick a number or just for today's conversation,
ninety percent of those conversations don't gopast you meeting a new friend on
the phone, right, It kindof stops there because, frankly, and
you know this better than anyone,most companies are not ready to sell right
(35:16):
eighty percent or not ready, whichis why you know, working with them
in a growth fashion I think addsa lot of value to their business.
But when when you're dealing with thesefounders, you're on the phone, you're
getting you're building some rapport, you'remaking a connection. I can tell you,
(35:36):
having spent thirty five minutes with younow that you're just a likable guy.
I would who would not want tobe on the phone with Randy Woods.
But when you begin to unpack thoseconversations, how important is transparency in
the process. That's interesting because ofthe motivation for me to get involved in
(36:00):
the acquistions of Beltech was that Isaw the company going down the road with
a company and I knew the founders, and I didn't really want to work
with them. I won't say they'rebad people, but they weren't people that
really wanted to spend time with.And so very quickly understanding whether the corporate
culture which tends to be defined bythe founder is something that's attractive to val
(36:21):
Tech is part of it. Andyes, that ability to quickly establish the
sort of transparency, and then alsothe self awareness of the founder, because
most people you're talking to have doneamazing things, they've accomplished great things.
If they really don't feel they haveanything else to learn in life, they're
probably not a good fit for us. And so that ability to understand the
(36:42):
sense of humility and the willingness toexperience share some sense of vulnerability goes a
long way to very quickly establishing whetherthere's an opportunity or not for us to
fit together. It sounds kind ofsoft, but it's amazing how consistently this
happens in phone calls and how quicklyyou can get to a know if the
h sort of interpersonal connection isn't thereto find that that red flag. You
(37:07):
can't see my whole studio, butI have a big red neon sign over
in the corner to alert anyone thatwe're on air. Right, it's a
big red neon sign. What's yourbig red neon sign with that seller that
you're engaging for the first time with. Yeah, there's so take away all
(37:28):
the financial stuff, because you're right, lots of companies aren't viable, right,
So I would suggest there's two.One is unrealistic or hyperinflated sense of
what their company's worth. A lotof entrepreneurs really have no idea of kind
of how much their companies where.Sometimes it's the other way around that they
think it's worth way lesson is,but usually it's a hyper inflated sense of
(37:50):
what it's worth. And if thatgap is so big that I see no
way of possibly closing it, there'sno way we're moving ahead on that one.
And then the second piece is ifthere's a sense that they know everything
there is know about the market andthey aren't likely to fit into our corporate
management culture because we like to keepthe founders around, then I think that
is a place where we stopped talking. In many cases, it just doesn't
(38:13):
work for us. If you're it'slike when they're drafting a sports team.
Sometimes the most talented person on thefield is not the person that you want
in the locker room. That's kindof true for us as well. Yeah.
Interesting at a conversation earlier with withone of our private equity partners,
and we were talking my past isback years ago, two lifetimes ago in
(38:37):
a in the technology space, andit was two very very large at the
time when the acquisition happened. Ithink it was the largest acquisition in US
history, right, and the twocultures. I was on one side of
the fence and you know, thebuyer was on the on the other side
(38:59):
of the fence. US sort ofrefer to it without getting into the weeds
of that transaction. You know,the cowboys buying the city folk, you
know, and two very very distinctcultures, oil and water, I might
add, you know as a descriptor. And you know, a lot of
(39:21):
fallout, a lot of low morale, just a lot of part and expression
crap came out of that, youknow, that post transaction, you know,
culture, It was just really weird. How do you in val tech,
you go through this acquisition process,how do you blend those cultures when
(39:45):
it when they're when when they don't, when they don't perfectly align. How
do you work through that? Youask a really tough question, and actually,
in some ways it's not just aboutbaltech, it's about the entire m
and a industry, because yeah,I think when you look at failures,
the chief cause of failure tends tobe putting together incompatible cultures. A hard
(40:07):
question to fear. What cultures arebefore we actually start working together? Right,
Because the plaque on the wall saysteamwork and collaboration are our values.
We've all sat in meetings where everyoneat the table hates each other and no
one works together, but the plaqueis still there, right, So the
real values of the organization and theexpress they're not always the same thing.
So what we try to do ishave a lot of our senior people during
(40:28):
the operational due diligence, meet withtheir senior people, and very quickly you
can get a sense of what therules of the road are, how what's
rewarded, what's punished. Right,that's one big indicator of what culture is.
Commonalities of background. We're fairly carefulto make these kind of abstract because
you want to be careful that yourown personal prejudices don't get involved in it,
(40:50):
right, but the sense of likedo they seem to care about the
same things that we do before theacquisition is really important. Post acquisition,
we have a post merger integration gripthat' involved in sometimes that works really hard,
and a big part of that jobis like almost translation, translating what
this meant for your fifty person firmin a six thousand person firm, and
(41:12):
trying to be transparentable why some thingshave to change because we have financial rigor
you may not have had, orwe have corporate systems you don't have,
or we have reporting and transparency systemsyou've never had to encounter before, and
so like just trying to be transparentaround the reasoning behind these things so they
don't seem arbitrary. Oh it's corporateagain. Like if you express the reasoning
behind it, it seems to easethat integration of cultures after the fact.
(41:36):
But it's not easy and there's almostinvariably challenges that no one anticipates, and
they're always new in each deal,so's it's tough to get better at it.
Yeah, yeah, very very interesting. I heard you make a comment
and I love, by the way, how you took what could be a
(41:57):
very complicated endeavor and you bowled itdown to I think you called it a
straw pole, right, And essentiallyyou're you know, licking your fingers sticking
in the air and saying, tellme, gut level, how the winds
(42:19):
are blowing with this possible acquisition.Right, Yeah, but pragmatically once our
team's got a chance to get toknow each other a little during the operation
of the diilgence. Some are seniorpeople, and I don't mean the M
and A people, I mean thepeople senior architects or creative directors have met
each other. You know, wehave a meeting to kind of assess Heroin's
feeling and it's literally kind of athumbs up thumbs down kind of thing,
(42:43):
like anybody have, like any realred flags we have to look at here
in terms of their culture, interpersonalet cetera. And it's amazing how quickly
you can pull information out of peoplewhen you have that in the round,
with people who trust each other andwho you know have the best interests of
the firm and heart if you tendto have really solid interpersonal judgment. So
(43:04):
with the caveat, you've got theright people doing that. I think I
think it's a really valuable thing todo. Yeah, and I would I
would think that seller, right youracquisition target, you are using a clinical
term, which I think personally I'mnot getting on a soapbox. I hope,
but I hope that we are bringingmore of relational expertise to M and
(43:30):
A than just purely transactional. ButI think it's good for the seller too
to also go through that exercise.Hey are we are we linking up with
the right partner due diligence. Heis usually thought of as being almost entirely
one way right to acquire make surewhat they're buying is solid. But I
(43:52):
would encourage people if you're selling yourcompany, you need to spend a lot
of time looking at the firm you'reselling to, certainly if you have an
earnout, to understand whether or notit's achievable, but also your people are
going to end up there, andso understanding what the motivation is, what
are they likely to do? Notwhat they say they're going to do,
but what are they likely to do. Is this an acquirer who's going to
shut down two thirds year operation becausethey've got access capacity elsewhere? You need
(44:15):
to take that into account. Ifthat's what's going to happen, you may
decide to go ahead anyways, butyou need to figure that out ahead of
time otherwise. I think there's alot of regrets from founders who've sold their
companies. So you see the numbers, they vary from like twenty to sixty
percent, which they've done things differently. And I think that's a little bit
because that due diligence tends to beone sided, and it needn't be.
(44:36):
You can make demands both ways,right, right, totally agree. Well,
my fear has come to reality inthat I knew this is going to
be a fast paced conversation and Tomwas going to fly, and I'm looking
at the clock saying, where didforty five minutes of our life go?
(44:58):
Which is a great testament to thevalue and the content, Randy, that
you've brought to the show. Aswe work toward the sunset of another Chuck
Crumpton show, I have two questionsfor you, and then I'll let you
off the hook. One, whydo deals fall apart? Two reasons?
(45:22):
One, there's a material deterioration inthe financials between the time you start talking
and the time the deal closes.It doesn't happen often, but it can.
Your biggest client leaves. You know, it's unfortunate timing, but that
sometimes happens. Second reason, there'ssomething that we discover. Basically, the
(45:44):
founder the seller didn't tell the truth, and we discover it during due diligence.
So if you've got skeletons in thecloset when you approach due diligence,
bring those skeletons out on day one. You will earn you enormous trust and
transparency. They're going to come outanyways. So those are the two big
reasons. There's lots of smaller reasonstoo, around interpersonal things and that kind
(46:05):
of stuff, but generally those arethe two big reasons why deals fall apart.
Interesting, Okay, So hypothetical situation. I have, let's pick a
number one hundred of my clients sittingin a room here in beautiful Charleston,
South Carolina, and you come downwith your family, and you're serving as
(46:27):
the keynote speaker. And these areone hundred of Chuck Crumpton's clients who are
thinking about selling. Some are ready, some are in the process of getting
ready or whatever. And I'll bringyou to the podium and introduce Randy Woods
to my protected group of people whotrust me. And the question, the
(46:52):
simple question on the table as youapproach the podium, is what do you
say to these people? What doyou say to a seller step into their
head and their heart for a moment, real life, real interpersonal and a.
(47:14):
By the way, I call itdisruptive M and A. But I
think we can do it better.I think we can do it with more
of a human touch. But that'sjust my opinion. What do you say,
what's your message? Talk directly tothose folks listening right now? I
(47:34):
think if you're selling your company,it's likely to be once, maybe twice
in your lifetime event. For mostpeople, it's something you do just once,
and it's going to be transformative.However, it turns out there's a
great temptation not to think past signingon the dotted line, But your life
is going to change, and themore prep you do before that change happens,
(47:54):
the more likely you are to havea happy outcome. There are a
lot of divorces that happen immediately aftera firm is sold, and there's a
bunch of reasons for that, butone of them is that the assets are
liquid now, so the hoorce isa lot easier to do right. But
I will tell you that it's theequivalent of the being an empty nester when
the kids go off from home.Right Suddenly you find yourself full time with
(48:16):
your spouse who you haven't spent thatmuch time with because you've been running a
business, Or you find yourself withtime on your hands in a way you
haven't had literally since you were sevenor eight years old. If you don't
spend time understanding what you want todo, what matters to you in the
absence of your business, then I'mnot sure the details of your deal matter
that much. You will have ahard time thriving after the deal happens.
(48:37):
I think that's what I would convey. That's a beautiful message, Randy.
Right, it's the reality, andhaving seen it both internally for myself but
also with firms we've acquired and thosefounders, it's a wrenching transition, and
preparation helps make it a positive one. Yeah. Yeah, I think the
(49:01):
psychology of selling right is often overlooked. We don't fully realize that. Next
chapter, and I thank you forshedding light on that, because you know
I hate to see when deal's getto the altar and the bride or the
(49:23):
groom bolt out the back door,because there's been a lot of energy and
time and money and effort to bringthe two to the altar right, and
I hate to see things fall apart. I was in a conversation earlier and
I said, I made the commentit shouldn't be that way, right,
and it doesn't have to be thatway. So I really appreciate your point
(49:45):
that you made there, No,not at all. Hopefully it's helpful.
Yeah. So if I'm writing abook on life and leadership and it's a
title a chapter around one word,one theme, and I came and said,
Randy Woods, what is that oneword that I have to have to
(50:08):
put a title on a chapter,I think I'd say self awareness. I
think that's the piece that I thinkis often underprioritized. As you approach these
things. You find a million bookson how to ramp your valuation, or
how to manage the process, orhow to negotiate on LOI, but there's
very little out there that talks aboutbeing aware of what this process means for
(50:31):
you and your loved ones and findinga way to make sure you're aligned before
you get to the altar's usier.Yeah, yeah, very cool, Randy
Woods. Great conversation. It's oneof the highlights of my week and my
month, and I want to thankyou. You poured your head, in
your heart into the conversation and asa host, man, that's all I
(50:53):
can ever ask, right, youknow, if you bring the juice.
Really enjoyed chatting with you. Hopefullypeople find some of this a value.
I'm just sort of talking from myown life experiences, but if sharing those
helps anybody or cast some light,then there's been a good day for me
as well. Yeah that's awesome man. Well again, we've only met through
(51:14):
zoom, but I can tell youI like you and I appreciate the difference
that you have made and you aremaking. How can we follow you?
Track you? We'll do our bestnot to stalk you, but we do
want to continue following your success.Man. Probably the easiest is LinkedIn.
I think it's LinkedIn dot com slashRandy Woods, but that may only work
(51:37):
in Canada. Type in Randy Woodsand valtech and LinkedIn. I'm pretty sure
I'll come up there somewhere. Ohthat's awesome, Randy, All the best
to you continued success and health andlook forward to you being back on the
Chuck Crumpton Show at another point inthe future. Man, way to go,
great job, great conversation. Thanksfor making a difference. Excellent.
(52:00):
Have a great day you too.Man. This is Chuck Crumpton and thank
you again for listening to another episodeof The Chuck Crumpton Show. This is
a lot of fun again if youwould please share it, somebody needs to
hear this conversation. Randy Woods,thank you for sharing your heart today and
(52:23):
just bringing a lot of value toour conversation. Have a great week.
Thank you. Yeah, give youa woman.
Hello, This is Chuck Crumpton andwelcome to another episode of The Chuck Crumpton
Show. We are so excited tobe joining you this afternoon, this beautiful
afternoon. We are actually recording inthe month of September, which is a
beautiful month in wonderful Charleston, SouthCarolina. But I just want to say
(00:40):
thank you, heartfelt, thank youfor being part of another Chuck Crumpton show.
I have three quick favors to askof you, and then we'll jump
into our introduction of our guest.And I have a feeling you're gonna love
today's show. First of all,if you would please subscribe, makes the
(01:00):
show easier just keeping it top ofmind for you. It's very very easy
to do whatever platform that you listento the Chuck Crumpton Show. We're on
all the major platforms around the world. So if you would just subscribe,
it makes it easier to keep theshow cookies at eye level, so to
speak. Number two, if youwould share today's episode. Today is going
(01:23):
to be a great episode. Ithink it's a message and a conversation that
can benefit a lot of people.And if you would when you listen,
if you would just share it withsomebody that you think might get a lot
out of it. And then numberthree, if you could leave us a
review, hopefully a five star review. It just helps us with all the
(01:45):
algorithms that help the show get moreand more visibility. I do this for
free. I don't monetize this show. Every dollar that comes in goes right
back out for production and for growth. This is a way for me to
give back. So if you likethe show, please give us a five
star review. If you don't likeit, you can do a couple of
(02:07):
things. One, call me oremail me and say, Chuck, this
is a here's an idea to makethis show better. And I'm very very
open with willing ears to listen toyour feedback. And if you don't really
like the show, there are thousandsof other podcasts out there that you can
enjoy. But I hope you enjoytoday's episode. And we are thrilled to
(02:31):
have you, and we're thrilled tohave our guests. And we'll be right
back with our guest right after this. Thank you for tuning into another episode
(02:53):
of The Chuck Crumpton Show, anon for profit podcast making a difference where
conversations are real and raw. Weare grateful for your support as we build
one of the fastest growing podcasts inthe US. Please subscribe. More information
can be found at the Chuckcrumptonshow dotcom. Thank you for listening. Here's
Chuck, Thank you, Megan,and again, welcome to another episode of
(03:16):
The Chuck Crumpton Show. I lovebusiness and I believe that small businesses with
two to two hundred employees in NorthAmerica really is the engine that drives our
world economy. The messages you willhear on the show are real world business
(03:38):
conversations. I've been incredibly blessed tohave built and sold two of my own
companies, both that started in thetoolshed of my garage. This podcast actually
started in my toolshed, where conversationsare real and raw. I am a
practitioner of business. This is nota conversation about business theory. At Bull
(04:03):
Street Mergers, we help business ownersbuild and sell remarkable companies. If we
can help you, please reach outto us at Bullstreetmergers dot com. Okay,
let's get after this. My guesttoday is Randy Woods, and he's
coming north of the border in beautifulCanada, and he lives in a small
(04:27):
city right outside of Toronto. Heis a recovering entrepreneur. Nineteen ninety five,
he started an internet company with auniversity housemate before anyone, including him,
really understood what the internet was tobecome. Boy did we ever.
He grew that company, Nonlinear Creations, for twenty three years before selling it
(04:50):
to Valtech, a global digital agency, in nineteen ninety five. Today he
helps Valtech acquire other founder led companiesas well as advising startups and other entrepreneurs.
And this is a real unique opportunity. Randy Woods, Welcome to the
Chuck Crumpton Show. Oh thanks somuch, Chuck. I'm excited to be
(05:13):
chatting with you. Yeah, thisis really cool, man, And I'll
tell you why. We Obviously atBull Street and just in my life having
exited my last company, we dealwith a lot of people who have a
thought somewhere in the back of theirhead that they want to sell their business
one day and to get your perspective, and you have a unique perspective.
(05:40):
Not only did you build and sellyour own business, but now you're on
the acquire side, you're on thebuyer side, You're looking to buy companies.
So I think that's a unique perspectivefor the folks that I work with
and the people that listen to theChuck Crumpton Show. And I'll be quiet
in just a moment, but tolet you know that we have a ton
(06:03):
of leaders, a ton of CEOsthat listen to the Chuck Crumpton Show,
and a lot of people that aspireto be leaders and executives and CEOs and
potentially sellers one day. Right,So you've got a really good audience.
This is going to be a reallygood conversation. I want to jump into
(06:28):
the pool of vulnerability with you,Randy, and just ask you who is
Randy Woods? Outside of living outsideof beautiful city of Toronto and going through
what we just went through. Who'sthe real Randy Woods? Yeah, that's
a complicated question. We'd probably spendan evening over pint or something discussing it.
(06:50):
Who am I? So? Iwas born in a small farming town
in southern Ontarioville, and that kindof formed a bit of my world view.
I was fortunate enough to be bornon a street with a whole bunch
of really interesting characters, most ofwhom I still hang out with. So
I have along baseline those people,and I think it's kind of informed the
(07:10):
way that I approach life. Soit's a few things in the world that
think are important to me. Andit's kind of like a long time where
I kind of formalized this because Ithought it made it easier for me to
make life decisions. So when Iwas twenty something, I said, like,
I want to lead significantly in mylife. That's a piece of the
puzzle for me. I want toexperience widely. I want to see a
lot of things and really understand theworld. Because I had an academic bent,
(07:33):
I really did want to understand deeplythe world to whatever level I was
able to, and maybe it wasn'tas academically adept as I thought I might
have been. I wanted to loveauthentically right. I wanted to have family
and have meeting there. And Italk a lot about living vitally in the
sense that I want to be aroundfor a while, and I think you
don't take care of yourself, youcan't do that. So if you're asking
(07:54):
how I frame my life, thoseare the things that have been important to
me and really have been. Theyhaven't changed much since I was twenty four
twenty five when I first pulled thoseout and wrote them down on a notepad.
Oh that's awesome, man, Ithink we are in our third season.
Well, I know we're in ourthird season with the show, right,
three years of the Chuck Crumpton Show, in maybe fifty or so guests.
(08:20):
I think you just articulated that betterthan maybe anyone else has. That
was clear and concise and authentic.So thank you for doing that. No,
it maybe speaks to the you know, the tortured nights as an undergrad
trying to figure out what to dowith your life more than anything else,
So that's probably where that came out, right, right, right, right,
(08:41):
No, that's really cool, man. I'll applaud you, Randy on
the success that you've had both asa founder, entrepreneur and now you know,
as an executive in a six thousandemployee company. Very very very impressed,
and thank you for sharing who whoyou are because that frames us up
(09:03):
to be able to listen better.Right, We're going to spend the next
thirty to thirty five minutes together.It's a conversation between Chuck and Randy that
the world gets to listen to,which is just pretty damn cool. Right.
It does strike me sometimes that welive in an age of miracles.
(09:26):
Right, This didn't happen even tenyears ago. This wasn't really happening,
right, So the world has beenone where we are all allowed to be
our own producers now, right.We can all create, we can all
contribute to the bigger conversation, andI think we should appreciate that because it
didn't happen in the eighties. Ican tell you when I was growing up,
you saw what you saw on TVor heard what you heard in the
radio, and it was a oneway channel. So I think you're right,
(09:48):
this is an exciting opportunity. Oh, it really is. And you
know, I will tell you infull transparency. I am a growing,
ever ever growing host of a popularpodcast show, and I will tell you
when I first started, I didn'thave a clue what I was doing.
(10:11):
You know. I bought the UH. I bought the best equipment I could.
I learned as much as I could. I hired engineers to come in
and tell me where to sit andwhere to stand, and you know,
where to place the microphone and allof that kind of stuff. But it
generally does not go perfectly. AndI love that because it's authentic and it's
(10:31):
real and raw. I remember backto my first guest, a lady who
won Guest of the Year that year, and she's a phenomenal lady, a
CEO of a billion dollar pharmaceutical companyand a friend of mine, And think
goodness that she was such a goodconversationalist. I was trying to punch buttons
(10:56):
and figure out where to go,you know, as a as a host.
Then she just killed it. Andthank God for that, and I
have I have thanked her many timessince then because she pulled my rear end
out of the fire and made melook good because she was such a good
guest. And this is this isgoing to be no different. You're going
to be a great guest, andthis is going to be a great conversation
(11:18):
getting to the heart of the matter. Randy, you built your business,
Why did you sell it? Oh? Very good question, And I should
first be clear that you know,yes, I was a co founder of
the business, but it certainly wasn'tall on my shoulders. Shannon Ryan,
my business partner. Part of whatI'm most proud of is that for twenty
three years we didn't kill each other. I think that's that's something that I
(11:41):
can put on my gravestone. Andthen we had a cast of just incredible
people that we worked with, someof whom were with us for twenty of
those twenty three years. Right,So, as much as I can and
I do, take great pride inthe fact that we built this company and
sold it, it certainly doesn't allreside on my shoulders. Sure, But
your question about why in the timinga few things, I had a mentor
(12:05):
say to me, somebody else willsomeday own your company, whether you like
it or not. And you hearthat sometimes, but it really struck home,
right It was I was approaching fifty. It was clear that at some
point I'm not going to be around, so somebody's going to the company or
won't exist. There were some sortof business cycle things we're working in our
favor. We've been around long enoughto see that the window to sell your
(12:26):
company opens and closes. And dotcom Era it opened and then it closed
for a long time, and thenit opened again, and then two thousand
and eight happened and it closed again. And so we were at a point
where what we did was valuable tothe market. We could tell by the
fact that our revenues were growing,our profits were growing, we were getting
lots of inbound interest, and wethought, well, maybe this is the
(12:48):
time for us to think about takingsome chips off the table. And we
had a hypothesis about how the marketwas going to evolve, and we thought
we either had to get much bigger, or we had to join someone bigger
in order to to you to thrive, or we did reinvent the company.
We could have done that too,and we've done it before. So when
we went to market, we actuallylooked at either raising money to see where
you go out and actually buy abunch of smaller firms and kind of roll
(13:09):
them up into a larger company,or looking to join a strategic acquirer.
And after we looked at the conversations, Valtech was clearly the right decision for
us, and it's actually worked outreally well. Awesome, that's great.
I want to I want to spendmost of our conversation today Randy on peaking
(13:30):
under your tent. You are anexperienced acquire senior executive at Valtech, and
you guys do good deals. Youdo a lot of deals. You know
what you're looking for. I wantto, I want to, I want
to capture that I want to raisethe hood on the maserati, and I
want to I want to know howthe engine works, because I think a
(13:54):
lot of my listeners are going tojust savor this because they want to know
the mind of an inquirer. Right. So I'll get to that in just
a moment, but I want tocamp out on your transition having gone through
that, right, and we havea very similar path. You know,
(14:16):
I built my company over twenty yearsand I sold it to private equity.
You built your company over twenty threeyears and sold it to a strategic buyer.
And we won't get into the numbers. We don't need to see the
term sheet. We don't need toreview the LOI. That's not important in
today's conversation. You did well.You got paid for that hard work and
(14:39):
sacrifice, vulnerably speaking, take meto that moment when you work through the
process. And a lot of peopledon't understand the hairy nature of selling a
business, right they don't. Iwas with a client of mine recently,
and after a couple very strong alcoholicdrinks, he said, I'm just tired.
(15:05):
I'm tired of this process, anda lot of people don't understand the
fatigue and the fear, all thenon financial stuff that goes into selling a
business as a seller, because you'vepoured, in your case, twenty three
years into this, right, Buttake us on a journey for just a
moment to the emotion of the momentwhen you work through LOI you did your
(15:33):
due diligence, You're at the closingtable, the ink is wet, the
funds are being transferred, and themoment when it was all official. Wow.
Yeah, it's a moment. Notmany people get to experience it.
So first of all, I shouldsay I'm grateful that this was part of
(15:56):
my life story, because really there'svery few people who have that chance.
The honest truth is, by thetime we got there, it was a
combination of relief and exhaustion. Therewasn't a whole lot of like dancing around
with bottles of champagne and that kindof thing. Yes, my business partner
and I went and got a drink, but we were both just fatigued.
We did our due diligence in aboutsix weeks, wow, which is really
(16:18):
tight. Given that we had fourcompanies Britain, Brazil, Us, Canada,
so different law different lawyers. Itwas a very intense process. There
was lots of time, so weweren't certain we were going to be able
to get over the hurdle. Sowe got through it. But I don't
know that my entire life, I'vebeen as exhausted as I was when that
process finished. So I know theexpectation is that you run around and you
(16:41):
celebrate and you go to Disneyland,but really I just went home and slept
for like eighteen hours. I understandwhen I went through that. Just to
take a personal detour for a quicksecond. We closed my business on July
first of twenty twenty, obviously inthe peak, in the height of COVID,
(17:06):
and we were selling. So thisis the Chuckster story. I'm not
necessarily proud of this, but wewere selling our house, buying another house,
and selling a business all in thesame day. In one day.
(17:26):
The fact that you're still this sideof the grave, Chuck's impressive. That's
a lot to have happened. Ican't top that. But I did have
I used to box, and Ihad a charity boxing match that month,
So three days before we closed,I was in a ring with a gentleman
trying to knock me unconscious in frontof about a thousand paying guests, and
(17:48):
that wasn't the most stressful thing happeningin my life at that moment. I
was still answering due diligence calls onthe way into the ring as the music
was playing at the True Story,So to give me a sense that was
in context, maybe it was ait's an experience that leaves its scars.
Oh, it's it's not for thefaint hearted, right, my friend.
Well, you know, the thehairiness of it as we talk about it,
(18:14):
it is, it's incredibly you know, it's just full of fatigue because
you're doing your job as a CEOand then your second full time job is
answering all the doctor requests, goingthrough the conversations inside of due diligence,
and you know, it's like ahockey stick almost because it seems like half
(18:38):
of the attorney's time is spending thatlast week before closing, right, And
I don't know, maybe maybe willinvent a better way to do due diligence,
who knows. But it's it's incrediblyfatiguing, to say the least.
But the other side of that,it's incredibly rewarding to look. In my
(19:03):
case, you know, the headof the private equity firm said, Chuck,
check your phone and you'll see youryour bank account balance, and that
was wonderful. But there's a sensewhere and this is just on the emotion
of the moment, but since that, am I really is this thing done?
(19:25):
Right? Am I have? Ireally just released my baby to college?
Right for the next level. Andit didn't hit me until two weeks
later when we were working through postsell activities, a lot of administryvia and
I think the very last item onthat list was a two sentence memo memotifile
(19:52):
you know, effective today July first, I officially stepped down as you know,
chief executive officer or whatever. Andreading that memo that was prepared for
me to sign, I cried.I set in my chair and I cried.
And it's been wonderful. It's beena great transition. Private equid firm
(20:15):
could not have asked for a betterscenario, better relationship. They've done everything
they said they would do and more. I love those guys, and they're
taking our company to a better,bigger level. But the emotion of that,
until you birth the child or sellyour company, it's hard to understand
(20:38):
the emotion behind that. I thinkyou've nailed that, Chuck. So I
agree that the metaphor of like achild is I think pretty accurate. Right,
leaving home empty, nesting, allthat stuff comes to bear. Fact.
There's a bit of academic research thatthey did that suggested, looking at
MRIs that entrepreneurs often use the samepart of their brain when you ask them
(21:00):
questions about their company as they dowhen you ask them questions about their children.
Right, It's kind of wired,So it's not just a metaphor maybe
right. And I do think honestlythat a lot of entrepreneurs who sell their
company and don't feel sorry for them. They've had a payday. It's great,
but it's a life change which isreally difficult. You suddenly find yourself
having to deal with the big questionsof like what to do with the rest
of your life. You probably nolonger have to worry about making rent or
(21:25):
making your mortgage payment, but youhave a whole other set of worries and
involve like what can I do withmy skills that were rewarding after I've done
playing twenty rounds of golf for whatever? Your initial plan is, right,
right, exactly? I had agood buddy of mine who sold his business
did very well. He said,he spent eighteen days floating in the pool
(21:45):
with apail, and he goes,what's my life come to? You know,
eighteen days of floating in the pool. He said, I'll never retire
again. And he's, you know, a lot of juice left in the
tank, and he's right back atit. I've had the privilege, Randy,
of researching you, getting to knowyou a little bit prior to our
conversation today, and you brought upan interesting and this is again pre of
(22:12):
altech, but an interesting perspective onyou as a CEO entrepreneur right before you
sold, and that was around thetopic of career development for your folks.
I was I was drawn to thatcomment. Do you mind unpacking that for
a moment. Yeah. Yeah.We asked, you know, why did
(22:34):
we sell. There's always many reasonswhy you sell a company, but one
of them that had been on ourmind for quite a while is we had
we had an exceptional group of seniorpeople in the company who'd been with us
for a very long time, andsomeone that spent the whole career. They
joined us when they were twenty fourand now it's you know, thirty or
ten years later, fifteen years later, some cases twenty years later. And
(22:56):
what we were finding is they hadpotential beyond what we could deliver. We
could not grow the company fast enoughto give them the jobs that sort of
suited their capabilities. We could changethe title, but doesn't really do anything
right. We can make you grandpoohball, but you know, you could
become something more substantial. And soone of the fits for Beltech was that
(23:17):
we saw very clearly that they neededthe people that we had on board to
step up into the order to sayand step up. And we were convinced
that our people could become really importantparts of Veltech after the transition that's happened.
In many cases they've gone to muchmore senior positions than I have in
the organization. And so I takereally great pride in that they were great
(23:37):
people and we found the stage theycould perform on it was a lot bigger
than the one that I could build. Yeah, that's beautiful, And what
a gift that your people gave you. Right, they served you and your
business and I can tell, andwe're new friends, but I can tell
that you provided them servant leadership upand that you were looking out for their
(24:03):
interests, which is also a bigdeal. Man. It's one of the
privileges of being an independent owner ofa business. Yeah, So not venture
founded, not be back is thatyou can make decisions that are sort of
on behalf of the collective, notjust on behalf of the shareholders. Right,
Your fiduciary responsibility to yourself exists,but you also have the ability to
(24:27):
say, no, I think it'smore important that we keep this team together
and we take a loss for thisquarter than that we satisfy some external stakeholder.
So yeah, I feel like wehad a really strong team. It's
not like we didn't make mistakes.We had rounds of layoffs. There were
you know, sometimes planes find thebuildings. There's things you can't control.
For the most part, I thinkwe had built a group that really liked
(24:47):
each other, was high performing,and it took care of each other when
we could. Yeah. Yeah,And I think that there's something too,
And this is a simplistic way offraming it up, but the philosophy and
the integrity behind a sell is Ithink really often overlooked, right because I
(25:11):
think we in general, as businessleaders and business owners or whatever. We
look at the deal and we don'tpay. Sometimes we won't pay close attention
to the structure of the deal,right. I know, in my case,
we had five offers for my companyand I took the second highest,
(25:33):
which I was not running a five, one C three. I was important.
The numbers were important, but mypeople were very, very very important,
and the number two offer really setmy people up for you know,
a longevity and continued success. AndI don't think again, we take all
(25:57):
of that into consider, right.I think it's common for entrepreneurs, when
there's particularly it's such a fraught processto get very much caught up in the
number. The structure matters at leastas much, even even in terms of
financials, right when you get paidhow you get paid, because a really
big number that doesn't arrive because it'smainly based on future performance or earnout,
(26:19):
is a lot less attractive than asmaller number they're actually guaranteed. So even
on that side, but I thinkone of the ways that the the M
and A market is broken is thatthe business brokers are investment bankers that are
out there that help you sell yourcompany. They are incentive in virtually every
case by the dollar value, whereasI think for most, especially founder led
(26:41):
companies that are selling that are exiting, there's a whole bunch of considerations beyond
the dollar. In your case,it was your employees, right, it
might be family members in the business, it might be the properties that you
own, it might be the desireof a legacy, and those aren't really
taken into account by the bankers orbrokers because frankly, that's how the contracts
are structured and that's not how themotivations are aligned. So I do think
(27:02):
that choosing who you work with tosell your company is critical and making sure
they have some understanding of your motivationfor selling beyond just the dollars. Yeah,
yeah, I totally agree with you. I think you may be reading
my notes because that's a great segueyour comment into again, we're not we're
(27:22):
not going to impact the deal,your term sheet, your your closing document,
right, we're not concerned about that. I do want before we switch
hats, I do want to askone question. When you looked at your
deal, and by the way,it's incredibly fast due diligence period. So
(27:44):
congratulations to you and to the Valtechfor for making it so speedy. I
mean, that's just incredible. Butso keep your CEO founder hat on for
a moment, Randy, and talkto me about your view. And it
may be hard because you're wearing you'veworn one hat and you have a different
(28:07):
hat on now, but talk tome about earnouts. Sure, if you're
selling, you're not going to likethem. In a services business, they're
almost inevitable if you're selling a servicesbusiness. If you selling a product business
or a manufacturing company, might bedifferent. But in a services business there's
usually some level of earnout. Thequestion is what's that arnote based on what's
(28:30):
the criteria? How long is it? And then harder to figure out was
sort of what's the what's the motivationbehind the earnout? Is a company using
it to ensure your interests are aligned? Or are they using it as a
way of giving you a big numberand then not paying you. It's very
hard to tell in advance. Theadvice I gave to others and we pursue
(28:51):
this ourselves, is we called theother founders of firms that have been acquired
previously and asked them what the experiencewas like. Frankly, that's what closed
the deal for Baltech. We talkedto the founders of the firms that are
purchased across the board. They wereenthusiastic. They felt like they dealt with
the credible organization, that the peoplethere did what they said they were going
to do and were honorable when therewas conflict, and so that made us
(29:14):
feel pretty comfortable rolling ahead. Soearnouts can be challenging. In the best
possible world, you know, youget to check the clears on day one
and you walk away. But aservices business that's not always realistic. At
the very least, you're going tohave some sort of holdback to make sure
that things like contracts in progress getclosed out. So there's almost always some
money at risk. Today you serveas a senior executive with Valtech, again
(29:41):
a company with six thousand employees aroundthe world, multiple business units. I
want I want to ask you nowto put your hat on as an acquirer
because people want to know, rightyou know, my audience, the folks
that I deal with, probably alot of folks that I don't deal with
(30:02):
around the world, they want tothey want to look under the hood and
they want to know their business andthe prospects of selling their business from that
of a sophisticated acquired What do youlook for in a deal. There's a
couple of things, so big buckets, let's say, strategic fit and financial
(30:25):
fit. So strategically, there arethings we need. There are parts of
our business that are growing faster thanwe can bring people into them, or
perhaps an area where we're succeeding inEurope, but we have no offering in
North America, so we might doan acquisition to round out our offerings or
to increase the number of talented peoplewe have in the organization. Right,
so there has to be a reasonfor us to do the deal. But
(30:48):
that and that's always the truth.Right most organizations we are buying a company
are buying it for a reason.They have an investment hypothesis, let's use
it what it's called. On theother hand, there's the financial questions,
and the truth is that they mattermore now than they did a couple of
years ago. As interest rates havegone up. Your cash flow, your
EBIT of earnings before interest, taxes, depreciation and amortization, and your revenue
(31:11):
growth really matter. And I thinkthey get more inspection now than they have
Historically we look for firms which aregrowing quickly on some combination of top line
and bottom line, ideally both,although that could be hard to do.
So if you're selling your firm,you should think hard about doing everything,
(31:32):
pulling whatever levers you can to ensurethat you're showing consistent revenue growth, that
you're hitting your projections right, sothat what you're saying you're going to do
is actually what happens in the realworld, and that that's also falling to
the bottom line. I realize,by the way, that's a really hard
thing to do. But if you'recapable of doing that and able to convince
a potential acquirer that this is somethingwhich will continue, it will ram up
(31:53):
your valuation and make the deal muchmuch easier to get done. In a
conversation you had with John Warlow,who is a friend and a colleague so
to speak, and does a hellof a job as a host. By
the way, John asked a questionbecause as I understand your model as a
(32:19):
senior god bal Tech, right thatyou're going out and you're sort of probing
the market. You're talking to potentialsellers with the anticipation that val Tech will
you know, buy their business right, and as I understand your model,
you're going out and finding that prospect. And I like to say, and
(32:43):
I stole this from someone, soI can't take credit. But you leave
the cave, kill something, dragit home, right, and you know,
you bring it back to your mand a team and they go through
the all the formal stages of duediligence. God bless those people, by
the way, because I think Iwould want to jump off of a tall
building if I had to do that. That you're dealing with a potential acquisition
(33:10):
target, a seller. I was. I was very intrigued by the point
that you made, you and Johnmade about the tribal language, uh and
the connection to a seller. Walkus through that, Randy, what does
(33:30):
that? What does that mean?And how does that? How does that
play out? Yeah, it's oneof the most fascinating parts of the job.
So I show said this earlier.My job, as in acquisitions at
Beltech, is really pipeline development,so lead flow right, finding companies that
fitter model, and then I sometimeshave to do the business case for why
I should buy them, and thenperiodically I get involved in the integration after
(33:52):
the deal gets done. What thatmeans pragmatically is I'm calling a lot of
founders because we generally buy founder ledcompanies somewhere between I know, ten and
thirty five million dollars US and revenue. So I'm picking up the phone.
I'm I'm cold calling. I'm doingsales as I did back in nineteen ninety
five when we started the company.But the tribal language piece is where I
(34:13):
can very quickly, very quickly,we can establish a conversation with another founder
because you've you've had shared life experience, and most of these deal calls don't
go anywhere, right, Like,you know, it's like any other cold
calling environment. I make lots ofcalls, I have lots of nice conversations,
and very few of them bear fruitfor the ones that do matter.
But the conversations happen, I thinkbecause we have that ability to very quickly
(34:34):
establish that we've had comparable life experiences. You know, I always joke that
in most cases we've both had tomake payroll and not had the money in
the bank, because that's kind oflike the getting in price for being an
entrepreneur somehow, right, So youknow, it makes it. It's the
most enjoyable part of my job,this chance to reconnect with people who are
living the founder lifestyle. Yeah,that's really cool. How when you're having
(34:55):
those conversations, right, and we'llpick a number or just for today's conversation,
ninety percent of those conversations don't gopast you meeting a new friend on
the phone, right, It kindof stops there because, frankly, and
you know this better than anyone,most companies are not ready to sell right
(35:16):
eighty percent or not ready, whichis why you know, working with them
in a growth fashion I think addsa lot of value to their business.
But when when you're dealing with thesefounders, you're on the phone, you're
getting you're building some rapport, you'remaking a connection. I can tell you,
(35:36):
having spent thirty five minutes with younow that you're just a likable guy.
I would who would not want tobe on the phone with Randy Woods.
But when you begin to unpack thoseconversations, how important is transparency in
the process. That's interesting because ofthe motivation for me to get involved in
(36:00):
the acquistions of Beltech was that Isaw the company going down the road with
a company and I knew the founders, and I didn't really want to work
with them. I won't say they'rebad people, but they weren't people that
really wanted to spend time with.And so very quickly understanding whether the corporate
culture which tends to be defined bythe founder is something that's attractive to val
(36:21):
Tech is part of it. Andyes, that ability to quickly establish the
sort of transparency, and then alsothe self awareness of the founder, because
most people you're talking to have doneamazing things, they've accomplished great things.
If they really don't feel they haveanything else to learn in life, they're
probably not a good fit for us. And so that ability to understand the
(36:42):
sense of humility and the willingness toexperience share some sense of vulnerability goes a
long way to very quickly establishing whetherthere's an opportunity or not for us to
fit together. It sounds kind ofsoft, but it's amazing how consistently this
happens in phone calls and how quicklyyou can get to a know if the
h sort of interpersonal connection isn't thereto find that that red flag. You
(37:07):
can't see my whole studio, butI have a big red neon sign over
in the corner to alert anyone thatwe're on air. Right, it's a
big red neon sign. What's yourbig red neon sign with that seller that
you're engaging for the first time with. Yeah, there's so take away all
(37:28):
the financial stuff, because you're right, lots of companies aren't viable, right,
So I would suggest there's two.One is unrealistic or hyperinflated sense of
what their company's worth. A lotof entrepreneurs really have no idea of kind
of how much their companies where.Sometimes it's the other way around that they
think it's worth way lesson is,but usually it's a hyper inflated sense of
(37:50):
what it's worth. And if thatgap is so big that I see no
way of possibly closing it, there'sno way we're moving ahead on that one.
And then the second piece is ifthere's a sense that they know everything
there is know about the market andthey aren't likely to fit into our corporate
management culture because we like to keepthe founders around, then I think that
is a place where we stopped talking. In many cases, it just doesn't
(38:13):
work for us. If you're it'slike when they're drafting a sports team.
Sometimes the most talented person on thefield is not the person that you want
in the locker room. That's kindof true for us as well. Yeah.
Interesting at a conversation earlier with withone of our private equity partners,
and we were talking my past isback years ago, two lifetimes ago in
(38:37):
a in the technology space, andit was two very very large at the
time when the acquisition happened. Ithink it was the largest acquisition in US
history, right, and the twocultures. I was on one side of
the fence and you know, thebuyer was on the on the other side
(38:59):
of the fence. US sort ofrefer to it without getting into the weeds
of that transaction. You know,the cowboys buying the city folk, you
know, and two very very distinctcultures, oil and water, I might
add, you know as a descriptor. And you know, a lot of
(39:21):
fallout, a lot of low morale, just a lot of part and expression
crap came out of that, youknow, that post transaction, you know,
culture, It was just really weird. How do you in val tech,
you go through this acquisition process,how do you blend those cultures when
(39:45):
it when they're when when they don't, when they don't perfectly align. How
do you work through that? Youask a really tough question, and actually,
in some ways it's not just aboutbaltech, it's about the entire m
and a industry, because yeah,I think when you look at failures,
the chief cause of failure tends tobe putting together incompatible cultures. A hard
(40:07):
question to fear. What cultures arebefore we actually start working together? Right,
Because the plaque on the wall saysteamwork and collaboration are our values.
We've all sat in meetings where everyoneat the table hates each other and no
one works together, but the plaqueis still there, right, So the
real values of the organization and theexpress they're not always the same thing.
So what we try to do ishave a lot of our senior people during
(40:28):
the operational due diligence, meet withtheir senior people, and very quickly you
can get a sense of what therules of the road are, how what's
rewarded, what's punished. Right,that's one big indicator of what culture is.
Commonalities of background. We're fairly carefulto make these kind of abstract because
you want to be careful that yourown personal prejudices don't get involved in it,
(40:50):
right, but the sense of likedo they seem to care about the
same things that we do before theacquisition is really important. Post acquisition,
we have a post merger integration gripthat' involved in sometimes that works really hard,
and a big part of that jobis like almost translation, translating what
this meant for your fifty person firmin a six thousand person firm, and
(41:12):
trying to be transparentable why some thingshave to change because we have financial rigor
you may not have had, orwe have corporate systems you don't have,
or we have reporting and transparency systemsyou've never had to encounter before, and
so like just trying to be transparentaround the reasoning behind these things so they
don't seem arbitrary. Oh it's corporateagain. Like if you express the reasoning
behind it, it seems to easethat integration of cultures after the fact.
(41:36):
But it's not easy and there's almostinvariably challenges that no one anticipates, and
they're always new in each deal,so's it's tough to get better at it.
Yeah, yeah, very very interesting. I heard you make a comment
and I love, by the way, how you took what could be a
(41:57):
very complicated endeavor and you bowled itdown to I think you called it a
straw pole, right, And essentiallyyou're you know, licking your fingers sticking
in the air and saying, tellme, gut level, how the winds
(42:19):
are blowing with this possible acquisition.Right, Yeah, but pragmatically once our
team's got a chance to get toknow each other a little during the operation
of the diilgence. Some are seniorpeople, and I don't mean the M
and A people, I mean thepeople senior architects or creative directors have met
each other. You know, wehave a meeting to kind of assess Heroin's
feeling and it's literally kind of athumbs up thumbs down kind of thing,
(42:43):
like anybody have, like any realred flags we have to look at here
in terms of their culture, interpersonalet cetera. And it's amazing how quickly
you can pull information out of peoplewhen you have that in the round,
with people who trust each other andwho you know have the best interests of
the firm and heart if you tendto have really solid interpersonal judgment. So
(43:04):
with the caveat, you've got theright people doing that. I think I
think it's a really valuable thing todo. Yeah, and I would I
would think that seller, right youracquisition target, you are using a clinical
term, which I think personally I'mnot getting on a soapbox. I hope,
but I hope that we are bringingmore of relational expertise to M and
(43:30):
A than just purely transactional. ButI think it's good for the seller too
to also go through that exercise.Hey are we are we linking up with
the right partner due diligence. Heis usually thought of as being almost entirely
one way right to acquire make surewhat they're buying is solid. But I
(43:52):
would encourage people if you're selling yourcompany, you need to spend a lot
of time looking at the firm you'reselling to, certainly if you have an
earnout, to understand whether or notit's achievable, but also your people are
going to end up there, andso understanding what the motivation is, what
are they likely to do? Notwhat they say they're going to do,
but what are they likely to do. Is this an acquirer who's going to
shut down two thirds year operation becausethey've got access capacity elsewhere? You need
(44:15):
to take that into account. Ifthat's what's going to happen, you may
decide to go ahead anyways, butyou need to figure that out ahead of
time otherwise. I think there's alot of regrets from founders who've sold their
companies. So you see the numbers, they vary from like twenty to sixty
percent, which they've done things differently. And I think that's a little bit
because that due diligence tends to beone sided, and it needn't be.
(44:36):
You can make demands both ways,right, right, totally agree. Well,
my fear has come to reality inthat I knew this is going to
be a fast paced conversation and Tomwas going to fly, and I'm looking
at the clock saying, where didforty five minutes of our life go?
(44:58):
Which is a great testament to thevalue and the content, Randy, that
you've brought to the show. Aswe work toward the sunset of another Chuck
Crumpton show, I have two questionsfor you, and then I'll let you
off the hook. One, whydo deals fall apart? Two reasons?
(45:22):
One, there's a material deterioration inthe financials between the time you start talking
and the time the deal closes.It doesn't happen often, but it can.
Your biggest client leaves. You know, it's unfortunate timing, but that
sometimes happens. Second reason, there'ssomething that we discover. Basically, the
(45:44):
founder the seller didn't tell the truth, and we discover it during due diligence.
So if you've got skeletons in thecloset when you approach due diligence,
bring those skeletons out on day one. You will earn you enormous trust and
transparency. They're going to come outanyways. So those are the two big
reasons. There's lots of smaller reasonstoo, around interpersonal things and that kind
(46:05):
of stuff, but generally those arethe two big reasons why deals fall apart.
Interesting, Okay, So hypothetical situation. I have, let's pick a
number one hundred of my clients sittingin a room here in beautiful Charleston,
South Carolina, and you come downwith your family, and you're serving as
(46:27):
the keynote speaker. And these areone hundred of Chuck Crumpton's clients who are
thinking about selling. Some are ready, some are in the process of getting
ready or whatever. And I'll bringyou to the podium and introduce Randy Woods
to my protected group of people whotrust me. And the question, the
(46:52):
simple question on the table as youapproach the podium, is what do you
say to these people? What doyou say to a seller step into their
head and their heart for a moment, real life, real interpersonal and a.
(47:14):
By the way, I call itdisruptive M and A. But I
think we can do it better.I think we can do it with more
of a human touch. But that'sjust my opinion. What do you say,
what's your message? Talk directly tothose folks listening right now? I
(47:34):
think if you're selling your company,it's likely to be once, maybe twice
in your lifetime event. For mostpeople, it's something you do just once,
and it's going to be transformative.However, it turns out there's a
great temptation not to think past signingon the dotted line, But your life
is going to change, and themore prep you do before that change happens,
(47:54):
the more likely you are to havea happy outcome. There are a
lot of divorces that happen immediately aftera firm is sold, and there's a
bunch of reasons for that, butone of them is that the assets are
liquid now, so the hoorce isa lot easier to do right. But
I will tell you that it's theequivalent of the being an empty nester when
the kids go off from home.Right Suddenly you find yourself full time with
(48:16):
your spouse who you haven't spent thatmuch time with because you've been running a
business, Or you find yourself withtime on your hands in a way you
haven't had literally since you were sevenor eight years old. If you don't
spend time understanding what you want todo, what matters to you in the
absence of your business, then I'mnot sure the details of your deal matter
that much. You will have ahard time thriving after the deal happens.
(48:37):
I think that's what I would convey. That's a beautiful message, Randy.
Right, it's the reality, andhaving seen it both internally for myself but
also with firms we've acquired and thosefounders, it's a wrenching transition, and
preparation helps make it a positive one. Yeah. Yeah, I think the
(49:01):
psychology of selling right is often overlooked. We don't fully realize that. Next
chapter, and I thank you forshedding light on that, because you know
I hate to see when deal's getto the altar and the bride or the
(49:23):
groom bolt out the back door,because there's been a lot of energy and
time and money and effort to bringthe two to the altar right, and
I hate to see things fall apart. I was in a conversation earlier and
I said, I made the commentit shouldn't be that way, right,
and it doesn't have to be thatway. So I really appreciate your point
(49:45):
that you made there, No,not at all. Hopefully it's helpful.
Yeah. So if I'm writing abook on life and leadership and it's a
title a chapter around one word,one theme, and I came and said,
Randy Woods, what is that oneword that I have to have to
(50:08):
put a title on a chapter,I think I'd say self awareness. I
think that's the piece that I thinkis often underprioritized. As you approach these
things. You find a million bookson how to ramp your valuation, or
how to manage the process, orhow to negotiate on LOI, but there's
very little out there that talks aboutbeing aware of what this process means for
(50:31):
you and your loved ones and findinga way to make sure you're aligned before
you get to the altar's usier.Yeah, yeah, very cool, Randy
Woods. Great conversation. It's oneof the highlights of my week and my
month, and I want to thankyou. You poured your head, in
your heart into the conversation and asa host, man, that's all I
(50:53):
can ever ask, right, youknow, if you bring the juice.
Really enjoyed chatting with you. Hopefullypeople find some of this a value.
I'm just sort of talking from myown life experiences, but if sharing those
helps anybody or cast some light,then there's been a good day for me
as well. Yeah that's awesome man. Well again, we've only met through
(51:14):
zoom, but I can tell youI like you and I appreciate the difference
that you have made and you aremaking. How can we follow you?
Track you? We'll do our bestnot to stalk you, but we do
want to continue following your success.Man. Probably the easiest is LinkedIn.
I think it's LinkedIn dot com slashRandy Woods, but that may only work
(51:37):
in Canada. Type in Randy Woodsand valtech and LinkedIn. I'm pretty sure
I'll come up there somewhere. Ohthat's awesome, Randy, All the best
to you continued success and health andlook forward to you being back on the
Chuck Crumpton Show at another point inthe future. Man, way to go,
great job, great conversation. Thanksfor making a difference. Excellent.
(52:00):
Have a great day you too.Man. This is Chuck Crumpton and thank
you again for listening to another episodeof The Chuck Crumpton Show. This is
a lot of fun again if youwould please share it, somebody needs to
hear this conversation. Randy Woods,thank you for sharing your heart today and
(52:23):
just bringing a lot of value toour conversation. Have a great week.
Thank you. Yeah, give youa woman.
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