Private Equity Spotlight: Building Partnerships and Value with Chris Gibson

[00:00:00] Sean Mooney: Welcome to the Karma School of Business. A podcast about the private equity industry, business best practices, and real time trends. I'm Sean Mooney, BluWave's founder and CEO. In this episode, we have an amazing conversation with Chris Gibson, Managing Partner with Compass Group Equity Partners. Enjoy.
Today is a great day. We get to be here today with Chris Gibson. Chris, thanks so much for joining us today.

[00:00:40] Chris Gibson: Yeah, thanks for having me. Appreciate it. Looking forward to it. We're going to have some fun.

[00:00:45] Sean Mooney: Absolutely. I've been similarly looking forward to this where Chris is in St. Louis, I'm in Nashville.
We're almost becoming sister cities as we start growing into each other, even though we're many hours away.
Chris, maybe jumping into this thing. I always love to get the backstory of. Leaders in private equity like yourself. And so if you could give us just a few minutes on how'd you kind of come up, how'd you get into this industry? What kind of was that attraction that brought you here?

[00:01:12] Chris Gibson: Yeah, I probably took a little bit more of a traditional path into private equity.
I think we're kind of a dime a dozen. Old ex bankers who just decided that they were sick of being on one side of the table and wanted to get on the other side of the table. But in banking, I kind of grew up in the leverage finance world and we covered financial sponsors. And so it was great to kind of be a part of these transactions, even though we were in a different part of the capital stack at the end of the day, you got firsthand experience in working with those folks, how they ended up doing things.
The strategies they put in place, how they executed on them. And even though you're one step removed from being on the debt side of the capital stack, you really got a flavor of everything that they did to really create value and drive these businesses forward. And it always just piqued my interest. And that interest was, Hey, I really want to be on that side of the table and be able to, Pull the levers that these guys do to create value, but doing it in a more intimate setting in regards to working directly with business owners and C level suite management teams, and really kind of having a say or an opinion in regards to how this kind of business moves forward.
So doing leverage finance, not only in my hometown of St. Louis, but with Stinson kind of New York and Chicago before coming full circle is really kind of how I ended up here at compass group. And so. From the leverage finance world in banking, I ended up getting into a family office and doing direct investing in lower middle market companies for them, which is how my partner and I, John, came together as we were actually the largest LP the family office was in his first compass group deal.
And shortly thereafter, him and I decided to lock arms to really kind of form compass group equity partners and drive this business. forward. So been around since 2016 and it's been a great eight year ride and used to be two guys working at it from their homes. Now we're in office with over 20 people.
So it's been a fun journey to say the least.

[00:03:23] Sean Mooney: I love your story and a whole host of accounts. One, I didn't know that was the backstory of how you and John came together. It's great to hear the kind of the rest of that story. And two, then once you guys come together, I think you are been very unique in terms of how You think about the business of private equity as it becomes a business, and we'll talk more about that.
And then lastly, something we'll delve into a little more deeply, the notion of kind of where you originally came up in leveraged finance. I think some of the best private equity investors have come through that route in part because you get this innate appreciation of this now back in vogue concept called cash flow.

[00:04:03] Chris Gibson: Yes, very much so. Very much so. It's so funny how people, they always look at EBITDA and they're always underwriting EBITDA. And from my perspective, I look at it as, What's the free cashflow. EBITDA is one thing, but if you're not looking at free cashflow, what does EBITDA really mean at the end of the day?
I mean, so many companies have good EBITDAs and weak cash flows. And if you don't have good cash flows, I think you're just fighting with one hand tied behind your back. There's an inability to really kind of take advantage of opportunities as they present themselves at the end of the day. And if you don't have the cash to do that, you're really missing out at the end of the day.
End. I think it makes for a great investment if you can kind of make sure that you're not passing up those opportunities because you're maybe hamstrung by cash flow or a capital stack that maybe is over levered. The meaning of cash flow to me is twice as important as EBITDA.

[00:05:02] Sean Mooney: I'd love to dig deeper into that in a little bit.
I think it's something that'll be really important to unpack. It is such a foundational concept in business that is so often underappreciated or not even kind of observed. But maybe before we jump into that, Chris, one of the questions that I love to ask to get to know people better and let our listeners get to know people better is what is one of the things that we'd know you better if we knew this about you?

[00:05:32] Chris Gibson: Yeah, that's a good question. No. You know, my Midwestern roots, I'm probably just naturally a guy who likes to fly under the radar. It's just always maybe kind of been my style. Podcasts are probably something new. So you wrote me into doing this, Sean, and I can't believe I accepted. But of course I did. I think if there is one thing that if people for all intents and purposes would like to know about me is I think that there is.
Something to say about doing private equity in the Midwest, Midwest private equity firms, I think are overlooked, but I also kind of think that that has a little bit to do with just us being in flyover country, but if given the opportunity for us to get in front of a business owner and take our Midwestern mentality, right?
The culture that we were brought up in that's ingrained in us. We're just people first at the end of the day and realize that. People are what drive businesses forward and we can make that connection. It's funny. I always kind of say to people, I show up to management meetings and khakis or blue jeans, and maybe a collared shirt.
And that right there, I think puts a lot of our potential partners at ease. You're starting conversations with where'd you grow up and you know, what's your family like and kind of things of that nature, and that makes an instant connection with these folks that I think. Puts them at ease, but then you have to be able to bring value.
In the sense that you need to be able to talk to these folks about their businesses in a way that you are educated. Because I think by really having them let their guard down with, let's say, this Midwestern mentality is the first step. But then the second step is really kind of trying to create that environment where they perceive you as value add.
And the only way that you can do that is to talk to them in an educated manner about their business, about their industry, In a way that they can relate to if you can do those two things. You're building a strong partnership right out of the gates with these guys. I feel like

[00:07:44] Sean Mooney: I really appreciate your perspective there.
I grew up in Texas. I was born in the Midwest, but in some ways there's a similar kind of, as you pointed out, this kind of people first mentality. Even if you follow our kind of genetics all the way through the wagon trains, farmers, it's ranchers, it's people who made things with their hands. And that culture, I think still pervades those parts of the country.
Today, you know, Nashville, it's the same thing. This is fundamentally a farming area and still is, even 15 minutes away from our offices here in Brentwood, Tennessee. And it's that mentality where it's. You have to collaborate, you have to work together. And I think it's so rooted in that. And then you think about a private equity partnership.
It's like a marriage. You are going to be hand in hand for the next five years. And so that really, really resonates.

[00:08:34] Chris Gibson: Yeah. So many people in our industry, I feel like are white collar folks. Right. And I think that a lot of business owners and we always love being the first institutional capital and deals.
A lot of these people have dirt underneath their fingernails, right? They're blue collar folks that have been successful and realize that maybe they have hit a glass ceiling or realize that maybe their business, what's holding it back is the lack of professionalization and they perceive that a white collar person can come in.
And really kind of help do that. But if you can't make the connection on that kind of blue collar basis, it's really hard for someone to come in and say, Hey, I want to professionalize your business because I've got this white collar mentality and maybe you read a couple of textbooks that kind of said, this is what we should be doing.
And I've never really kind of worked in a blue collar environment and rolled up their sleeves and kind of things of that nature, and so it's all about to us building rapport and building trust. With the people that we invest in. And if we don't have those two things, I think that it's an investment that's kind of doomed for failure.

[00:09:44] Sean Mooney: I think that's spot on. This idea of and versus or you can bring the expertise, the experience, but also you can appreciate it because you grew up in kind of a similar mindset. If you can do both, that's amazing.

[00:09:56] Chris Gibson: Yeah. No, I didn't ever drive a tractor, but I'm sure I could figure it out.

[00:10:02] Sean Mooney: Exactly. I wasn't allowed.
I wish I could have. One of the quick asides that I was always, uh, I grew up working in manufacturing plants, and so my specialty was painting things safety yellow for safety infrastructure and lugging things. I never got to drive the forklift though. And so it was always an aspiration. They never trusted me.
So

[00:10:24] Chris Gibson: I got that covered. I grew up my father owned a trucking business and I spent Summers and school breaks and all that stuff, literally changing tractor trailer tires. And this was in junior high and high school in order to actually move around those tires and do all the things that you needed to do to mount it or take it off, dismount it.
I was fortunate enough to have. A forklift at my beck and call. So

[00:10:50] Sean Mooney: I'm so jealous.

[00:10:51] Chris Gibson: Oh, I'm sure you are. I'm sure I could arrange something. If you ever wanted to give it a work,

[00:10:55] Sean Mooney: I would love to, we're going down a rabbit hole, but this is what's fun about this. One of the investments we made once was a trucking company that is based in Nashville, truckload long haul.
And when we were doing diligence. It was like Christmas came early and we're walking through and we're seeing the trucks and I kind of go to the owner of the business. I was like, can I go inside one of those? And he's like, what? It's like, I just, I've never seen one. I want to see the inside of a truck.
And can I go in and can you like drive around the parking lot with me?

[00:11:27] Chris Gibson: And

[00:11:28] Sean Mooney: he's like, yeah, it was like my six year old self was like self fulfilled finally. And it was one of like the most exciting things. And I've even seen like, there's these new amusement parks where you can go and like operate heavy equipment.
And so I'm like begging to see if my son can, I can do like a boy's weekend and go do that. Cause my wife's like, she's like, I'm not gonna do it.

[00:11:50] Chris Gibson: Good luck getting the wife to do it, but your son is probably a better fit for it.

[00:11:54] Sean Mooney: So we'll see. Fingers crossed. I might take you up on the heavy equipment side of things with the tractor trailers.
We'll bring it back to the center here. Chris, one of the things that I love when I have the opportunity to have a conversation with people like you is to get insights on companies. And one of the things that I think a lot of people like you ultimately develop is some sort of yardstick. These are the elements of value that I'm looking for in businesses to understand if it is good or can be good to great going forward.
And so what are some of the traits that you look for in a company when thinking about the possibilities?

[00:12:34] Chris Gibson: Yeah, it goes back to what we just kind of talked about the Midwest connection that you can make, I guess, for lack of a better phrase, to me, it's all about people. If you kind of said, Chris, what are your top three?
I'd tell you people, people, people. And the reason that is so important is I remember this phrase that someone told me a long time ago that you could be the greatest widget maker in the world, but if you don't have the right people running that company, It's going to fail. It may fail a year from now, five years from now, 50 years from now, you never know.
But if the right people aren't in the right seats, it will fail. So a huge part of our diligence process is the people side of it. It's getting to know the people up front, building that rapport, building that trust. Understanding what their vision is for the future and how we can layer ourselves in there and how we're going to collaborate with each other.
I mean, if I feel like I can't get into the same boat and row in the same direction with. That potential partner, it's just not going to be something that's worthwhile for us because I need to make sure that we are kind of on the same page moving forward because not only does that expedite growth, it makes the process I think more enjoyable for everybody.
And if people are enjoying what they're doing, you're going to be able to push things further and further, maybe take some chances that you normally wouldn't take because you have that trust. So it really, to us always comes down to people. I think we do more diligence on people than you will actually see out there with most firms.
I mean, people, a lot of times in our industries have their heads buried in spreadsheets and things of that nature. And I would probably say that we really kind of put more effort and more time into the people side of things. To make sure that there's kind of that total alignment, that rapport, the ability to build a high level of trust.
So we can all kind of push that business forward together and execute on the strategies that we put in.

[00:14:30] Sean Mooney: I really liked that response, Chris, and it resonates on a whole host of levels. I'm curious to unpack that a little bit. How do you go about understanding whether or not you have the people that are going make this business all it can be?
And supporting them as well. They're in the journey that you're about to take.

[00:14:52] Chris Gibson: Yeah. I mean, obviously they've already got a good track record, right? If we're talking. And then I think what it comes down that next layer, if you're kind of starting to peel back the onion. Is what is kind of their vision and does their vision really kind of match up with ours or Is maybe our vision wrong and we need to kind of be spending more time really kind of focusing on Their vision for the business and also kind of how open Are they to us coming in and being value add and do they see us being valued?
And I think if you can really kind of connect a lot of those dots Which allows you to all be on the kind of same page You You can almost kind of look back and say, there's a high level of trust in the ability to execute on what we are putting together based on not only what they, what history tells you, but also really the bond that these people have built with that bond being compass group and that potential partner that we're looking out for each other's best interests, that we're willing to collaborate, listen to one another's views, We're not always going to agree on everything, but at the end of the day, if it's a healthy debate that leads us to that right path, headed in that right direction, That's valuable to both of us.
It's one of those things. Can we really rely on one another, trust one another, that we are going to take the right path together and do everything that we need to do to execute on the strategy that we come up with together. And so having that open mindedness and that ability to have that high level of trust and to listen and collaborate, I think really kind of helps out tremendously and puts us on that right path.

[00:16:37] Sean Mooney: He shared a number of things that really struck me and I think show a lot of wisdom that is not always resident, particularly maybe professionals and private equity, they're starting off and a few things that I heard there was one, particularly when you're investing in first institutional capital firms, there sometimes can be this perspective of, let me show you how it's done.
And the first thing you said is, you know, they've been pretty successful. And so there's that respect of what they've accomplished as entrepreneurs. That is not easy to do and sometimes it's contrary. It's presupposition. Let me show you the way and then what I really liked is next. You followed up with this.
Let's talk about the vision and see if there's alignment and something that was also really unique that I really loved. We just share their Chris was maybe it's their vision that needs to inform hours versus vice versa. And then you brought it all together. And it's like, and then it's finding that alignment between the two.
And then if you can't get alignment, sometimes it's not a good fit. It's having that openness, that honesty, that humility to also listen to these entrepreneurs have built something pretty darn special to get to the point where you would even consider partnering with them. So there was a little bit of.
Kind of a mini MBA master course in there that I think is really important for it. A, entrepreneurs to listen to in terms of how they think about finding a partner, but also B, up and coming investors.

[00:18:03] Chris Gibson: I think it's the hardest thing for younger people in our industry to really truly understand. To be frank with you, is that personal relationship, that personal connection, that ability to raise your hand and say, maybe I was looking at this the wrong way, being humble at the end of the day and realizing that it's not all about you and your vision and what you think is right, because you could be wrong.
And if you are wrong, the easiest way to kind of combat that. Is to get feedback from other people. That feedback inevitably helps you change your lens, right? At the end of the day. I mean, everybody looks at everything through a different lens, but your lens is kind of crafted and molded by what other people say and do and what you go out there and read.
And so it's constantly morphing. So if you come in and just say, listen, this is the way it's going to be. I don't see how a partnership ever gets off the ground because it's really not a partnership. It's just a one way street. Whereas you believe that what you are looking at and trying to accomplish Is the end all be all.

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[00:19:34] Sean Mooney: Once again, so spot on and just great messages for our listeners here who are particularly starting off to kind of light speed and jump ahead. And maybe with that idea of partnership in mind, Chris, I'm curious, what are some of the resources that your firm brings in the context of this partnership with the companies that you're investing to support them in their growth and development?

[00:19:57] Chris Gibson: Yeah. My partner and I had a, we had a different spin on. The version of operating partners, that's kind of the norm, mostly operating partners, historically have always been somebody that has maybe been in the industry, been successful, and you're trying to repeat what they have done. And you try to find maybe a smaller version of what they did and you kind of parachute them in and allow them to really kind of work with that business owner to take it to the next level.
But when you think about that, that could be perceived as babysitting by your partner, right? It could be perceived as the operating partner comes in with one view and that may not be the right view or just because he did it right in the past doesn't mean it's going to be the right way of doing things kind of going forward.
And so what we found was more valuable, I think, in lower middle market businesses to business partners, to sellers, to owners. Was really bringing in more functional expertise that they could tap into because sometimes these companies, they're not big They don't have big budgets They don't have the ability to bring on someone in legal or someone in hr Or someone in fpna or someone in marketing, but they know they need all those things And so what we did here at compass group is developed a program called compass guides And what we do is we We go out and we hire the folks that are legal experts, HR experts, FP& A, marketing, IT, and we spread those out across the portfolio.
To date, I think it was last year, we had over 300 projects across the portfolio that these four or five individuals Worked on with these different companies. And so it's not just bringing in one individual, it's bringing in the functional experts that can tap into all of these different things that really add value to the business owner.
Because one month it could be, Hey, I need help with marketing. The next month it could be, I need a new ERP system or CRM system. Okay. We'll talk to our it guy about that. He can put you on the right path. Hey, I'm doing a bolt on acquisition. It's small. I don't need a high powered. Outside legal firm and I can't afford inside legal counsel.
Okay. Work with Joe over here at Compass Group. He can be able to kind of facilitate that work. And so what we did is instead of really kind of bringing in one individual and putting them in one company, we looked for the functional expertise that a lot of these companies were wanting. And we looked at it and said, almost all of these companies need help in some which way, shape, or form.
Okay. So why don't we bring that in house and allow these companies to tap into that resource when they see needed, but don't necessarily need to burden their PNL or their organization with that person. So I think it's a unique spin on the operating partner model. That's pretty unique. Out there. We're definitely, I think in the minority of people that do it, but we just feel like it creates a lot more value across the board to all of these companies by doing it in that way.

[00:23:08] Sean Mooney: I love that approach. It resonates on multiple levels and in some ways reflects the reason why I kind of had the audacity to start a business that was kind of all the different things I needed within our portfolio companies, because the needs were so nuanced and so specialized, but also transitory and need.
Like they needed it to get something going or they needed it to refine a little thing, but they didn't necessarily need a full time equivalent for each one of those needs either. It's like, just get me over this hump and get the flywheel spinning. Or in some ways they couldn't even bring in the full time until we set the stage and got things kind of in place.
Cause they weren't even ready. And so that transitory nature of needs was something that in many ways inspired me to found BluWave. For very much the similar reasons, just because it was just such a wide variety of things. So your approach to this makes a ton of sense from my lens.

[00:23:59] Chris Gibson: Going back to the whole trust part that we talked to, it's if you're a new partner of ours and you kind of raise your hand and say, Hey, I need help with digital marketing or just marketing in general, and I say, Hey, Brad here at our office, can really help you with that.
And he knows that Brad has been successful working with other portfolio companies or even his peers, uh, fellow CEOs, and they are kind of vouching for him and giving him kind of a thumbs up saying this worked out great. Brad really knew what he was doing. He really helped our business. And Then all of a sudden that ease kind of comes to that business owner, right?
And that he is more welcoming of it. He knows that Brad's been rubber stamped by kind of other folks that are out there, unlike maybe kind of going out and talking to third party consultants or things of that nature that he just doesn't know anything about or can't be verified. And so it actually entices them to want to use them because They see that their peers and the other portfolio companies are using them and have had success using them.
And it's really helped drive value in their business.

[00:25:08] Sean Mooney: That's spot on. It resonates innately in me in terms of like what even led me to do this kind of crazy adventure. So maybe to turn the chapter here, what are some of the top things that you're thinking about maybe thematically in terms of things that your business leader should do?
And this might be like a really good time to Delve right back into this cashflow concept that we were talking about.

[00:25:31] Chris Gibson: Yeah. I think it goes back to what we were talking about earlier is EBIT does not translate to cashflow. And maybe it goes back to my days of leveraged finance of just kind of saying, how am I going to get repaid if I'm half the capital stack here?
But you just see time and time again, so many opportunities that are left on the table in regards to people just not having the cash flow to make that investment to take on that risk. And if you internally have a strong company that has strong cash flow, I think the world's kind of your oyster at the end of the day.
It allows you to look at so many different opportunities. It allows you to prioritize those opportunities. It allows you to better understand what the ROI is with those opportunities and whether the investment's big or small, you know, you have the ability to do it and your decision making is driven off ROI and cashflow rather than maybe you're just being pigeonholed into kind of saying I can only do this one opportunity because it's all I could afford or my risk tolerance is Only at this capacity, just due to the fact that I don't really have a cushion when it comes to my cashflow.
So if I run this thing or ground, what do I have to kind of fall back on? And so cashflow to me is king at the end of the day, it really allows you to go about opportunities and look at opportunities and go after opportunities. That I think are just not there if you just don't have that cashflow. And so having that inevitably, I think is the greatest attribute a company can have because it just opens up so many different opportunities.

[00:27:14] Sean Mooney: It's so true. And you think about it, what is cashflow? It's the fuel of a business. It helps you go ultimately faster, but it also helps you go through. If you're this ship sailing through the ocean, you can go through the choppy waters cause you have enough to get through it. So as I reflect back on the last few years where it's been pretty choppy, those businesses that had and have cashflow, they kind of went right through it.
And now that we see the clouds kind of part, they're just picking up speed while everyone else is trying to like start the engine. Oh

[00:27:43] Chris Gibson: yeah. If you think about it, if you're in a strong cashflow position, you're proactive, right? And if you're not, you are on your heels and then you're in a reactive situation and it just doesn't bode well for the business.
It also, I mean, going back to the people aspect of it is if people know that they can't chase opportunities and business owners know that those opportunities are off limits, it's deflating to them at the end of the day. I mean, partnering with us. They should be able to tap into all of these different opportunities.
We should provide the roadmap or the blueprint for them to be able to kind of say, listen, I can take on that risk or I can prioritize this opportunity more than that one because I know I've got strong cash flow to be able to do it. So, you know, if I hit those choppy waters, like you were saying that I can kind of bust through them, it's not going to be me turning the ship back around Transcribed Because I knew that there was just no way that I was going to be able to get through it.

[00:28:42] Sean Mooney: And it's a great example of why private equity backed companies Statistically do the best out of any type of company is because they have the fuel and they have the appreciation for it. And maybe just to take things back to basics a little bit for our listeners that are more new to this, there's this concept that we've been talking about called EBITDA.
And that's kind of a short measure for like, what's the profit that a company makes? Earnings before interest taxes, depreciation, amortization. That's a mouthful. But what it doesn't include is you've got to pay taxes. You've got to buy capital equipment that's not included in that number. That's the big one.
You got to wait for people to pay you your receivables. You have to pay people more quickly. And then you also often have inventory that you're just using money to put on the shelf. And when we talk about cash flow, this is everything that's left after all of that. And that's a lot of stuff. And so your point, Chris, like particularly And maybe high level finance classes or investment bankers.
They just want you to think about EBITDA before all that other stuff, but it doesn't include all these other things that are so essential. And I think it's a shortcoming to that measure.

[00:29:46] Chris Gibson: Oh yeah. I mean, How do you grow a business if you don't invest in it? Right? There's your CapEx spend right there. You brought up a good point buying inventory, right?
So many people gloss over networking capital to a point that it's almost maddening to see from my perspective, because that is, I mean, that right there is the cash inflows and outflows of the business. And you have to really break down even in a free cash flow to really understand the opportunities that are in front of you and how you unlock them.
And the ability that you have to be able to take advantage of things. And if you don't have that, you're going to be limping along. I mean, if you're okay with growing your business 5 percent a year, year over year, that's great. That's not something that we look for. I mean, we're not big on dividends and kind of things of that nature of kind of lining our pockets.
I mean, when we look at free cashflow. Free cashflow is, okay, now I'm excited because this is a dollar I could put back in the business. This is a dollar I could spend doing X, Y, Z. That to us is what really creates the growth in the business, is the opportunities that free cashflow really, I think, enable us as well as our partners to use and put to work.
It's

[00:31:00] Sean Mooney: just such a great point that you're bringing up, Chris, and for business owners who are listening to this, if your competitors are in EBITDA thinking, they're not thinking about all that stuff. But if you're in cashflow thinking, you're going to use that as an opportunity. Like, how do I get higher ROI in our CapEx?
How do I minimize the inventory we need to carry? How do I collect receivables faster? How do I maybe pay payables? And it turns into not a liability, but an opportunity and an asset if you're in cashflow thinking versus EBITDA land.

[00:31:29] Chris Gibson: Exactly. I mean, it's almost kind of the weight of the world being lifted off your shoulders, right?
If you're a business owner, you could say to them, look at all of this capital that we can unlock. And that capital that we can unlock really drives the ability for you to be able to grow your business faster and take chances on opportunities that really at the end of the day have presented themselves.
And so when you're sitting in front of a business owner before you've even locked on, and you could talk about those things, I mean, people's eyes just get real big at the end of the day. And everybody, I think at their core understands the importance of cashflow, right? I mean, When you're a kid going to the store, right?
To buy something, you know, a dollar is only going to buy you so much, but when you kind of start talking about EBITDA, people almost kind of get glassy eyed and they really kind of don't know what's going on or what opportunities or what value that creates. But if you got to start talking about cashflow of this dollar is worth this, and you could spend it on this, and that's going to create value of this.
People understand that logic. Business owners understand that logic because for so long they have built their business. Working off of cash flow, cash accounting, how much money do I have in my bank account? That's how I'm going to run my business and not worrying about like, what are my earnings? It's is the cash building in my account.
If it's building in my account, I know I can put it to work doing this. I know I can take these risks. I know I can look at these opportunities in a different way because I know I've got the dollars to be able to put to work in those situations.

[00:33:03] Sean Mooney: And it's great wisdom really for all. Whether you're starting up in the industry or if you've been building a company for years, it's uncommon wisdom.
With wisdom in mind, Chris, here, I am a collector of advice because I try to be self aware and I try to fully realize that if it were up to me in life, I'd be in a lot of trouble. And so why not borrow other people's wisdom, any chance I can get, but I've mentioned this before, but for those of you who've read, like.
The Game of Thrones books or the watch the series, it's like the, you know, nothing John Snow kind of comments that so every day I try to remind myself and I mean, frankly, I am reminded whenever we do these episodes that like, wow, there's so much I need to learn in life. And so I'm curious, Chris, if you could go back to 22 year old Chris and share a piece of advice in the way back machine, what would be one of those piece of advice that you'd share?

[00:33:56] Chris Gibson: I wish I could tell you I had infinite wisdom, but unfortunately I don't. I think the one thing that really kind of comes to mind is 20 years ago, there used to be this common, I think, think, whereas people always kind of thought you had to go get your MBA, right? And I went through that process, got my MBA from the University of Notre Dame, but at the end of the day, I spent two years building great friendships, built a great Rolodex, learned maybe a little bit, but you learned items that were mostly, let's say, textbook driven, right?
They weren't real world scenarios, right? You read case studies, but I mean, reading a case study isn't kind of real world experience. If I had to go back and do anything, I'd probably say that getting an MBA wasn't as important as maybe the two years that I missed of just getting real world experience.
Because I think that real world experience puts you just on a different trajectory at the end of the day. I think it helps you advance your career faster. foundational base of common sense. The real world is just different than the world of books, right? That you could find in your library. You're just constantly learning more and more every second, every minute from peers and colleagues and things of that nature.
Conversations, I think to me are so much more valuable than anything you can kind of read on a page. And so I think if I had to give one piece of advice to my younger self, it would be that school's great. It's wonderful. Everybody needs it. But I think there are far more opportunities out there that you're missing out on.
If you think that school is going to replace what you could get in the real world, because I think it's one of those things, they are night and day difference. And one should always kind of be looking at it from the perspective of like, how do I grow myself by growing my network, by growing my thinking.
And you always learn more by I think real world experiences than you ever would kind of, let's say in a classroom.

[00:36:08] Sean Mooney: Yeah, I really like your perspective there and it makes me think back to, I was talking with a friend of mine, like, would we ever do our investment banking analyst class again? I was like, if we could do it all over again, which 1990s New York city was a unique experience, shall we say, let me say you're going to work 120 hours a week, they meant it.
But you know, as I reflected back on it, kind of to your point, like what was so valuable on that time was. It was two years of experience, but we got six years of experience because literally we were working three 40 hour weeks that whole time and that experience was so invaluable to development, to growth.
It wasn't valuable to sleep, but it was, but just like those laps around the track and the more laps that you can get and the more real world experience that you can pack into your life, particularly when you're in liftoff stage at the beginning of your career. At least for me, it was so impactful. And I think what you're saying is like, how do you get more of that sooner and faster and appreciate the tangible versus the theoretical?

[00:37:12] Chris Gibson: Yeah. I mean, I tell our younger guys here at the office, your biggest headwinner, your strongest headwind is time at the end of the day, not to knock an NBA by any sense, it helped me build a strong foundation, but what really, I think accelerated my career is reps. Like you just said, laps, laps, reps, whatever you want to call it, getting those reps in, I think is so much more meaningful than what you could learn in kind of a classroom.
You're actually kind of doing yourself a disservice and you're putting yourself behind because that's two years of reps, right? If you're thinking about an MBA that you didn't get and somebody else out there did get those reps. And if you're looking to really kind of take your career and push it forward.
You have to have those reps because I lean on every day, things that I learned through those repetitions, all those different deals that we've done, whether it's at Compass Group or before this, you can always kind of find yourself in a situation that you can reflect back on saying, Oh, this is familiar to me.
And how did I handle it? Do I handle it the same way? Or do I handle it a different way? Because maybe it didn't go all that great. And I learned from that to me, it's time is kind of your worst enemy. And the more and more reps that you can get in, I think it really kind of puts you in a better spot at the end of the day.

[00:38:37] Sean Mooney: I love it. It kind of almost in a unique way, it reminds me of this concept that I just, for whatever reason, find kind of almost like beautiful and elegant of lean Six Sigma, right? How do you make a process faster with less variation and variability through that process? In the delivery of this. And it's almost like applying that to your life.
How do you go through the things faster? How do you make the outcomes more narrow in my bizarre way of processing information in a thousand percent makes sense to me. All right, Chris. Well, this has been a really fun conversation. I've learned all sorts of things. I wish I knew before and truly want to thank you for taking the time to share.
You know, some of the hard earned perspectives and wisdom that you've gained over time as you've been building and leading a PE firm.

[00:39:22] Chris Gibson: Yeah. Still got a long runway, so I still got a lot to learn. Right. This has been great. Always appreciate the time, Sean. And if you ever find yourself at St. Louis, I'm sure I can find you a forklift.

[00:39:34] Sean Mooney: I will take you off on that. Don't be surprised when I call. Thanks Chris.
That's all we have for today. Special thanks to Chris for joining. If you'd like to learn more about Chris and Compass Group Equity Partners, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcasts. We truly appreciate your support.
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Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.

BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.